The right eloquence needs no bell to call the people together and no constable to keep them. ~ Emerson

Wednesday, October 1, 2008

A Failure of Ownership

What we have witnessed this week is a failure of the Republican Party to adapt to its responsibilities. I speak not of our current financial crisis, although I am far from absolving them from all culpability concerning it. Rather, I speak of the Republican response to the crisis – both the plan originally floated by the Republican Bush Administration and its subsequent defeat by Republican Representatives in the House.

These two groups are each examples what I see as the two major camps within the GOP at the present time. The Bush Administration’s proposals represent a camp at odds with the Reaganesque concept of small government. They believe in trickle-down economics but no longer trust the vagrancies of the free market, viewing government’s role not as getting out of Wall Street’s way but actually helping it along however and whenever possible. This is how, with straight faces, they can claim the need to spend a trillion dollars without oversight.

The Republican House members represent a camp that considers themselves true Reagan purists at the expense of the pragmatism often practiced by Reagan himself. Touching the free market with even the best of intentions is anathema to them. They strive for a level of laissez faire in all things unmatched since the Nineteenth Century and regard anything less as a slippery slope to socialism. This is how, with straight faces, they can claim that acts like privatizing social security and lowering the capital gains tax will help cure the problem.

Both camps desire the establishment and prolongation of a one-Party system of governance. The difference is that the Bush camp does so for Rovian political ends, while the House camp does so for more genuinely ideological reasons.

The House Republicans point to widespread public discontent with a bailout deal as the reason for their intransigence but such discontent is not the source of their policies but rather a symptom of those policies' past failures and why they may be doomed to fail this time.

The reason for failure lies in the explanation provided by so many Republican politicians and conservative economists as to why a bailout is so essential, not only for Wall Street but also for individual Americans of all stripes. In a time of intense weakness in the credit market, their oft-stated goal is not to keep the U.S. economy solvent or even liquid but rather to keep it growing.

I side with those who see some type of bailout as an imperfect but necessary solution. However, saving the economy is the most I believe we can hope for presently. The myth of indefinite, sustained, ever-increasing growth is one this country has been chasing for the past several decades.

The myth led to unrealistic expectations of performance from market analysts which, in turn, goaded CEOs and CFOs, with the twin motivators of greed and fear of failure, to first cook corporate books and then line their own parachutes with gold for the inevitable meltdowns that followed.

The myth resulted in politicians of both Parties favoring Wall Street extravagantly, often at the expense of Main Street, as well as viewing (big) oil as the lubricant, literally and figuratively, of the economy.

For two decades, such practices produced a general prosperity that caused middle class Americans to meekly submit to, or look away from, the system’s worst excesses. For the past eight years, they continued to allow threats and fear-mongering about what would happen should the top collapse to ensure their support of its continued prosperity, even as one of the largest wealth gaps in the history of this country became increasingly clear to everyone.

The public’s current hostility to a bailout represents the long-coming consequences of their estrangement from the fruits of their own labors. It is not so much that the public lacks confidence in the ability of government to solve the problem, although their distrust of government is the result of far too many pro-business policies on its part, but rather a disinterest and disconnect from the thing government is trying to save.

A hundred years ago, we were a nation of budding entrepreneurs and proprietors. Fifty years ago, we were a nation of savers. Twenty-five years ago, we were a nation of investors. All of these groups inherently understood the importance of a solid business and financial sector, even if their own benefits from such fiduciary were limited.

However, the Bush Administration was particularly successful, through word and action, at turning America into a nation of consumers and debtors. This group cannot see the connection between Wall Street and their own miserable situations. The precipitous drop of the Dow Jones on Monday may be enough to reignite fears but these Americans still tend to see government, business, and banks as “the enemy” overall.

Many Americans are more concerned about the price of sneakers at Wal-Mart than they are the value of stocks on Wall Street. The “Big Board” they spend the most time studying is not the Dow Jones but the one at McDonalds.

The good news for Republicans is that voters have little trust for either Party’s promises this election. The bad news is that many voters no longer feel invested in the American Dream and are unlikely to feel that way until they gain greater ownership in its wealth again. The quickest route to that end will be if government actually delivers on placing the needs and concerns of Main Street ahead of Wall Street.

The Republican philosophy – of either camp – cannot even conceive of such a concept. In the globalism of the Twenty-First Century, they remain invested in a Cold War mentality that sees the United States as engaged in eternal war against evil forces to maintain its position as the world’s sole military and economic superpower. Their first allegiance is given to those they see as "on the wall" (i.e. the industrial/military complex, fueled by global oil flows).

Eventually the voters, in spite of the particular brand of shortsighted, selfish consumer stupidity this Party has programmed in their heads, are going to figure that out. It could be this is the year. If so, the Republicans will have no one to blame but themselves – not for a failure of leadership but rather a failure of ownership and the need to spread wealth instead of fear.

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