Drawing a Line

["maxsaw" <maxsaw@xxxxxxxxx>]

It seems to me that our politics lacks the right
response to the current and incipient financial
events.  By "our" I include both a liberal,
muddle-through stance and a radical,
sit-back-and-gawk posture.

The Administration is going to support IMF
bail-outs and some of the left is going to
be carried along, for lack of a substantive
critique and alternative.  The right is going to
make great political hay opposing the use of
taxpayer money to bail out fiscally imprudent
foreigners. The further left is going to confine
itself to speculating on the nature of the
current crisis and what this means for assorted
theories and intellectual currents.

The US labor movement is going to be told, not
without reason, that a collapse of Asian
economies will destroy US jobs, through I presume
reduced imports of our goods and low-ball export
pricing to US consumers.

Presently the actual bailout cost in dollars does
not seem to be the main issue.  It's more the
principle of the thing.  Until we stand on
principle, we face a fate like Prometheus.
Our liver is consumed by vultures, it grows
back, and the system rolls along.

I would like to suggest, if it's not too obvious,
that the basic principle should be to bail out
workers and small savers, not holders of great
wealth or corporations (financial and otherwise).
Force banks to write off bad debts, dismiss from
positions of authority decision-makers who have
made bad decisions, and restructure to keep
enterprises open, people working, and small
stakeholders solvent.

Short of a restructuring plan based on
this principle, there should be no support for
any bailout at all.  There should be no socialism
for holders of financial assets, only some kind
of insurance for small savers.

If we're willing to contemplate the disruption of
international trade for the sake of labor, human,
and environmental standards, why not for this
situation?  Just as we indulge industrial action
that disrupts commerce and lives, why not deny
public subsidy to failed enterprise or capital
allocation?  (I think the same follows,
incidentally, for the global warming agreements.)

It all depends on which hostages you're willing
to give up.  I suggest that the core interests
are jobs and incomes, informed by the frameworks
of class, race, and gender, and I'm willing to
flout the so-called 'public interest' on
everything else absent satisfaction on the core
issues.

Nobody ever won a battle without taking some
casualties.

The question of greatest interest to me is
whether there is some practical way to accomplish
the sort of restructuring alluded to without
going up the blind political alley of simply
advocating state takeover of whatever and
restitution to whomever.

My instinct is that we're going to see more
rather than less of these events -- crises that
fall short of apocalypse but which reflect
significant acts of economic exploitation and
lost political opportunities.

What we say about this does matter.  After all,
it was a minority, radical critique of free trade
that has assisted crucially in the development of
a major movement (consisting of both left- and
right- components) which has culminated in the
stalling of further free trade legislation that
is unleavened by humane, social concerns.

MBS

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Max B. Sawicky           Economic Policy Institute
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Opinions here do not necessarily represent the
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