by Jerome a Paris
Tue Oct 14th, 2008 at 07:21:08 AM EST
Gideon Rachman has an article evaluating the performance of our leaders during the recent credit crisis, and which is suggesting that the proponents of the neolib narrative are certainly not willing to give up or concede anything. Also interesting is, of course, what is left unsaid in that current debate.
Rachman's conclusions are that Bush was hopeless, the Germans hypocritical and inconsistent, Sarkozy did reasonably well, and Brown did the best. He is especially scathing about the comment by Steinbrück about the US's loss of financial dominance (mocked, as in various other places, as premature Schadenfreude) and happy to note that it is British civil servants who are saving the day with their now widely-imitated bank rescue plan.
Unsurprisingly, the ranking closely mirrors the preferences of the deregulating neoliberals: the pro-City NuLabor, followed by the pro-Anglo-Saxon Sarkozy, with the too-continental Germans dismissed and the toxic Bush administration thrown in the dumpster. And the none-too-subtle message is: the "reformists" are still the best("reform" being the usual cocktail of labor market deregulation, tax cuts, pro-free-trade pro-big-corporation-profits policies).
A parallel tune can be found in various ministers' comments that this is not a bailout, but an "investment" that will yet turn a profit for shareholders. This is a nod to the public outrage as seeing hundreds of billions of taxpayer money thrown at the very bankers that created the mess in the first place, and an attempt at placating opposition to such largesse. It helps maintain the notion that the goal is to "make a profit" (ie everything is still valued only through the monetary lense, a core component of the Anglo Disease), but it also opens the door to at least two vital debates that must be brought to the fore to replace the "reformists do best" tune:
- that on the role of government, and its rehabilitation. The very people that explained to us that governments were incompetent and had to be shrunk had no recourse but to go for government money, guarantees and action when they drowned in their own mess. The conclusion here HAS to be that (i) governments play a valuable role and thus cannot be continually starved and (ii) those that pushed the anti-government propaganda have to be seen as cranks, liars, fools or crooks, and treated with the contempt they so richly deserve - which includes no longer listening to their self-serving economic "advice";
- that on what could be done with an investment of a trillion or so euros of public money in things like energy efficiency, public transportation, housing, poverty reduction. All of these things create massive positive externalities that benefit society as a whole, and would be especially helpful as we face the banker-caused economic downturn, collapsing real estate sector and high energy prices. If we can justify blowing a trillion on incompetent bankers that threaten to take us down with them as "investment", then we surely can actually invest in the economy in ways that will benefit all and not just a greedy few.
It is no thus surprise that Rachman's ranking (which I have seen also in the WSJ and the Economist) reflects a preference for those that have been most effective at disguising government-destroying policies behind bland populist discourse, and whose actions today still fundamentally go in the direction of making the State a tool of the financial markets, rather than the representative of the public interest.
That fight on spinning the current crisis is just starting, and it has to be fought vigorously.