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The Voice of Murdoch calls defeat...

by Metatone Fri Sep 26th, 2008 at 10:51:37 AM EST

Well, on economics, perhaps... at least temporarily...

We've discussed before the role of Irwin Stelzer as henchman of Rupert Murdoch and high priest of the News International Voodoo Economics Order...

So it was with some surprise that I came across this speech, linked to in the Guardian:

Irwin Stelzer: Capitalism as we knew it is finished | Comment is free | guardian.co.uk

This is the opening of a lecture given by Irwin Steltzer on 'The Political Economy of America' to the Centre for Policy Studies on Thursday September 25 2008. To read the full text, go here.

Choice quotes from the speech below (my emphases):


When a successful investment banker-turned Treasury Secretary caps his career by arranging a $700 billion bail-out of the banking system after engineering the nationalization of two financial institutions so large that even the reddest socialist would have paused at the prospect of taking them onto the government's balance sheet, when a leading neoconservative suggests, only partly in jest, that presidents of banks seeking to sell their dicey paper to the Treasury should not be allowed to earn more than the President of the United States ($400,000 annually), you know that something fundamental is going on. Which indeed, it is: the day when that engine of capitalism, the financial market, will be allowed to operate more or less unimpeded by government, has passed.

The features of this New Capitalism are:


􀂃 a reduction of the willingness of individuals and politicians to accept the risks inherent in the market system as it has been structured and as it has functioned until now;


􀂃 the replacement of the bias in favour of deregulation that saw airlines, trucking, banking, electricity generation, natural gas production and other industries freed from pervasive (although not all) government control, with a bias in favour of more regulation;


􀂃 a refusal to accept any longer the market's verdict as to how income and the fruits of economic growth should be distributed;


􀂃 the rejection of the idea that the benefits of free trade are so obvious, and so widely distributed, that the post-World War II free-trading regime, its economic benefits notwithstanding, should be extended, and
􀂃 insistence that the balance between considerations of economic efficiency and equity that has guided public policy since the end of World War II be changed, with equity considerations being given greater weight when coping with the increasingly powerful winds of change that are buffeting the US economy.

Stelzer then proceeds to recite all the usual things we've come to expect from him about why anything but total free-trade and market competition, red in tooth and claw is morally wrong and deeply damaging to the human race.

I or any regular here could deconstruct that part of the speech, but I don't think it's important to do so at this time, because of the way he ends the speech:


None of this is to say that the New Capitalism will produce material results superior to the Old Capitalism, which has been no slouch at improving living standards and eliminating poverty. Or that its new regulations, new trade regime, new tax structure, or new emphasis on fairness will satisfy those who are driving these changes. I have my doubts on both scores: the New Capitalists have not entirely met the burden of proof that rests on those who would change a system that has done so much to improve the lot of those fortunate to live under it, and they have the bit I their teeth and little opposition now that conservatives have capitulated. But there can be no doubt that the world has changed, that capitalism as we knew it even until a few years ago is no more, and that we who remain saddened at some of the changes had better learn how to make the New Capitalism function as well as it can, rather than curse those who have capitulated to its demands.

He hasn't changed his views, he's still the Genghis Stelzer who in many ways dogged my economic consciousness as a teenager from his column in The Sunday Times (London.)

But if you'd ever suggested to me that he'd be writing this capitulation. I would never have believed it. Something very large is going on. It's perhaps in part a rhetorical ploy to try and absolve his views from the disaster they helped create, so they can be brought out again in 5 years time. But still, whoever thought that there would even be 5 years hiatus from Genghis Stelzer?

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This has been coming for a while.  As many have been predicting for years, there's a realignment happening beneath the daily back-and-forth of politics.  We, I think, get bogged down in that daily show and worry too much.  Things are happening, and Steltzer is just another observer to notice.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Sep 26th, 2008 at 11:07:04 AM EST
In a similar vein...

FT.com: It's mourning again for Americans (September 20, 2008)

Since 1989 one of the most important US global exports has been its open-market ideology. At home, even as the super-rich pulled further and further ahead of everyone else, Americans largely had stuck with their aversion to class war. At the Republican National Convention, it still was perfectly acceptable to assert the biggest problem with American government was that it was too big.

...

But on September 15 2008 the Reagan era officially came to an end. The sunny confidence in the superiority of the American way has been undermined now not only by Guantánamo and Abu Ghraib but also by the fact that this financial crisis has its epicentre on Wall Street, not Moscow, Mexico City or Mumbai. Even more importantly, after nearly three decades when the prevailing promise was to make government smaller - even Bill Clinton had to "end welfare as we know it" - the focus now will be on making government better, and probably bigger.

Yesterday was the first day of a new era of re-regulation - and it may be too much to hope that the pendulum doesn't again swing too far, albeit in the opposite direction.



A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Sep 26th, 2008 at 11:30:38 AM EST
I thought about dirying that piece last weekend, but not under the title or "calling defeat" but something like "retreating to winter quarters".

The question is whether the defeat of Market Fundamentalism as an ideology (there will always be liberalization as a policy option) can be made permanent.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith

by Migeru (migeru at eurotrib dot com) on Fri Sep 26th, 2008 at 11:32:37 AM EST
[ Parent ]
I think you're right that it's only a retreat to winter quarters. Stelzer hasn't changed his views at all.

(It's interesting to note that in the speech he casts aspersions on those who question the way free trade etc. have turned out, but doesn't quote any evidence.)

Still, even a hiatus is far beyond what looked likely when I first joined ET.

by Metatone (metatone [a|t] gmail (dot) com) on Fri Sep 26th, 2008 at 12:10:08 PM EST
[ Parent ]
The damage to the system is now so great (and Stelzer knows more than we do) that these über-pundits, these facilitators of the looting, have had time to coldly realize (or be coldly told by their masters), that it will be impossible to go on running the racket as before.

Their job now is damage limitation. Notice how

  1. it is pretended ultra-market financial capitalism did a great job spreading wealth, lifting up the poor, and making folks happy to live under it (expect soon the weeping and wailing over the socialist night under which all are groaning);

  2. it is pretended there is far more of an organized, entitled movement of rejection of ultra-market financial capitalism than in fact has ever had access to any other than marginal media and political movements (expect soon the stalking bogeyman of straw to be depriving, Stalin-style, the neo-libs of their right to free speech, association, business, breath).

Can the Stelzer change his spots?
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Sep 26th, 2008 at 12:43:34 PM EST
[ Parent ]
He almost sounds like he's making an effort to avoid being the first against the wall.

you are the media you consume.

by MillMan (millguy at gmail) on Fri Sep 26th, 2008 at 01:33:40 PM EST
[ Parent ]
Aren't these events the exact counterpart of the fall of communism when the USSR broke up ?

The much heralded "victory" of the capitalism won't have lasted 20 years !

Are we going to see the renaissance of de Gaulle's third way ?

by balbuz on Fri Sep 26th, 2008 at 12:36:31 PM EST
At the outset, this meant involving workers in the life of the company and giving them a share in its results. In time, workers would share with employers in the management and profits of the company.

This objective offered a particular advantage in de Gaulle's eyes : it would soften the perverse effects of capitalism and doctrinaire socialism by defusing the class struggle.


When I've talked about that I've just been accused of "having drunk the koolaid".

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 26th, 2008 at 01:01:32 PM EST
[ Parent ]
And by Migeru, of all people. ;)

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Fri Sep 26th, 2008 at 03:33:34 PM EST
[ Parent ]
What I do not get is what is Irwin Steltzer doing with this in The Guardian? Wouldn't The Sunday Times run it?
by Magnifico on Fri Sep 26th, 2008 at 02:07:43 PM EST
Stelzer publishes a column in the Times whenever he likes. Perhaps Comment Is Free wanted this. Perhaps Stelzer thought it went with the spin?
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Sep 26th, 2008 at 02:48:26 PM EST
[ Parent ]
a reduction of the willingness of individuals and politicians to accept the risks inherent in the market system as it has been structured and as it has functioned until now

Historical Unemployment

United States

Michigan

Ohio

Indiana

Hmmm.... I wonder why it is that people are unwilling to accept the risks inherent in the system.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Sep 26th, 2008 at 03:24:02 PM EST
The one thing that stood out most for me was:

...the post-World War II free-trading regime...

...the balance between considerations of economic efficiency and equity that has guided public policy since the end of World War II...

...Old Capitalism...

Stelzer's new historical revisionism: to act as if the capitalism that failed now, the one with all the deregulation in the past 30 years he advocated, was the status quo for 63 years.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Sep 26th, 2008 at 05:57:14 PM EST
I beat Stelzer to the punch by six months:

http://www.dailykos.com/storyonly/2008/3/20/13393/7032/220/480839

by unclejohn on Fri Sep 26th, 2008 at 10:05:56 PM EST
Yes, capitalism as we knew it is finished because it's done its job for the Ueberklass.  All economic mobility has been squeezed out of the system.  If you already have your pile, you're set and your mercenaries will protect it.  If you don't, you're screwed, and the mercenaries will block you.
by rifek on Sun Sep 28th, 2008 at 02:18:10 PM EST


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