Thursday, September 25, 2008

The Power of Money: A Response to Chris Schwartz

Today, my friend Chris Schwartz posted a response to my post, "We Are All Socialists," on his blog Schwartztronica. In it, he questions my thesis that the current bail out program represents a form of socialism, calling it a "capitalistic solution to a capitalistic problem."

I must politely disagree. One thing I feel Schwartz is not considering is the sheer amount of power that this bail out will give to the federal government. If you give a financial firm or insurance company large amounts of money to prevent them from going under, you will automatically gain a hold over them. This may be expressed in favors such as campaign donations. It may also, however, assert itself in terms of government regulation.

As I stated in my first post on this topic, I do not necessarily think this is a bad thing. In the right hands, this could be a force for moving our economy to work more for the commonweal, essentially the vision expressed by John Kenneth Galbraith in The Affluent Society. If nothing else, it could be used to obtain easier financing for public works.

What concerns me, though, as I mentioned earlier, is the total lack of forethought and discussion that is being put into this. The bail out plan has apparently been agreed to by Congress, less than a week after it was published. A few concessions by the White House-limits on executive pay and a bit of Congressional oversight-and it gets through. Am I the only one reminded of the Patriot Act?

This is part of a pattern of taking advantage of emergencies, whether military or economic, that Naomi Klein has dubbed "The Shock Doctrine" in her book of the same title. Indeed, Klein has drawn this conclusion herself.

What troubles most is the overall pattern of expanding government power. The government is now training troops for deployment within the United States, as I've discussed in a previous post. The Patriot Act has made massive inroads into our civil liberties and freedoms. Although we generally divide civil liberties and economic issues, I fear they may be part of one and the same pattern.

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