"How to Save Capitalism" - Introduction

If I were asked to provide a synopsis of the US Government's response to the global financial crisis to date, I would do so thusly:

• Though it had been brewing for years, Fed Chief Bernanke figured out in August that the real estate crisis could really mess up the economy as a whole after sitting down and having people try to explain to him what the heck was going on with all this toxic debt that was getting bundled and resold and repackaged and resold until it was like a Christmas present wrapped in a box wrapped in a box wrapped inside another box that was wrapped up inside another package of shit.
• The 'present' was finally unwrapped, the shit fell on the floor, and all hell broke loose.
• Treasury Secretary Paulson submitted a 3-page plan to fix the economy and save the world, which amounted to: a) giving him a ginormous sum of money ($700 Billion was concocted because it sounded like a really big number), b) let him do his thing, no questions asked, with no interference of any kind from any body, be it legislative or judicial, and no accountability of any kind.
• Somehow, Congress was permitted to vote on this plan, and because they're not completely batshit insane (and because many people contacted letting them know that Paulson's plan WAS batshit insane), they voted 'thanks, but no thanks' to that bridge to nowhere, which is to say they voted 'nay'.
• A new plan was put together, chillingly similar to the old plan, but longer, and with some strings attached.
• The world at large was informed that it would come to an end if this new plan was not passed.
• The new plan was passed.
• Sec. Paulson said the best thing to do would be to use all that borrowed money to buy up a bunch of bad debt.
• People hollered, pointing out that Paulson's idea was abrasively stupid.
• Sec. Paulson changed his mind about that whole buying up bad debt thing, and decided instead the best thing to do would be to just give a bunch of that borrowed money to banks, trusting them to lend that money intelligently in order to keep the economy from swirling down the toilet.
• People pointed out that maybe those same banks that demonstrated stupendously poor judgement and caused this big giant horrible mess might perhaps not be worthy of that kind of trust.
  
• The recipients of corporate welfare immediately proved people right by declaring that, instead of intelligently lending money to keep the economy from swirling down the shitter, they would be giving their executives big fat bonuses in time for the holidays, and pay dividends to their shareholders, and go out and get a nice massage at a fancy resort. Stuff like that. Real '90's type stuff.
  
• Sec. Paulson changed his mind about that whole giving loads of money to banks thing, and decided maybe a better course of action might be to just do nothing at all, hang onto all that borrowed money, and let the new guy deal with the problems in a couple of months.
  

And that's basically where we stand. Yes, I left out a lot of stuff in there -- stuff about the auto industry, and Fanny Mae and Freddy Mac, and the untimely loss of Bernie Mac, but what I think I've sufficiently demonstrated here is that our current government doesn't know what the fuck it's doing. About anything. Hilariously enough, the President (and his apologists) are going around in public lately saying things like this:

"It is true that this crisis included failures, by leaders and borrowers, by financial firms, by governments and independent regulators," Bush said. "But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system."

This crisis was, in fact, caused by the free market system. Alan Greenspan, who managed that system, admitted as much. The crisis was caused not only by decades of deregulation driven by a poisonous, faulty ideology that maintained the 'market' was some sort of organic, sentient being that could heal itself, but also by a radical change in the public perception of what corporations are, what they do and are supposed to do, and how to define their success. Barry C. Lynn will enlighten us further about that in Part 2.

President Bush is absolutely correct about one thing he said the other day:

"Our aim should not be more government, it should be smarter government."

This is something he's apparently come to realize after dramatically increasing the size of our government and dumbing it down to a state of exasperating incompetence, inert confusion, and panic.

We stand at a crossroads.

Fortunately, Henry Paulson's ideas are not the only ones we have from which to draw. There actually are good ideas out there, including the seven published in the November issue of Harper's, which I am going to share with you in this special RadicalHead series.

Note that while the title of the series is "How to Save Capitalism", I readily acknowledge the fact that our economic system is not a capitalist one. I'm simply using the term for convenience, much in the way that we call our political system a "democracy", even though it's actually a broken Representative Republic sitting atop a two-legged stool. Also, the title was taken from the Harper's piece I am reproducing here.

I do not have permission to reprint the content from Harper's that I'm sharing here, but given the importance of the topic and the value of these ideas, I don't think they should be available only to subscribers (though I encourage you to subscribe--it really is the best magazine around).

Note too that even if we implemented, with all due urgency, every one of the seven suggestions that follow, it will still not be enough to keep the US from a drastic downward spiral. These economic reforms, if enacted, would be but one prong of a multi-faceted approach to national security that must also include similarly creative, intelligent, and forward-thinking long-term solutions to tackling energy, education, health care, and other issues as well, all at the same time. Employment is inextricably linked to education because schools are funded through property taxes. Our energy problems cannot be solved without highly-educated people and a strong committment to science. And so on. All our problems are intertwined, and any solutions we devise must be mindful of that simple fact.