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The Turning Point

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Posted on Feb 22, 2007

Steve Fraser

(Page 3)

Breakdown and Paralysis

Perhaps the better question, then, is:  Will the presidential election of 2008 turn out to be a turning-point election of historic proportions.  The greatest unknown is whether or not the status quo is headed for a breakdown crisis severe enough to clear the ground for such a transformative moment. 

Signs certainly point in that direction.  The convergence of imperial defeat, economic insecurity and rampant corporate malfeasance might be enough all by themselves.  But the sudden change in the political status of global warming—once the dim, background hum of some far distant disturbance, now more like the heart-stopping premonitory theme music from the soundtrack of “Jaws”—magnifies the crisis of the whole global order, at home and abroad.  Anatole Lieven has called it global capitalism’s “existential challenge.”  Life as we’ve known it may be beginning to end.  Congress is already holding hearings about the natural apocalypse to come, and all but the most ostrich-like politicians acknowledge global warming as an urgent reality; a fact on the ground, so to speak, no longer a debatable theory.

The Bush administration—and so the old order—has staked a lot on Iraq, not just its geopolitical and global economic ambitions.  Its already severely diminished status as a moral exemplar of democracy and civil liberties won’t survive this latest plunge into military mayhem.  Moreover, the president’s “surge” plan is a mortal threat to the secret source of the regime’s strength at home.  The politics of fear and imperial bravado, which once won it legions of followers, may, in the aftermath of the surge, reach its own turning point as those voters abandon ship as fast as they once climbed aboard.  Can the administration or the old order survive a fiasco of such proportions? 


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Iraq is also the equivalent of a budgetary bunker-busting nuclear device.  It exacerbates an already aggravated economic dilemma.  Despite a Noah’s flood of statistics that seem to support a Pollyana-ish view that we live today in the best of economic good times, millions of Americans experience the opposite—a yawning gulf of insecurity affecting their health, retirement and employment prospects.  They share a gloomy sense of moving backwards, of decline. 

Once upon a time, poverty was associated with the super-exploitation of those who toiled for meager reward.  Then, in mid-20th-century America, poverty came to be associated with the lack of work, with those so marginalized they were shut out of the main avenues of modern commerce and industry.  Nowadays, we are rushing back to the 19th century.  Today, 30 million people in the United States work long and hard and still live in poverty.

Insecurity even more pervasive than this once supplied the energy responsible for supplanting laissez-faire capitalism with the New Deal.  Might we be approaching something of that scale and scope today?  Though there can be no definitive answer to this, there also can be no question that a general crisis of economic insecurity confronts the old order.  All of its self-serving and adventitious rhetoric about the heroics of risk fall on increasingly deaf ears.

Not incidentally, since we live in the age of the global sweatshop, that older order is now global in scope; and the international financial mechanisms that so far have kept the global system humming for the U.S. are themselves under great and increasing strain.  The system is, at present, being kept aloft by the needs of China, Japan and other major economic powers.  One day soon they may find the burden of swallowing gargantuan amounts of U.S. debt insupportable. 

Are we heading toward a breakdown like the one which, in the early 1970s, forced the Nixon administration to scrap the Bretton Woods financial system, the defining economic institution of the postwar Pax Americana?  Together with defeat in Vietnam, the devaluation of the dollar and the end of fixed exchange rates for international currencies exacerbated the general impasse in which the New Deal order then found itself. 

When it comes to the social reputation of our corporate elite, is it necessary to say anything more than Enron?  The litany of shameless profiteering, felonious behavior, cronyism and corruption at the apex of the private economy has arguably called into question the “right to rule” of those presiding over the country’s key economic institutions.  Even at the regime’s hubristic height following Bush’s presidential victory in 2004, he discovered he’d crossed a bridge too far in his attempt to turn over the Social Security system to Wall Street.  Trust in the corporate elite has only grown frailer since then. Cynicism mixed with rage is a potentially explosive brew that fuels the economic populism even someone as “establishment” as James Webb articulated in his alternate State of the Union address.

What may make these converging dilemmas over-ripe for change is the response of the old order itself.  One sign that some decisive crisis has arrived is the growing incapacity of those in charge to adapt—as if the dire nature of what’s happening dries up the springs of their political imaginations, forcing them to fall back on brittle orthodoxies.  Andrew Mellon’s notion of liquidating everything in sight as a way out of the Great Depression was one case of mental paralysis, a retreat to what had once “worked”; after all, the periodic busts endemic to the laissez-faire capitalist life cycle had, in the past, always cured themselves, even if the “cure” included a great deal of what we would today call “collateral damage.”  The Bush administration is similarly falling back on its own orthodoxies, each move only betraying just how out of touch its top officials are with the new political and social realities forming around them.

Take its reaction to the stunning electoral defeat it suffered last November.  The president’s new “surge” plan, the self-destructive decision to forge ahead in Iraq without a scintilla of reasonable hope of success, even from the standpoint of the most cynical imperialist, is such a reaction: instinctive, unreflective, inflexible and probably deeply believed in.  In other words, there is a resort to the ideological fixations that have long-driven this regime—and the larger political order from which it rose—but which only become ever more rigidified as reality bites back.

So, for another example, the administration’s response to the crisis of economic insecurity has amounted to an ideological provocation shoved right in the teeth of its own electoral repudiation.  Bush proposed a massive cut in Medicare and Medicaid and, even more in-your-face than that, a tax on the health insurance of those dwindling remnants of the New Deal order who still enjoy some decent level of employer-funded healthcare. 

Everything the old regime can imagine to defend itself ends up making things worse.  With some poetic license, one is reminded of an inversion of that old Marxist axiom in which the capitalists, not the proletariat, become the gravediggers of capitalism.

The Open Door

Of course, that is a gross exaggeration.  The question of the moment is not:  Will 2008 be a turning-point election, but rather can it be one?  Here, everything depends not on what the old order does on its own behalf, no matter how boneheaded, but on how the gathering forces of opposition respond to the system’s crisis.  Is there a willingness to build a clear, programmatic alternative inside the Democratic Party?  It is, after all, an institution deeply infected with free market/free trade ideology and most of the imperial presumptions of the conservative counterrevolution.

Is there a readiness to mobilize around nonmarket solutions to the general crisis:  To fight openly for the re-regulation of the economy and its planned re-industrialization; for its re-unionization; for redistributive policies to supplant the ide fixe of economic growth; for the dismantling of the petro-industrial complex and its replacement by a new, non-fossil-fuel system of energy production; for a global assault on the global sweatshop?

Will there be a new era of polarization rather than centrism, partisanship rather than bipartisanship, a head-on confrontation with the Democratic Leadership Council, like the guerrilla wars once waged against the John Jacob Raskob and Al Smith elite of the pre-New Deal Democratic Party or the one waged by the Goldwater legions against the silk-stocking Rockefeller Republicans?  Once upon a time, someone as mild-mannered as Franklin Delano Roosevelt found it within himself to “welcome the hatred” of those he labeled “economic royalists.”  Might there be someone equally unafraid waiting in the wings today?

Is there a new order being born, ready to challenge the old one where it is both weakest and also strongest: namely, in the imperial arena?  Not only has global aggression proved deadly to all, depraved in its moral consequences, and life-threatening to basic democratic principles and institutions at home, but it has also been the most fruitful, life-giving incubator of the conservative cultural populism which the old order has relied on for a generation.  Anti-World War I intellectual Randolph Bourne’s prophetic aperu—“War is the health of the State”—needs to be made even more embracing:  War has become the health of a whole political culture, not to mention the vast, hard-wired military-industrial apparatus with which it lives in symbiotic bliss.  Is there a will to take on that system of cherished phobias, delusional consolations, and implacable interests? 

Finally, there is the X factor, most unknowable of all, but also most critical in converting a mere election into something more transformative.  Might a social movement or movements emerge from outside the boundaries of conventional politics, catalytic enough to fundamentally alter the prevailing metabolism of political life?  Might the mass demonstrations of immigrants portend something of that kind?  Might the antiwar movement soon enter a period of more sustained and varied opposition in the face of this administration’s barbaric obtuseness?  Straws in the wind as we race toward 2008.

Steve Fraser is co-founder of the American Empire Project and editor at large of the journal New Labor Forum.  He is the author of “Every Man a Speculator; A History of Wall Street in American Life” and most recently co-editor of “Ruling America: A History of Wealth and Power in a Democracy.”

© 2007 Steve Fraser

Originally posted on

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By R. Palyu, February 25, 2007 at 5:39 am Link to this comment
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It is reassuring to see intelligent insightful
comments here.

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By Kol Klink, February 24, 2007 at 6:58 pm Link to this comment
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Tao Walker understands the nature of the real problems that face all humanity, not just America.

I believe that our consumer culture which has proped up our consumer economy and was instigated by slick ad men and tv has sent the developed and developing countries past the tipping point economically, politically and ecologically.

What happens to a consumer economy when the consumers have no more fiat money to spend? Americans now have the lowest savings rate since the depths of the great depression. Many have multiple mortgages on their homes and polls have shown that most of the money extracted from homes was spent not on luxury item but on food, taxes, insurance, and medical care. Many are now in danger of losing their homes.

If this were not bad enough we are embroiled in a couple of resource wars in the mid east and are threatening to start another.

I have heard it said by ‘experts’ that if we lose our authority in the mid east that we will become a second rate power. I would rather be a citizen of a second rate power that I am proud of than a consumer of a first rate power that I feel ashamed of because of the crimes it commits in my name.

Perhaps an economic meltdown is just what the doctor ordered! We could rid ourselves of the military/industrial monkey on our backs and begin rebuilding a country that we can be proud of. The America we had but lost while we were shopping for the latest model widget. Capitalisim with a safety net works very well for many developed democracies as long as they dont spend their gdps on war junk and unending pork barrel projects.

If we spent half of our annual defense budget on American infrastructure all Americans would have access to a job that paid a living wage. We could have high speed rail for commuters and freight, real education for all, real health care for all, a FEMA that worked, and on and on. We would still have the worlds largest military but perhaps one not large enough to arbitrarily attack anyone that the moron de jour fancied.

If we work very hard and very fast we may be able to accomplish our tasks before global warming sets off the next round of resource wars…they will be about water.

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By Carl Baydala, February 23, 2007 at 10:23 pm Link to this comment
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The author eagerly wants some kind of change to occur and is looking for clues. Perhaps he should hire George Bush and Co. as they are adept at finding things that others cannot.

What is needed in the society is some kind of revolution.  The Reagan Doctrine has simply gone on too long without being challenged in terms of its credibility. Changes should have already occurred, but they have not. The lobbyists and the media perhaps are too effective and block needed change by their methods.

The society has changed, I think,  and not for the better. Globalization and right wing policies have not been kind to the lower and middle classes.  The country accumulates more debt all the time and this is a taxpayer burden. Paying for ‘unnecessary’ war is a cruel burden to inflict on present and future generations, particularly when the main beneficiaries are the bankers and the idustrial classes.

A real revolution is most likely going to be required once the imbalances become so great between the classes. The changes the author is looking for comes when the working classes finally realize what has happened to them.  An honest media would have given them some clues by now.

This revolution is going to be required because even the politicians who are supposed to be representing the interests of ‘working people’ think like the Reagan types; they support war.

In geopolitical terms, the war is understandable, but it is not sold properly to the American public. Most likely, people like Hillary Clinton understand the real reasons for war in the Middle East and why it must continue. The problem with the whole business is of course is that the average person has to pay for it, while others benefit. And, in the process of keeping the war going the national debt spirals out of control.  It cannot go on forever. When the managers (politicians) fail to keep all of the pieces moving together and the agenda intact, then you may have your revolution.

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By Hondo, February 23, 2007 at 6:55 pm Link to this comment
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I agree with Kathlyn. This was an amzingly thoughtful, insightful article that all Americans should read.

As a Christian conservative myself, I can tell you that I believe that the 2006 election was just the beginning of a tipping point. The GOP lost touch with the conservative base that sent them to Washington. They engaged in the same kind of chicanery that conservatives always expected of Democrats. Government spending spiralled out of control, as did the expansion of federal domestic programs. We saw corruption creep into the GOP congressional leadership that was a result of that leadership taking their base for granted. Outside the Beltway, where real people live, dissatisfaction was as high as I have ever seen it for the majority party, and so they were sent packing.

2008 is a vitally important election. If the GOP, from top to bottom, goes back to the basics of principled Reagan conservatism, then the voters will reward them. If they don’t, American conservatives will band together and find third party candidates to support. In the short term, that will mean big victories for the Democrats. In the long term? That depends upon how educable the GOP is!

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By Kathlyn, February 23, 2007 at 2:30 pm Link to this comment
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This is the most worthwhile and mind-stretching article I have read in a long time.  I hope it will be widely distributed to leading newspapers and journalists.

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By Rosemary Molloy, February 23, 2007 at 5:58 am Link to this comment
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What do you mean, there’s nothing tangible about Obama?  He’s anti-Iraq war and that’s all I need to know.  Every other issue is far behind in importance for me and for, I believe, millions of other voters.  The Democrats in Congress can’t seem to grasp this—they’re craven cowards—but how is it “pundits” like you don’t, either?

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By TAO Walker, February 23, 2007 at 1:46 am Link to this comment
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Steve Fraser certainly poses a number of compelling questions here.  One he doesn’t, though, is whether the tectonic disturbances he describes in the U.S. socio/political system are themselves merely symptomatic of far larger forces promising (or threatening, if one is ruled by fear) to bring about the collapse and disintegration of this “global” civilization itself.  Yet everything he cites as potentially overturning “the old order” in America is also present worldwide….and magnified proportionately.

It seems peculiarly American, however (to this old Indian who has made a long and close study of the breed), to speculate about possible changes in the seating arrangements in the U.S.S. Corsair-of-state’s officers mess while a perfect storm (of chronic partly self-inflicted stupefaction among the domesticated peoples combining with monumental malfeasance among their ruling classes colliding with ecological blowback some are characterizing as “biblical” in scope) is already well-into its certain-to-be massively consequential sweep across the entire civilized world.  In the midst of it all even Americans (who are deservedly noted for their collossal self-centrism) might not really notice the break-up and sinking of their own mostly-make-believe-anyway paper canoe.

Another critical question nobody is asking is this.  What, exactly, is the organic function of humanity within the living body of the Earth?  There is an equally vital follow-up.  What is the organic form of humanity which gives us the integrity necessary to the fulfillment of our given function here?

These are not “trick” questions.  They have specific answers.  Anyone who doesn’t know the answers should maybe refrain from offering to “lead” anyone else through the cleansing cataclysm that is already upon us. 

Those who do know the answers know also that the no-win game of follow-the-leader is just another lethal exercise in F-U-tility.  The way through this “eye-of-the-needle” resides exclusively in our free wild human nature, not in pretending to be sheep to some media-made shepherd/messiah.

It’s okay, for those whose own human development has been artificially arrested, to look to any grown-up Two-leggeds around for examples of beneficially effective ways to respond to these necessarily trying conditions.  Better get away quick, though, from anyone who wants to tell you what to do….and even quicker from anyone who tries to make you do it.

This is not a test, brothers and sisters.  THIS IS THE ACTUAL EMERGENCY!!!!


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By Bert, February 22, 2007 at 11:36 pm Link to this comment
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I think the federal budget needs to be permanently reduced by about 40%, the national debt reduced and eliminated over the next 5-8 years and they need to do a lot better vetting for candidates for public office, public oversight of any and all federal spending needs to be much-improved, and hearing need to continue to be held regarding the entire Iraq ‘business’, as well as various and sundry other governmental goings-on. When the cat’s away, the mice will play, and vice-versa. Ding, ding. And, the same concept needs to be carried into corporate-land and banking as well.

The democrats currently run our Congress, for the most part, and Congress has the responsibility for fiscal oversight, as well as the authority to
regulate any spending that takes place on behalf of The People. Ergo, the task of cleaning up after the GOP falls to the Democrats. They’ve got 2 choices, and one of them is to go along with the powers-that-be, and the other is to start holding various bodies and persons to public account, and implementing necessary reforms so as to prevent wholesale and systemic defrauding of the public. That sounds like a real bitch of a job to me…but, that’s what they were hired to do, and if they don’t get it done, next election they’ll find themselves ‘outsourced’ to those more willing to get in and do it. Mark Twain said it best: Politicians, like diapers, need frequent changing, and for similar reasons…

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