By John Laun
The week of September 15 – 21 brought a basic change in the approach of the U.S. government. The Bush administration, having mismanaged the economy spectacularly by eschewing regulatory oversight of the financial markets, decided on a 180 degree change to “save” the US economy. As the stock market sank and banks appeared more and more threatened, Bush and his advisers abandoned their supposed philosophical distrust of “big government” and presented the U.S. Congress with a “bailout” plan which will ( if Congress accepts it, which with a few changes on the periphery it almost certainly will) effectively nationalize the US financial system, making private enterprise dependent upon government investment for its survival. Now many of those who opposed regulation yesterday are praising it as essential today. For instance, a befuddled John McCain announced one day his opposition to the government bailout of the insurance behemoth AIG, only to praise it the next day when Bush and company decided it was necessary.
What we may clearly observe here is the bankruptcy, not just of fraudulently and carelessly run business and financial institutions, but of the Bush administration’s approach to the economy itself. The question for us now is how will this gigantic failure affect US foreign policy. If we have learned one thing from the spectacular failure of economic policy in the U.S. it is that a policy which trusts “market forces” by themselves to bring prosperity to everyone with a minimal of regulation, has been empirically shown to be flawed. An economic policy which celebrates a system in which the CEO’s of major financial institutions and businesses can take for themselves huge salaries while the institutions they lead are losing money, is a policy which will fail. We now know that an economic policy which promotes income inequality and ignores the basic needs of its citizens for food, shelter, health care and education is doomed to failure. The Reagan Revolution’s prime principle that “that government is best which governs least” and “government is the problem” has been totally discredited..
The new artifice in this country should focus on the providing of basic needs at reasonable cost to all of this country’s residents. Upon that basis a strong economy not subject to the vicissitudes of unregulated market capitalism can be built.
Interestingly, several countries in South America have come to that same conclusion and are building a multilateral structure through which the governments in those countries —Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, Uruguay and Venezuela—can implement economic policies which seek to answer the needs of the poor and the middle classes, and not to line the pockets of the rich and politically powerful. Instead of dismissing the economic policies of the governments of Evo Morales in Bolivia and Hugo Chavez in Venezuela, each declaredly “socialist”, US policy makers would do well as they implement government bailouts ( a type of “socialism” one might say) to follow the lead of these countries in developing programs aimed at guaranteeing a certain basic standard of living for all of the country’s residents.
In light of this it was striking to see President Bush welcome to the White House the President of Colombia, Alvaro Uribe Velez, the principal ( and perhaps only) South American defender of the capitalist model which has brought the U.S. financial system and many, many U.S. citizens to the edge of the abyss. Alvaro Uribe has presided over the displacement of millions of peasants, Afro- Colombians and indigenous peoples as he promotes large-scale export agriculture and a bilateral Free Trade Agreement (FTA) with the U.S. which will enshrine the interest of the rich and powerful as it decimates the rural poor. And his policies have undercut social security programs and dismantled unions, while continuing to place union members’ lives at risk from paramilitary threats. As evidence continues to mount of the close ties of President Uribe’s advisors and his party to paramilitaries, one would hope that, given these revelations, Colombians would reject implementation of the FTA and instead replace alliance to Bush with active participation in the new South American alliance.
September 21, 2008