There’s a Revolution Going On in the US, Will Hutton

Opinion, October 2003, www.aljazeerah.info

There’s a Revolution Going On in the US

Will Hutton

The Guardian, Arab News

LONDON, 15 October 2003 — Britain’s political class and commentators just don’t get contemporary America. They don’t understand the revolutionary nature of US conservatism and the profundity of its ambitions. They don’t understand the extraordinary self-serving venality of corporate America and its Republican allies. They don’t understand the ruthless pursuit of radical conservative interests and disregard for all others. They think, like Tony Blair, that America is having an eccentric wobble — and that if George Bush is engaged with, it will sooner or later be business as usual.

They should read these two books (The Great Unravelling: From Boom to Bust in Three Short Years by Paul Krugman and The Roaring Nineties by Joseph Stiglitz) and be disabused.

I should declare an interest; I have long regarded the Nobel prize-winning Joseph Stiglitz and Princeton University’s Paul Krugman as two of the best around. And so it proves. Stiglitz’s careful dissection of the follies of the “Roaring Nineties” and the conservative thinking that produced them — penetrating the Clinton administration — is as good as it gets, and while I am wary of collections of columns as dull retreads (I plead guilty to having inflicted one upon the reading public myself), Krugman gets away with it on two counts. First, I only read a few of them in the original; and second, he begins his book with an introduction of such power that it is worth the price alone.

Krugman states a truth from which many still shrink: today’s conservatives are radical revolutionaries who do not accept the legitimacy of America’s current political system and aim to subvert it. Their goals are the establishment of an American military imperium abroad, under American rather than international law, and to minimize the responsibilities of the rich and corporate America to the common weal at home. This is so breathtaking, says Krugman, that to say it risks being condemned as alarmist. Indeed, quoting Henry Kissinger, he argues it is one of the characteristics of revolutionary power that it draws just this response; it is those who “counsel adaptation to circumstances who are considered balanced and sane”. Consensual mainstream opinion cannot come to terms with the radicalism of the revolutionaries — it is too far outside its ambit. It seems delusional, almost hysterical, to acknowledge what is really happening.

Krugman sets out the five maxims that must govern reporting in such a context: Don’t assume any policy proposals make sense in terms of their stated goals; do some homework to discover the real goals; don’t assume the normal rules of politics apply; expect a revolutionary power to respond to criticism by attacking; and don’t think there’s a limit to a revolutionary power’s objectives. His columns set out how he follows his own maxims in explaining the range of Bush’s policies since he took office — from the conduct of economic policy, to how Bush and his political adviser, Karl Rove, shamelessly exploited Sept. 11 for partisan ends.

It is a revelatory picture, and it will leave those who don’t know America well shaking their heads in disbelief. Can it really be true that the regulators of the media and the securities industry are so completely compromised by their association with their Republican bosses and the industries they regulate? How is it possible that any government at any time could organize tax cuts to the rich on Bush’s scale and present them as a patriotic economic stimulus that only traitors disagree with? Is it possible that any group of men and women could reward themselves as extravagantly as contemporary American chief executive officers, claiming enormous benefits for the companies they run, when in fact the benefits are paltry? How do people become this self-serving? And perhaps most worrying of all, Krugman shows how the American media have given up on active scrutiny — partly because the truth seems so incredible and partly because a sizable proportion is owned by Republican interests.

Why has this happened? Stiglitz’s answer is that the American center and left have allowed the right to win the economic argument with a set of market fundamentalist propositions that are downright wrong — but which have the pleasing consequence for conservatives of validating their every prejudice and allowing them to dress up serving their own interests as promoting the common good. It was the confluence of this thinking with the unique circumstances of the post-cold war 1990s that led to the extraordinary and unsustainable boom. As chair of President Clinton’s Council of Economic Advisers for four years and chief economist of the World Bank for three, Stiglitz had a bird’s eye view of how the contagion infected the Democrats — and made them collaborators with the trends they deplored.

There is an element of confessional breast-beating in Stiglitz’s book — and occasionally the overlap with his previous work, Globalization and Its Discontents, gives you a sense of deja vu. Some of this Stiglitz has said before. Nonetheless his account of how a group of smart economists and policy thinkers with impeccable liberal credentials found themselves zealously cutting public spending, deregulating, privatizing and even cutting capital gains tax, is important and well-marshaled. Time and again the combination of powerful corporate lobbies and appeals to the “rightness” of the new conservative economic consensus made it impossible for the Clinton administration to make progress, or even to shape deregulation in a less damaging way.

Stiglitz is a stout defender of the role of government, basing his view on the economics of information for which he won a Nobel Prize. Of course markets don’t work perfectly; they are structured so that insiders have more information than outsiders — so that prices don’t reflect costs and excess profits and rents abound. Unless government is on hand to correct the imbalance with regulation, promoting competition and acting itself, markets will produce all kinds of follies — of which the 90s boom was the quintessential expression. The hangover of debt and bankruptcy is costing the US economy hundreds of billions in lost output; and all because the insiders — CEOs, investment bankers, corporate lobbyists — went on the rampage, aided and abetted by Republicans. Stiglitz’s account of how the lobbyists shaped the 1996 Telecoms Act, opening up telecommunications to new entrants with minimal regulation in the name of “competition”, is an eye-opener. In effect, despite self-serving talk of competition, they were giving a license for an orgy of bids and deals as the industry jostled for what it knew were captive franchises (mobile and cable networks).

The strength of the two books is their authors’ deployment of economic analysis to expose the duplicity, wrong-headedness and costs of conservative economic policies — and their streetwise awareness of who benefits and why. The weakness is that, while both deplore what is happening, neither offers a satisfactory explanation of quite why conservative America has the grip it has.

Earth, a planet hungry for peace

The Israeli apartheid (security) wall around Palestinian population centers (Ran Cohen, pmc, 5/24/03).

The Israeli apartheid (security) wall around Palestinian population centers in the West Bank (Ran Cohen, pmc, 5/24/03).