Dennis Redmond writes:
I've been scratching my head since last October
> about how the notion of "letting them fail" might be a pathway to a
> Leftwing position, but haven't succeeded. Maybe it could provide a
> jumping-off point for a conversation about the ways US capitalism is a
> catastrophic economic, geopolitical and human failure, even in relation to
> other (Euro/Asian/developmental-state) capitalisms.
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Yes, that - and, in practice, "let them fail" means temporary
nationalization through an RTC-type mechanism rather than the current policy
of massive state subsidization of insolvent banks, which transfers
responsibility for their liabilities from bondholders and shareholders, who
would otherwise be wiped out, to taxpayers. Supporting the demand for
nationalization or "conservatorship", temporary or not, no matter how it is
presented, seems to me to be a "pathway to a Leftwing position" in that it
raises the class issue of "who pays?" as well as inevitably placing the
issue of enduring state ownership versus "temporary" nationalization on the
agenda, and the differing class purpose served by each.
The moment for such debate seems to have passed for now, following the stress tests and loosening of mark-to-market accounting and the apparent restoration of stability and profitability to the financial sector, but this disguises that the distressed assets remain on the books, unemployment and real estate (esp. commercial) remain a worry, and Citi and other weaker Wall Street banks remain on government life support, so nationalization might yet well return as an issue.