On 2010-03-15, at 9:02 PM, Doug Henwood wrote:
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> On Mar 15, 2010, at 8:09 PM, James Heartfield wrote:
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>> I am just surprised that included in those right wing views is a negative opinion of massive subsidies to capitalism, while the left must adopt the role of defending welfare handouts for billionaire bankers.
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> That's one way to put it. Another way would be to say that the left has supported state intervention to prevent depressions while the right has followed the Mellon "liquidate, liquidate, liquidate" line.
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I agree with Doug's point, but don't see how it extends to the bank bailouts, which is what James is criticizing. A proper policy to me would have been to direct massive state lending and spending in the first place at household debt relief and the maintenance of jobs and mass purchasing power. How much persuasive evidence is there that the entire international financial edifice would have been brought down if a major bank like Citi, B of A, or even Goldman had been allowed to fail?
As it was, the credit system did seize up after the Lehman collapse, but the Fed and other central banks were able to step in with emergency short-term lending facilities until the money markets resumed functioning after the panic subsided. During that period, you'll recall also that the nationalization of (insolvent) banks became a respectable demand all across the political spectrum, with the Swedish and S&L precedents contrasted favourably to the propping up of zombie banks in Japan. I don't see how the left should have done anything other than throw its weight behind its own historic demand for public ownership and control of the financial system, even if mainstream economists and regulators saw the takeover and restructuring of failed banks as a temporary expedient rather than a permanent advance.