On 2010-11-22, at 5:38 PM, Doug Henwood wrote:
> Remember what Greenspan said about the housing market in 2005.
Actually, Greenspan is another good example of a bourgeois critic who thinks the Obama administration has been too soft on the banks and has not in this respect acted as a good custodian of the capitalist system. He has said that if Morgan Stanley, Bank of America, Wells Fargo, and the other big banks are “too big to fail, they’re too big...In 1911, we broke up Standard Oil. So what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”
He has also conceded he was wrong about the housing bubble in 2005, and seems to have abandoned his laissez-faire view that asset bubbles should be burst by market forces rather than Fed intervention, with the Fed and the Treasury assigned the task of mopping up the mess later.
If the Obama administration has balked at fundamental reform, it's because the economic and social crisis is not as deep as in the 30's, and its corresponding belief that the working class can bear the entire burden of adjustment. If the current downturn were to become more severe, it would be forced to consider more radical measures, including the temporary nationalization of the banking system and more urgent action to put people back to work. That someone like Greenspan can contemplate such measures at this stage indicates that even the most ideologically hidebound Republicans would be willing to make the necessary concessions if the system's survival appeared to be at stake.
Whether they would have the resources to do so is unknowable. But the left has to date underestimated the bourgeoisie's ability to adapt and the resiliency of the capitalist system, which has led it to see every economic crisis and outburst of social protest as the harbinger of its impending catastrophic demise.