“We have to see that the economy is not “in” crisis, the economy is itself the crisis.”–from The Coming Insurrection
Here in America, it is often one hears (thanks to MSNBC and Fox News) that the current economic woes are either the fault of Bush and the Republicans, or Obama and the Democrats. So which group is really to blame? In truth, both and neither. Both neoliberal (libertarian or fiscally conservative, in American discourse) and Marxist economic theorists agree that the boom-bust cycle is an intrinsic mechanism of the capitalist system. It is true that government policy plays a role, but government policy is usually either aimed at prolonging the expansion of a bubble, or creating a new one after one bursts. Part of it also has to do with the fact that people chosen to regulate the investment and speculation which causes economic bubbles often have personal relationships with people whose activities they are supposed to be regulating, or sometimes are picked from the investment class itself. Democrats and Republicans over the last two decades have been have maintained a fairly consistent policy of deregulation of Wall Street, and both parties passed legislation to give taxpayer bailouts to failing banking conglomerates. Now, with no hint of realizing the irony, both parties seem to want to run on a supposedly anti-corporate platform, wishing to have the public outcry over the bailouts to propel them to or keep them in office. We can reasonably expect this populism to be disingenuous for both parties, as now thanks to a new Supreme Court ruling, corporations no longer have any limits on the amount they can donate to political campaigns, making it even easier to buy influence in government than it has been in the recent past.
In all likelihood, we will soon see growth return to the economy, but this will not mean the problem has been fixed, but rather deferred for an indeterminate amount of time. Some suggest that with the expansion of global capitalism, boom and bust cycles will occur more frequently. In the end, if we wish to truly solve the problem, we must rethink the structure of the economy itself, as stimuli, bailouts and regulations will ultimately only allow the boom-bust cycles to continue with regularity. Meanwhile, notice that the executives at the top of the bailed out failed banks gave themselves bonuses while at the same time laying off workers at the bottom rungs of the corporate ladder. Rather than being forced to learn a lesson about their mistaken adventures in creative finance, the people at the top of the investment class rewarded themselves for their mistakes, and learned that they could get away with making other people (their workers and the taxpayers) pay for them instead. There seems to be little indication that this will change anytime soon. It is a perverse system where those who benefit the most from the economic upswings are those who experience the least setbacks in the downturns. That’s hardly the meritocracy that American capitalism’s defenders claim it to be.
