The AIG bonuses were a distraction. Even the counter-parties of AIG is a distraction, in that the real bottom line is this: all of the different programs announced so far, from the first firebreaks which were supposed to "contain" the "sub-prime crisis" – ah for the days when serious people could blame this on a few, implicitly non-white, borrowers – to the present put money in the same place. That "money" is really a place holder for future tax revenues. It is not money in the sense of money that will be used to go out and buy new things, but money which is meant to prevent banks from being technically insolvent, and to provide enough liquidity so that a market in the complex financial bets can be made. The bonuses handed out to executives and others, are their share of the take for having arranged a government bail out.
But it’s time to dig at the root of the problem and face that problem more directly: it is not the mechanics of the financial crisis which are at issue. It is America’s addiction to imported capital. It is not that we have a "global savings glut" but that the United States is a deficit culture which is overspending on many of the wrong things. Changing this reality is not something that a President, any President can do. Indeed the current structure of the Senate allows a relatively small set of beneficiaries to hold hostage the larger economy.
One of the first steps to change is to realize that the left is divided into three different groups, and, to date, rather small and even petty personal feuds have done more damage than good. Solving these personal divisions, driven by professional ambitions more than a genuine concern for the good of the country, will do more to advance change in America than any single government program that could be proposed. At the root of these divisions is an almost universally unstated three part division of much of the left in America – a left which is not, on the global scale, all that far to the left.
The first of these groups is the financial left. This motto of this group is "a rising tide lifts all boats," and its intellectual roots reach back even to the era of "gold Democrats" such as Grover Cleveland. The advantages of this view point are many. First, it has a direct opposite numbers among the Republicans. It does not rock the boat in terms of the structure of elites. Finance also has an almost magical quality, in that it can heal an economy rather rapidly – as soon as the blocked arteries of lending are cleared, good times return. Robert Rubin, Larry Summers, Tim Geithner, and yes, Barack Obama are all members of this wing of the left. The idea is to produce efficiencies and distribute the benefits widely. This wing has risen to being the most important wing of the party, particularly with the rise of money in media politics. The financial wing of the party is the wing that does most of the funding of the left, with its large donors and clear understanding of benefits. Suburban voters are drawn to this wing, because it represents the office dwelling middle class. The public discourse is driven, to no small extent by those who invest their future in this system, and those who manage that money.
The second of these groups is the labor left. This group is centered on the concerns of "working Americans." The labor left provides much of the operational muscle of the Democratic Party. This wing of the Democratic Party which is the political bedrock in much of the urban areas of the party. It is the wing that FDR’s labor reforms enabled, which the Second World War and Post-War era made fundemental to the security of the United States. It is the wing that has fallen farthest in power and influence, in that, at one time, the Democratic Party was firmly rooted in the Congress in its labor wing. The labor wing is not adverse to the system as it is, but believes that that system should be far more directed to a greater good for a greater number. Many of the bricks and mortar liberal organizations such as EPI and the CEPR, are rooted in this view. Many of the heros of modern liberalism were the architects of its ideas, truisms, and theories.
The third of these groups is a left that has taken on many labels. It is the most progressive of the wings, and is rooted in a longer term vision for change in America than either of the first two groups. It sees the long term threats to America, and indeed the world, and desires, or even demands, that action to prevent the worst possible outcomes be pursued. It is this group that sees global warming and peak oil as dramatic threats to global stability. It is this group that most strongly advises large structural changes in the American polity, and in the mechanisms by which it operates. For members of this group, universal health care is not a goal, it is a means to restructuring the American economy itself.
One of the key divisions between these groups is their concept of what America’s national rent is. For the first group, the continuation of the financial system is the central national rent, that thing which America’s preëminence in the world rests upon. This is why the Obama administration is focusing so much on the banking crisis, because the collapse of this rent seems, to them, catastrophic.
The second group’s view of the national rent developed during the times of mass mobilization for warfare, in a sense it was Lincoln’s observation about labor being prior to capital is the basis for this view, but it was with a series of crisis points that required mass mobilization that it became rooted in the very formalisms of goverment itself. World War I, the Great Depression, World War II, and the first part of the Cold War, were all dealt with by mobilization responses.
The third group’s view of America’s national rent is based in the belief that there are broad and global threats which are not rooted in particular enemies, or particular points of crisis, but in the nature of the human condition and our relationship with the world we live in. It has a diversity of antecedants, from techno-utopian visions from Star Trek, to the sense of nobility of the free soil found in Steinbeck. It is anti-consumer, in the sense that consumption as the first priority seems to contradict the need to manage resources and deal with problems before they explode.
In the current political universe, the financial view is under a cloud because of the current economic crisis. It seems that the prescriptions of financial deregulation, balanced budgets, and centrism have failed, but have not yet lost the faith of the inside of the corridors of power. Anger is rising at the seeming incrementalism of the solutions, the focus on bailing out bankers, rather than on getting America’s workforce moving again, and at the confused message. However, since there has been no cohesive counter plan yet enunciated, and there is no other core of political activity that the public trusts, it is the dominant political wing of the left in America.
The second view is far more represented in Congress, with old "liberal lions" identified with it, and a large number of representatives who rose with a clear mandate from their voters to revive the union movement in America, and use that movement to protect, or even expand, the interests and entitlements that once were taken for granted as part of having a good job in America. Its problems run deep, in that mobilization has not been seen as the basic national rent for some time, and the methods of mobilization liberalism have been in disrepute both with the right, and another segment of the left, since Vietnam and the inflation of the 1970’s seemed to disprove the entire concept that a mobilization of national will could overcome almost all problems.
The third view has both the longest and the shortest political history. In one sense techno-visionairies, and searchers for a personal autonomy, find very direct expression in the founding documents of the United States of America. The Declaration of Independence mentions many things as essential, but banks are not mentioned at all. The Constitution touchs on coinage and free trade, but the Bill of Rights and other guarantees of rights that it has, are not largely cast in economic terms. However, it is also the newest member of the Democratic coalition as a force of growing organization, it has almost no representatives, it has few institutions, and none of long standing – even though it has an hypnotic resonance which has drawn millions into it.
Reconciling these three views is the political work of the left in the present. Right now, there is far too narrow a range of opinion within the corridors of power, and the debate on the left has had people talking past each other. Instead of cogent criticism, there is a great deal of political manuevering for positions. It is far easier to keep score at Treasury than to combine widely different policy directions. It is far easier to exclude indivduals who are not from the right club, than it is to piece together legislation from all of them.
However, until this happens, the left will remain scattered and unable to reach closure on the single most important political objective of the present: namely, foreclosing a neo-conservative right whose views are responsible for this economic meltdown, and for the paucity of options. It was not Democratic Presidents who racked up the national debt to stratospheric levels. While many members of the Democratic Party were involved with, or acquiescent to, the war in Iraq, it was a policy driven by ideas of the right.
This remnant political force, given political form by Nixon, and political spirit by Reagan, is still entrenched in media, and in corporations. It has a voting bloc in the Senate which is larger than any liberal bloc, and it has a discipline which the Democratic Party does not have. Until the three views of the left are unified, and all of the various important players in those views brought into a single fluid discourse of ideas, there will be a start and stop quality, as a few people attempt to use political leverage to end run what is really a very difficult intellectual and social debate. The ambivalence this creates – with people wholy supportive of a successfu Obama Administration, and the exciting potential for a new progressive era, while being angry at the possibility of a Carter-style meltdown of governance – is destructive to the progressive of the progressive idea, and against the inevitable historical logic of the Democratic Party as its instrument.