The populist outrage over AIG bonuses, and bailouts that seem to pay off the perpetrators of the financial crisis — while millions are left out of work with no medical benefits, and unemployment benefits running out long before job growth returns — is heading towards a social and political, not just economic, tipping point.
Already, the Obama administration is running out of political capital to legislatively pump more capital infusions into the existing banking system. But Republicans and conservative Democrats are prepared to block a public takeover of the banks that most of the world’s economists are proclaiming essential to restoring the solvency of the banking system. In addition Republicans are working industriously and cynically to divert public frustration into dead-end criticism, attempting to blame anyone but themselves for the disaster they brought on the nation and the world. Thus Treasury Secretary Geithner’s latest non-legislative initiative to clean out toxic assets is given a low chance of success by most observers. How soon till the tipping point? Well, it took only 72 hours following the Katrina disaster before scenes of horror took over in New Orleans — and many communities are beginning to look similarly devastated. Three of the most respected U.S. economists, Paul Krugman, Joseph Stiglitz and Ken Rogoff, are starkly warning that not just an economic but a social catastrophe is looming if forceful action is not taken. But from this moment, it looks as if the U.S. political system, compromised over decades by corrupt and reactionary interests, is not capable — on its own — of making the adjustments necessary to meet the challenge of the unprecedented scale of this crisis. As Martin Wolf commented today in the Financial Times, it appears that President Obama will have to attend the critical G20 meeting of the top industrialized nations in London next week to address the global crisis without a clear recovery plan. And there is not much in the world that is scarier than that. The Lincoln-like demeanor and aspirations of President Barack Obama may be tested as none have been since the 16th president himself. The truth is that the destiny of our country is in the hands of the masses of working people of the United States. Right now. If we can move together to push the diversionary and backward-looking forces of finance capital and reaction to the side of the historical stage, then the mounting populist explosion can be directed toward insuring that the American story will play out in a new and higher quality of life for all. But if we do not, then it is hard to even measure the depth of the tragedies to come. Populist outrage can turn inward against itself if we do not put our hands to the wheels of cooperation, mobilization, organization and progressive change. Let’s talk to each other, take care of each other, and find the path that unites.
As Carl Davidson of Progressives For Obama signs his emails: “If we do not change direction, we are likely to end up where we are headed” (Chinese proverb), and “If you don’t have a strategy, you’re part of someone else’s strategy” (Alvin Toffler).
jcase4218 @ gmail.com
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