by Jay Thiemeyer
 Details
The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too
by James K. Galbraith
Publisher:
Free Press, 2008 |
The conservative economic wave is receding. Revealing in its retreat the permanence of those quasi social welfare institutions, the legacy of the New Deal, and the Great Society, Social Security, Medicaid, Medicare, and the like.
The reasonableness of government intervention to build on the rubble of deregulation, irrational obsession with balanced budgets, reducing inflation, tax cuts, and free trade. In short, the utter failure of the free market. That new dawn is the subject of this title.
The author of numerous books on the economy, notably “Created Unequal, James K. Galbraith has produced with his latest, “The Predator State,” a clear picture of why and how the Reagan Revolution died. And a riddance liberals must learn to accept!
He dissects the Bush administration, which he calls the “corporate republic,” where corruption and unrestrained cronyism along with legislation by lobbyists has culminated in an entrenched CEO “oligarchy.” And the meltdown in our economy, which is only beginning.
How do we get out? For one thing, Galbraith warns against fear of debt-spending. The massive bailout of Treasury Secretary Henry Paulson’s cronies is problematic, but in times of crisis, taking on debt to revive the economy makes sense. Rebuilding the infrastructure is a lifesaver and worth temporary indebtedness. It will pay for itself in the long-run.
How does this bear on Obama and the new stimulus effort? It is worth noting one of the soft spots in the new president’s agenda — health care reform — as an example. Much of the derivative market is difficult to comprehend, much less untangle. But health care is another matter. The situation is clear and the solution simple. A single-payer, universal access system is doable and would provide an immediate economic stimulus. Let the private insurance industry declare bankruptcy with the automakers. Many ordinary Americans are already declaring bankruptcy due to exorbitant emergency medical bills. Many face foreclosure because of the unaffordability of a medical emergency.
Making predators pay for remedy
Galbraith channels not only John Maynard Keynes but his father, J.K. Galbraith, in his insistence on planning and standards, as well as the sharp insights of Thorstein Veblen.
In “Theory of the Leisure Class,” Veblen states predation is a phase of cultural evolutionone we seem to have reverted to. How, Galbraith asks, has the “new class” of CEO oligarchs parlayed their wealth into power, into a predator state?
“The experience of the past decade permits a very simple summary explanation: They set out to take over the state and run it — not for any ideological project but simply in a way that would bring them, individually and as a group, the most money, the most undisturbed power, and the greatest chance of rescue should something go wrong. That is, they set out to prey on the existing institutions of the American regulatory and welfare system.”
Keynes stood on his head, in other words.
So, Medicare isn’t dismantled, there is simply added Medicare Part D, the huge subsidy to the pharmaceutical industry. Public education isn’t merely displaced by private schools and vouchers, a program called No Child Left Behind is legislated, and a corporation called Reading First, with ties to the president, monopolizes the lesson plans required. FEMA becomes a trough for corrupt reconstruction outfits of dubious competence. And so on.
Galbraith notes that the idea for his book arrived around the time of Hurricane Katrina. Many of its refugees landed in his hometown of Austin, Texas, where he teaches as chaired professor in the LBJ School.
“It seemed clear that Katrina had been the Chernobyl of the American system. That is, beyond the natural calamity and the human tragedy, it was — like the Soviet reactor meltdown 19 years before — a disaster that exposed and laid bare the fallacies of an entire governing creed.”
It is those fallacies recognized by Milton Friedman, the great expositor of free market triumphalism, shortly before his death, and more recently, the great deregulator, Alan Greenspan, that the author discusses with a humor and salience that brings to mind his father. And Veblen.
“Here is the key question: What would be the impact on the dollar of a major change in American policy, away from predation and toward collective international security, toward domestic full employment and infrastructure renewal, and toward renewed technological leadership in the areas most needed by the world, such as climate change?”
One can point also to universal, single payer health care, with no private health industry allowed. Corporate charlatans have had their day.
Jay Thiemeyer is a frequent contributor to The Portland Alliance and also Street Roots. He is cohost of the KBOO radio show, “Hole in the Bucket,” on homelessness.
