Posts Tagged ‘Pat Buchanan’
[...] “America, to pay her bills, has begun to sell herself to the world,” argues Pat Buchanan in an article titled Subprime Nation
Its balance sheet gutted by the subprime mortgage crisis, Citicorp got a $7.5 billion injection from Abu Dhabi and is now fishing for $1 billion from Kuwait and $9 billion from China. Beijing has put $5 billion into Morgan Stanley and bought heavily into Barclays Bank.
Merrill-Lynch, ravaged by subprime mortgage losses, sold part of itself to Singapore for $7.5 billion and is seeking another $3 billion to $4 billion from the Arabs. Swiss-based UBS, taking a near $15 billion write-down in subprime mortgages, has gotten an infusion of $10 billion from Singapore.
[Willard Miton Romney's] Bain Capital is partnering with China’s Huawei Technologies in a buyout of 3Com, the U.S. company that provides the technology that protects Pentagon computers from Chinese hackers.
This self-indulgent generation has borrowed itself into unpayable debt. Now the folks from whom we borrowed to buy all that oil and all those cars, electronics and clothes are coming to buy the country we inherited. We are prodigal sons, and the day of reckoning approaches [...]
The word financial system is in crisis. Romney, the equity sector candidate, has nothing to say about it.
Only one candidate—possibly two—speaks clearly and compellingly on the problems that issue from the new capitalism
- Huckabee contra the inequities and inequalities of the financial services industry; is Huckabee sending signals to the Romneys?
- Medved: “[Gov. Huckabee’s] powerful appeal to females, the young and the poor make him a different kind of Republican—[one] who connects with voting blocs the GOP needs to win back—[Gov Huckabee is] hardly the one-dimensional religious candidate of media caricature”
- Brooks: “Romney represents what’s left of Republicanism 1.0. Huckabee and McCain represent half-formed iterations of Republicanism 2.0″
The populism of Gov. Huckabee—and to a lesser degree, Sen. McCain—reduces to a class critique consistent with the conservative principles as we understand them. The premises are these:
(1) Conservatism tolerates—even celebrates—natural hierarchies, e.g. some runners run more swiftly, some businesses profit more than others, some people amass more wealth than others, others are wiser than others etc.
(2) Conservatism tolerates—even celebrates—blind elites, i.e. gate keepers who rule on grounds of merit, examples may include universities, military formations, professional societies, corporate hierarchies, trade unions, craft guilds.
(3) Hence: conservatism in the era of the nation state tends to favor civil society and human commerce as relatively autonomous zones where natural hierarchies and blind elites may develop according to their own inner logic, their own rules.
(4) Here is the problem: the new capitalism,represented by the equity sector—vast pools of spare money, pension funds etc., managed not by owners but by a technically adept professional class with interests of their own—organizes itself according to different rules. When e.g. pension funds fail, the problem is instantly national and political and can cascade through an entire economy. Pension funds and other equity funds command capital reserves far in excess of other market actors.
Say a capital fund like Romney’s Bain Capital owns a stake in a national retailer. Say the retailer fails to perform. Whether the retailer is allowed to fail, whether the retailer is allowed to persist until market conditions change, or whether the retailer is “turned-around” by e.g. “re-engineering,” purging the management, downsizing, out-sourcing etc.—these are all reduced to technical questions. In other words, in the era of owner-less capital, competition and innovation take on a different characters—what we are confronted with, suddenly, is the antithesis of capitalism—what we are confronted with is a de facto planned economy in which profits are privatized, and costs—in the form of crashes and failures—are socialized. In other words, we don’t get a say in the planning. But when things fail it is we—pensioners, taxpayers—who get to pay for it.
“Pension fund socialism,” is what Peter Drucker called it in the 1970s when he predicted its rise. Well, it’s here.
(5) Further, economic development in general, productive capacities in particular, are more generalized globally. The US economy’s productivity relative to the rest of the world is in steep decline. The cost of energy has also increased precipitously; the entire post-war boom was largely an artifact of cheap energy, an enormous subsidy that we increasingly no longer enjoy. When energy-transfer systems or social systems experience supply shocks or the marginal returns on their investments begin to diminish, they begin to differentiate; their hierarchies begin to steepen. The rich become richer and the poor become poorer, to use a tired cliche. The rise of the equity sector is a part of this socio-material-historical process.
(6) Hence: neo-populism, and neo-populist proposals as articulated by Gov. Huckabee and Sen. McCain. Their critique is class as opposed to market or system based. Note that Sen. McCain in MI argued that the jobs lost to US industry were lost forever. What was required was investment in worker retraining and newer, lighter and more agile industries consonant with the historical moment. Also: Sen. McCain opposed Pres. Bush the younger’s tax cuts as he believed they benefited the rich etc.
Populism and class criticism in general is anathema to the Reagan coalition assumption about how productivity generalizes itself throughout a system. Allow the most disposed to do so to prosper as freely as possible—those who work hard, those who lead or innovate, those who can attract, organize, and develop income-producing capital—and everyone prospers as the newly developed wealth distributes itself throughout an economy, is the argument.
But what if the era itself no longer supports capital formation as construed classically? What if the new capitalists—or new non-capitalists, as they no longer own but only dispose of capital owned more generally—are capitalists like the steward capitalists of Bain Capital? For the capitalists of the industrial era the primary unit of production of circulation was the commodity, and everything got commodified—time and space itself got commodified. For the new non-capitalist the primary unit of production and circulation is the security, and everything is getting securitized.
Take, for example, mortgages, especially subprime mortgages. What drove so much cash into the mortgage markets were the banks, capital funds, pension funds etc., trading in the new mortgage-backed securities.
Politics and political life is a lagging sector. The sad truth is that no one yet knows what to make of these developments. Gov. Huckabee and Sen. McCain represent an intuitive and under-theorized response that hardly rises to the dignity of a knee-jerk reaction to the perception of great danger. But it is a response. And it is a start.
Here is what we believe is most perverse. Romney, after months of savaging Gov. Huckabee’s views and opinions on the economy, suddenly becomes Gov. Huckabee in MI. Romney becomes a populist. Suddenly this super-rich non-capitalist sides with the oppressed against entrenched powers in Washington, a city that Romney says “is broken.” But just as Romney’s alleged, ingenue, and now abandoned conservatism was always clumsy and caricatured, so too is his atavistic fantasy-populism. See: