“Anatomy of a Meltdown” in the recent edition of The New Yorker ((Dec 1, 2008) begins, “Some are born radical. Some are made radical. And some have radicalism thrust upon them.” The article goes on at length to explore the rapid evolution of the federal response to the financial crisis, through which formerly free market acolytes in the Treasury Department and Federal Reserve responded with the most sweeping federal intervention in US economic history. It occurs that the point about radicalism is largely missed.
The radicalism distilled through the last decade is the idea that government is the problem. It is an idea that hacked at the foundation of democracy; in the conduct of war, in the repression of individual freedom, in the safety of our air and water, and America’s standing in the world.
The idea that government is the problem is at the heart of the Republican Reformation that began in the 1994 Congressional mid-term elections and propelled Bush political fortunes in Tallahassee and Washington, DC. Its dominant strain defined Republican values; a cause for war against government lead by Karl Rove, Grover Norquist and conservative foundations that still supply bankrupt ideas as intellectual capital.
Then Florida Governor Jeb Bush articulated the cause for war in his 2003 inauguration address when he said: “There will be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers; as silent monuments to the time when government played a larger role than it deserved or could adequately fill.”
The workers he meant to get rid of– the meaning was clear to the invited audience– were regulators. And, mainly, environmental regulators. The Bush assault against environmental regulations represented the high water mark for a Forty Year War; exhausting itself not through any act of environmentalism but because of the financial crisis, triggered by the suppression of regulations. Still, the war is visible most clearly in places like South Florida where the trampling of rules and intimidation of regulators goes on throughout local government without criticism or penalty.
Today General Motors Corp.’s board is meeting in Detroit to discuss a rescue plan to present to Congress that may determine, according to Bloomberg News, “if Chief Executive Officer Rick Wagoner can save the company and keep his job.” I wonder why the board of directors of GM should keep their jobs.
Among GM’s board of directors is Miami’s Armando Codina, who brought Jeb Bush into the real estate industry where he made his fortune and is one of George W. Bush’s strongest supporters. Codina joined the GM board in 2002. According to the GM website, Codina is also a board director of Merrill Lynch.
The fall of GM has its roots in a business model that no one dared to criticize beyond environmentalists who for decades pleaded with Congress and the states to clamp down on selling private ownership of cars and trucks by the pound of metal; the more pounds, the more profit for auto manufacturers, oil producers and gasoline distributers, and production home builders.
More suburbs, more cars. What this easy-to-grasp formula fails to capture is how fiscal stewardship of the largest publicly owned corporations used the mantra “government is the problem” to avoid regulation and spurn protections of the environment while encouraging the proliferation of unsustainable credit based on toxic derivatives; the undoing of Merrill and trillions of value now disappeared.
Today, the Wall Street Journal speculates on whether Rick Wagoner, GM chief, will be able to keep his job. Its fretting is directed to the legacy cost of pensions, healthcare, executive compensation and union agreements hammered out in times when even union leaders could ignore the peril of financial gerrymandering. If taxpayers bail out GM, its board of directors should be asked to leave by Congress, as should the boards of any publicly held that receive the blessing of free market economic ministers now turned radical government interventionists.
ALAN FARAGO, who writes on the environment and politics from Coral Gables, Florida, and can be reached at email@example.com