News and Features
Following the September 11 attacks, the federal government rounded up more than
1,000 people and detained them without revealing their identities.
Women are a driving force behind reform in the Catholic Church.
One bubble burst, then another and another. Enron, Global Crossing,
WorldCom. The rectitude of auditors--pop. Faith in corporate CEOs and
stock market analysts--pop, pop. The self-righteous prestige of
Citigroup and J.P. Morgan Chase--pop and pop again. The largest bubble
is the stock market's, and it may not yet be fully deflated. These
dizzying events are not an occasion for champagne music because the
bursting bubbles have cast millions of Americans into deep personal
losses, destroyed trillions of dollars in capital, especially retirement
savings, and littered the economic landscape with corporate wreckage.
Ex-drinker George W. Bush explained that a "binge" is always followed by
the inevitable "hangover." What he did not say is that the "binge" that
has just ended with so much pain for the country was the conservative
Economic liberalism prevailed from the New Deal forward but broke down
in the late 1960s when it was unable to resolve doctrinal failures
including an inability to confront persistent inflation. Now market
orthodoxy is coming apart as a result of its own distinctive failures.
It can neither explain the economic disorders before us nor remedy them
because, in fact, its doctrine of reckless laissez-faire produced them.
The bursting bubbles are not accidents or the work of a few
larceny-prone executives. They are the consequence of everything the
conservative ascendancy sought to achieve--the savagery and injustice of
unregulated markets, the blind willfulness of unaccountable
We will be a long time getting over the conservative "hangover." It may
even take some years before politicians and policy thinkers grasp that
the old order is fallen. But this season marks a dramatic starting point
for thinking anew. Left-liberal progressives have been pinned down in
rearguard defensive actions for nearly thirty years, but now they have
to learn how to play offense again. Though still marginalized and
ignored, progressives will determine how fast the governing ethos can be
changed, because the pace will be set largely by the strength of their
ideas, their strategic shrewdness and, above all, the depth of their
convictions. That may sound fanciful to perennial pessimists, but if you
look back at the rise of the conservative orthodoxy, it was not driven
by mainstream conservatives or the Republican Party but by those
dedicated right-wingers who knew what they believed and believed, most
improbably, that their ideas would prevail.
The new agenda falls roughly into three parts, and the first might be
described as "restoring the New Deal." That is, the first round of
necessary reforms, like the Sarbanes bill already enacted, must
basically restore principles and economic assurances that Americans used
to enjoy--the protections inherited from the liberal era that were
destroyed or severely damaged by right-wing deregulation and corporate
corruption of government. Pension funds, for instance, lost horrendously
in the stock market collapse and face a potentially explosive crisis
because corporate managers gamed the pension savings to inflate company
profits. Employees of all kinds deserve a supervisory voice in managing
this wealth, but Congress should also ask why corporations are allowed
such privileged control over other people's money. Broader reform will
confront the disgraceful fact that only half the work force has any
pension at all beyond Social Security and set out to create tax
incentives and penalties to change this.
Another major reconstruction is needed in antitrust law, to restore and
modernize the legal doctrine systematically gutted by the Reagan era
(and only marginally repaired under Clinton). The financial debacle
includes scores of companies concocted by endless mergers that pumped up
the stock price but added no real economic value. Others sought to build
the dominance of oligopoly and have succeeded across many sectors.
Spectacular failures include AOL Time Warner and the airline industry.
Skepticism of unlimited bigness needs to be renewed and should start
with the banking industry--reining in those conflicted conglomerates,
like Citigroup and J.P. Morgan Chase, created with repeal of the New
Deal's wise separation of commercial and investment banking.
New Dealers got a lot of things right, but the second dimension of new
progressive thinking requires a recognition that returning to the New
Deal framework is essentially a retrograde option (and not only because
the country is a different place now). Liberals ought to ask why so many
New Deal reforms proved to be quite perishable or why some of its
greatest triumphs, like the law establishing the rights of working
people to organize, have been perverted into obstacles for the very
people supposedly protected. In short, this new era requires
self-scrutiny and the willingness to ask big, radical, seemingly
impossible questions about how to confront enduring social discontents
and economic injustice.
Who really owns the corporation (clearly it's not the shareholders), and
how might corporations be reorganized to reduce the social injuries? Is
the government itself implicated in fostering, through subsidy and
tax-code favoritism, the very corporate antisocial behavior its
regulations are supposed to prevent? Congress, aroused by scandal, is
considering penalizing those companies that moved to Caribbean tax
havens yet still enjoy US privileges and protection. That's a good
starting point for rethinking the nature of government's corporatized
indulgences (old habits first formed in the New Deal) and perhaps
turning them into leverage for public objectives. To explore this new
terrain, we need lots of earnest inquiry, noisy debate and re-education
by a reinvigorated labor movement, environmental and social reformers
and ordinary citizens who yearn for serious politics, significant
A third dimension for new thinking is the economic order itself. During
the past two decades, a profound inversion has occurred in the governing
values of US economic life and, in turn, captured politics and elite
discourse--the triumph of finance over the real economy. In the natural
order of capitalism, the financial system is supposed to serve the
economy of production--goods and services, jobs and incomes--but the
narrow values of Wall Street have become the master. The Federal Reserve
and other governing institutions are implicated, but so are the media
and other institutions of society.
The political system is, of course, not ready to consider any of these
or other big matters. One of the first chores is to bang on the
Democratic Party, which, despite some advances, has expressed its fealty
to corporate money by clearing the fast-track trade bill and bankers'
bankruptcy bill for passage. This amounts to selling out principle and
loyal constituencies before the election, instead of afterward. Of
course the politicians are hostile--what else is new?--but now it's the
left that can say, They just don't get it.
Reversing the nation's deformed priorities will be a hard struggle but
has renewed promise now that the stock market bubble and other New
Economy delusions have been demolished. People do not live and work in
order to buy stocks. People exist in complex webs of relationships with
family, work, community and many other rewarding adventures and
obligations. The larger purpose of the economic order, including Wall
Street, is to support the material conditions for human existence, not
to undermine and destabilize them. If that observation sounds quaint,
it's what most Americans, regardless of ideology, happen to believe. If
our progressive objectives are deeply aligned with what people truly
seek and need in their lives, the ideas will prevail.
"Creative accounting" is something we hate.
From now on your numbers will have to be straight.
No taking of options for stock you contrive
To dump when insiders can tell it will dive.
And loans? If you want one, then go to the bank.
These sweetheart loans stink! They're disgusting! They're rank!
This type of behavior we strictly forbid.
Just do as we say now, and not as we did.
"Tell me about the hash bars."
"OK, what do you want to know?"
"It's legal there, right?"
"It's legal, but it ain't 100 percent legal."
Thou hast taken usury and increase, and thou hast greedily gained of thy neighbor by extortion, and hast forgotten me, saith the Lord God.
Research support provided by the Investigative Fund of the Nation Institute.
In June, the New England Journal of Medicine, one of the most respected medical journals, made a startling announcement.
The Nation reported on Dr. Pendergraft's troubles in
"Abortion on Trial" by Hillary Frey and Miranda Kennedy, June 18, 2001.
These days, it's the media conglomerates who are drunk with power--demanding a larger share of the nation's airwaves and threatening to turn the World Wide Web into an electronic theme park--and
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