It is rare that this magazine has occasion to cite approvingly the words of a reactionary Republican like Jim Bunning of Kentucky. But when faced with the audacious attempt by the Bush administration to bail out its Wall Street allies with $700 billion in the citizens’ money, Senator Bunning was succinct and correct: “The free market for all intents and purposes is dead in America.” To which we would only add: this realization couldn’t come soon enough.
The administration’s proposal to buy up Wall Street’s garbage didn’t so much kill the free market as make clear that it is largely a convenient fiction. While conservatives have invoked market fundamentalist dogma in defense of their thirty-five-year class war against working Americans, the fact is they’ve turned to the state for bailouts, contracts and special favors at nearly every turn. The result is less a night watchman state than a cat burglar one. At least now the mechanics of the heist have been laid bare. With ardent free marketeers like former Goldman Sachs CEO Henry Paulson publicly throwing in the towel, we preserve hope that this crisis will finally retire the neoliberal era.
The unlikely and unpredictable cross-ideological alliances that have formed in response to the bailout show that the central philosophical debate is shifting: it is no longer about the size of government, for there will be more government in the years to come. The question is, What kind of government intervention will we have, and, most important, Whom will it benefit? Will the final contours of this bailout bring us “Goldman Sachs socialism,” as William Greider calls it on page 5, or more democratic financial governance? With so many facets to the crisis and the debate on Capitol Hill in flux as we go to press, a comprehensive view is impossible. Instead we asked a range of observers for their views about what this crisis means and how we ought to confront it. As journalists, writers and thinkers, we welcome this new debate. As political actors and citizens, we embrace this new battle. —The Editors