End of an Error-The twilight of conservative rule

[babylonsister]

End of an Error by Jonathan Chait
The twilight of conservative rule.
Post Date Wednesday, October 22, 2008


Last year, I published a book describing how right-wing economics had come to dominate American politics. Whenever you write a book about something bad that's happening, you get asked for the solution. I'd shrug and admit that I didn't have one. The questioner would usually look slightly disappointed, so I'd add that nothing lasts forever, and eventually something will come along to change things. The financial crisis might be that something.

When liberals talk about turning economic lemons into political lemonade, the usual model is the New Deal. The free market failed, government swept in, and the political landscape was transformed. Of course, the economy has recessions all the time, and most of them fail to result in a New Deal. In 1982 and 1992, to name a couple of examples, lousy economic conditions led to major Democratic victories. But neither led to any major transformation, and each was followed, in 1984 and 1994, by blowout Republican wins.

Why did the Great Depression fundamentally change the nature of government? First, obviously (to quote Rodney Dangerfield in Back to School, when he was asked to characterize The Great Gatsby), it was, uh, great. The current downturn probably won't last anywhere near as long as the Depression. On the other hand, economic analysts are throwing around terms like "calamity" or "total meltdown" with a distressing frequency that we haven't seen in previous recessions.

Second, the Depression--as my colleague John B. Judis put it in The Paradox of American Democracy--"destroyed in one stroke the edifice of wisdom and invincibility that businessmen had erected for themselves." After the stock market crash of 1929, Americans saw rampant speculation and greed as the source of their ills. That kind of reaction generally hasn't happened since. The 2001 recession occurred because the tech bubble burst and terrorists struck; the 1991 and 1982 recessions were caused by the Federal Reserve; etc.

Today, the public is reverberating with revulsion for Wall Street, a sentiment powerful enough to have caught backers of the financial bailout by surprise the first time it came to a vote in the House. The polling firm Greenberg Quinlan Rosner annually surveys the public for its sentiments toward "big corporations." Over the previous five years, unfavorable ratings have outscored favorable ones by an average of eleven percentage points. In the current survey, unfavorable ratings scored 25 points higher. And this is before the financial crisis has even had much impact on most people.

more...

http://www.tnr.com/politics/story.html?id=ee519051-33b9-4f93-98f9-05c0e33ab41e