Maybe we're all overblowing this, but it's hard to escape the sense that we are all sitting on the fault line, shaken by the perhaps the largest economic discontinuity in history. It may not be the most catastrophic--I think there's reason to believe our economic and civil institutions are more robust than in 1929--but certainly the largest. And it won't just be an economic discontinuity. I believe it may very well mark a major political realignment.
There is now pretty good polling data to demonstrate that, at least for the time being, Americans are overwhelmingly laying the blame for the banking meltdown at the feet of the GOP. And by GOP, read "market conservatives." And that blame is well-laid, I think, because, of course, "market conservatives" have been anything but since the sainted Ronald Reagan. Reagan began an era of aggressive deregulation, delirious deficit spending and regressive taxation that reached a vicious and insane crescendo during the Bush presidency. Progressives, like myself, have been waiting for almost thirty years for the other shoe to drop.
Given the poll numbers I linked to above, not to mention Barack Obama's current command of the electoral college, it looks like Democrats will have to clean up the mess, as they did under FDR. No candidate entering October with a lead in the polls has lost since 1960, with the exception of Carter, who was arguably an outlier because of a fresh military fiasco in Iran and a post Oct-1 debate. And so the economic discontinuity triggers a political discontinuity, as it must.
But I wouldn't look to a return of FDR. What we see will be something...different. Oh, sure, on the surface, it will have some similarities to the New Deal. I, for one, don't believe that Obama, a man who must be acutely aware of his place in history, will allow a gazillion-dollar tab for the bailout to clip his wings. I think he'll double down, and invest in technology, infrastructure, education and health care to a degree that will make techno-progressives swoon and paleoconservatives pop aneurysms like a child pops bubble-wrap.
But there'll be more to it than that. There'll be a new regime of regulation and government involvement in the economy--government investment in the economy. I just don't see how Congress, short of a full-scale and catastrophic Republican mutiny, can seal this breach without buying up huge amounts of equity in banks and mortgages. The government is going to be a shareholder--which means we'll all be shareholders. "The last nail in Ronald Reagan's coffin," as some GOP congressman put it. Aye, and good riddance, I say.
What kind of New New Deal will Obama and a Democratic Congress shape from this catastrophe? I don't know, because they don't know, and there'll be more than a little of Making It Up As They Go Along involved.
The biggest implication for what we're living through right now may be this: the greatest economic discontinuity in human history is taking place contemporaneously with the biggest ecological discontinuity--global climate change, loss of habitat, and a global mass extinction event. Will the shape of what emerges from the meltdown and the new ascendancy of progressivism (if, in fact, it materializes) be for the good or ill of our species and world?
Who the fuck knows? Fasten your seatbelts, because right now we're flying dead stick.