Bailouts and the role of radicals

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by Jeff Nygaard, September 8, 2009 • There are so many reasons for hope at the moment that I haven’t been sure how many to include in this “Hope Series” that began in the last edition of the Notes. This week I talk about bailouts, and about the opportunities presented by crisis. But I could just as well talk about the various efforts to do collaborative visioning toward a better future that are currently underway. I could talk about the newly-formed group of wealthy people who are almost begging to be allowed to pay more in taxes in order “to help rebalance our economic system.” What’s up with that?! I could talk more about the myriad of developments in Latin America that the Times of London refers to as “a ‘pink tide’ that has many in Washington rattled.”


I could point to any number of other things that also give me hope. It’s not hard to find such things. As the late Utah Phillips said in a 2004 interview, “there’s too many good people doing too many good things for me to let myself be pessimistic.” I couldn’t agree more, but I think I’ll stop this brief series on Hope with this issue, as there are too many other things that seem to demand attention.





Nygaard Notes is concerned with a broad range of issues and ideas, using humor and plain language to reach out to anyone who believes in the values of solidarity, justice, compassion, and democracy.

One reader wrote to me after reading the last issue of the Notes, saying “What a delight to read a statement of reasonable hopefulness.” I don’t know how reasonable it is, but it matters not to me. Here’s hoping that these few stories—reasonable or not!—are helpful to those of you who feel betrayed by Obama, to those of you who are wondering why Dick Cheney won’t go away, and to those of you who have absorbed too much of the bleak outlook on the world that comes into our homes as a part of the daily news flow. Let’s let that stuff go. The work continues, progress is being made, and hope springs eternal.


So long until issue #439,


Nygaard


“Quote” of the Week:


This week’s “Quote” is from the outstanding monthly newsletter “The Anti-Empire Report,” by William Blum. The most recent issue talked about recent developments in the case of the 1988 bombing of Pan-Am flight 103 over Lockerbie, Scotland, in which 270 people were killed. Here are some excerpts from Blum’s article:


“Abdel Basset Ali al-Megrahi, the only person ever convicted for the December 21, 1988 bombing, was released from his Scottish imprisonment August 21 supposedly because of his terminal cancer and sent home to Libya, where he received a hero’s welcome… President Obama said that the jubilant welcome Megrahi received was ‘highly objectionable’. His White House spokesman Robert Gibbs added that the welcoming scenes in Libya were ‘outrageous and disgusting’.


“American officials, British officials, and Scottish officials know that Megrahi is innocent. They know that Iran financed the PFLP-GC, a Palestinian group, to carry out the bombing with the cooperation of Syria, in retaliation for the American naval ship, the Vincennes, shooting down an Iranian passenger plane in July of the same year, which took the lives of more people than did the 103 bombing…”


“[O]fficials have known of Megrahi’s innocence since 1989… The Scottish Criminal Cases Review Commission, which investigated Megrahi’s trial, knows it. They stated in 2007 that they had uncovered six separate grounds for believing the conviction may have been a miscarriage of justice, clearing the way for him to file a new appeal of his case… In order to be returned to Libya, Megrahi had to cancel his appeal. It was the appeal, not his health, that concerned the Brits and the Americans.”


“If the three governments involved [US, UK, Scotland] really believed that Megrahi was guilty of murdering 270 of their people, it’s highly unlikely that they would have released their grip on him…”


I can’t recommend The Anti-Empire Report highly enough. And, if you haven’t read any of Blum’s books—”Rogue State: A Guide to the World’s Only Superpower,” “Killing Hope: U.S. Military and CIA Interventions Since World War II,” and “Freeing the World to Death: Essays on the American Empire,” among others—you’re missing out. Find the report here. Subscription information is at the bottom of the page.


Hope in a Time of Economic Crisis: The Bailouts


How many trillion public dollars have been doled out to fabulously-wealthy corporations and individuals in the past year? I’m not going to do the research needed to get the precise numbers, but the amounts are staggering. So, where’s the hope in this? The hope lies in the opening up of space for discussing the nature of “the system”—in this case, the capitalist economic system—and for proposing other, more people-friendly approaches to the crisis.


Last week I talked about the worldwide decline of the U.S. Empire that is already well underway. It’s a little harder to find, but cracks can be seen when the U.S. Empire is looked at from the inside, as well.


People’s Bailout


In my own state of Minnesota has been born the “Minnesota Coalition for a People’s Bailout.” They have organized an occupation of the home of a south Minneapolis woman to prevent her home from being foreclosed. They have been behind the introduction last spring in the Minnesota Legislature of S.F. No. 542 – the “People’s Bailout Bill.” The bill “would extend and expand eligibility for unemployment benefits, create a new public works program to put people to work, and place a moratorium on the five-year lifetime limit for public assistance. The act would prevent layoffs of public sector workers, including workers at the University of Minnesota.” There’s not been much success in terms of getting the bill to the floor of the state Senate, but the simple fact that something like this—a bill called “People’s” anything—was introduced in the first place is a hopeful sign. The original bill had five co-sponsors.


(I don’t know what’s going on in states other than my own state of Minnesota, but my research on similar initiatives in other states didn’t yield much. That doesn’t mean that there isn’t a lot of stuff going on, just that I couldn’t find it. Readers, let me know if you have things percolating in your own states.)


An organization that has worked with the Minnesota Coalition is the Poor Peoples Economic Human Rights Campaign. PPEHRC is inspiring for many reasons, but for me the most inspiring thing is that they are so bold as to proclaim it their mission to “abolish poverty,” using the framework of the Universal Declaration of Human Rights to shape their analysis. It is also inspiring to see the number and variety of its member organizations. During this economic crisis USAmericans have actually heard discussions in the corporate press about the nature of capitalism. Very unusual. Very hopeful.


A New Way Forward


A national group that is working to “restructure the financial system” is a group called A New Way Forward. Started in March 2009, their website is full of great stuff like a petition to sign, a “Guide to Organizing Events,” and what looks to be a great video on “The Economic Crisis 2009” (which, if I had a newer computer, I would have watched all the way through).


ANWF has a strong emphasis on education, and they make available all sorts of materials for getting started, whether it’s organizing a forum, starting a book club, or lobbying Congress. The website is a little clunky, but well worth exploring. The video is hard to find, so go to this page and scroll down until you see “Economic Crisis 2009 video.”


The spirit of the group is captured, I think, in this comment: “We need to talk about why after so many years of hearing there was no money for health care, schools, new transit, you name it, just like that, overnight trillions were found for the banks and Wall Street.”


Besides the growth in populist energy indicated by the above examples, there are even some hopeful signs from the U.S. Congress. For example, although one doesn’t hear much about it, there is such a thing as the Congressional Progressive Caucus. With almost 100 members (2 Senators, 90 or so House members), the CPC stakes out positions on a range of issues, from immigration to education to Iraq to Iran to trade and more. The ongoing and surreal health care “reform” debate has recently included the voices of CPC members, and they deserve support for standing up for something, even if that something sometimes sounds pretty weak compared to what is needed.


In the U.S. context, where a President who is a moderate Democrat can be absurdly denounced as “socialist,” some of the CPC’s policy positions can seem almost “radical.” The air of crisis caused by the ongoing economic meltdown allows some of their positions to see the light of day. Although I certainly don’t agree with every CPC position, it might be worthwhile to have a look at their 2010 Progressive Budget. It includes major cuts in military spending, a transaction tax (see next article for more on this), Green Jobs funding, increased investments in infrastructure, and all sorts of other spending priorities that are hardly “socialist,” but that would start to move the federal budget in a good direction.


Check out the CPC here.


“Is Capitalism Fatally Flawed?” Streets, Suites, and Room to Maneuver


A headline in the June 10th Christian Science Monitor read, “Is Capitalism Fatally Flawed?” The very fact that such a question can be seen in a major newspaper—and in the headline, no less!—is a testimony to the power of a crisis to open up new avenues for conversation.


A great current example is a comment made a couple of weeks ago by the chairman of the Financial Services Authority, the agency that regulates the financial services industry in the United Kingdom. This is a powerful man, operating within the system at a high level, and the comment that he made which I found amazing was his call for a global tax on financial transactions. (It’s sometimes called a “Tobin Tax,” after a guy who used to talk about it in the 1970s.) Tobin Taxes are simple sales taxes on currency trades across borders. It is possible to apply similar taxes to any financial transactions, not just international ones.


A transaction tax would do a couple of good things. 1) It would slow down the preposterous speed and volume of cross-border currency trading, which is a part of why the global economy is so unstable, and 2) It would raise a lot of revenue—it’s a tax, y’see—that could be used for something more socially useful than lining the pockets of these insane traders who make obscene amounts of money by selling and buying money.


As I said, this idea of taxing currency speculation isn’t a new one, and it didn’t even start with Tobin. I think John Maynard Keynes mentioned it seventy years ago and, more recently, the late Senator Paul Wellstone introduced a bill in the U.S. Senate (back in the year 2000) that would have enacted a transaction tax “to deter excessive speculation.” But, despite the idea’s having been around for a while, the London Guardian reminds us that “The radicalism of the Tobin tax is one reason why it’s never got off the ground.”


It’s not that radical, really. A report by Dean Baker at the Center for Economic and Policy Research last December pointed out that “While there are undoubtedly distortions associated with financial transactions taxes (it will have some impact on the cost of capital), much of the economic activity that will be lost as a result of the tax has the character of gambling. It will have very little effect on the effectiveness of capital markets.”


Nonetheless, the bankers hate it (London Guardian: “The banking sector reacted today with anger and bewilderment to comments from Lord Turner…”), so it has been treated as a “radical” idea.


And that’s my point, and my reason for optimism here. When activists are out in the streets calling for structural change, as they are now, one of the side-effects is the expansion of the space within mainstream political circles for new ideas, even ones previously considered “radical,” or not considered at all. So people like the top financial regulator in the UK can come out and call for a “radical” tax on the speculators whose work is “socially useless” (that’s Turner’s phrase!) and the idea actually gets listened to by folks who might be able to pull it off.


Turner is no radical, and his idea is not a radical one. But, in times of economic crisis, we are allowed to hear the voices of the real radicals who are saying that the Emperor has no clothes. That is, that capitalism actually is “fatally flawed.” Radicals say this all the time, of course, but their words and arguments are usually not reported to the general public. It takes an economic crisis to get some of those words reported, which then broadens the range of acceptable thinking for everyone. When the boundaries of acceptable thought are different, our public discussion is different. The current moment may yield us some new rules and regulations. Maybe even a transactions tax. But realistically, in the short term the best we can expect is for things get a little bit better. But we should also notice that, at times like this, the ground is being prepared for some new things to be planted. Things that might—just might—grow into a future society in which more of our transactions are socially useful, so we don’t have to or want to tax them.


See Baker’s seven-page paper on transactions taxes here: http://www.cepr.net/documents/publications/financial-transactions-tax-2008-12.pdf


The International Innovative Revenue Project has a “Tobin Tax Initiative” (another hopeful development!) and you can learn about it here.