Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here’s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.


 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate

Subscribe!
Subscribe





On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.
___________

Syndicate
RSS/XML


RSS 2.0

Hello to the new interventionism

By Richard Hil and Lester Thompson - posted Tuesday, 9 December 2008


We live in tumultuous times. The multiple crises that afflict the globe - climate change, financial meltdown, food and water shortages, terrorism and so forth - have become consuming anxieties in many countries.

In the rich west the current financial crisis has become a tortured existential moratorium on the volatile and ethically troubled capitalist system, and the likely effects of demand contraction, rising unemployment and declining economic growth. There is talk in some quarters of a “post neo-liberal” era marked by a return to greater government (neo-Keynsian) intervention in the affairs of the nation.

Others are looking to alternative systems of economic and political engagement based on principles of social justice and human rights. Others still are looking to localism, sovereignty, self determination and community empowerment as ways of countering the ravages of rapacious capitalism.

Advertisement

The collapse of the international financial markets, triggered by the implosion of the US subprime market, has demonstrated with startling clarity how interconnected the global system has become and how easily unregulated financial capital can lead to catastrophe.

If Naomi Klein is right about the machinations of “disaster capitalism”, then the current crisis has the potential to also be the harbinger of repressive policies aimed at shoring up the power of corporate elites while putting a repressive lid on civil dissent. We might also remember Naomi Wolf’s stark warnings about the potential slide into fascism (“fascism drift”) under such circumstances and the likelihood that the current crisis, accompanied by economic downturn and social instability, may usher in further erosions of civil liberties.

The US has already lost a million jobs this year, retail demand has all but collapsed, and the backbone of US manufacturing industry - the fabled car industry - is facing bankruptcy caused by managerial ineptitude and stratospheric overheads. Similar scenarios of actual and immanent despair are occluding in other western countries. Faced with all this, governments have already put climate change on the backburner and many social programs are under threat. At the very least, we can expect to see radical reconfigurations in government policies and spending programs across the globe.

Meanwhile, the blame game is in full swing. Fingers have been pointed, mea culpas announced, and defences and justifications mounted. But rather than rallying to the assistance of beleaguered mortgagees in the US and beyond, the US mandarins have decided to hand over the remainder of its bailout package to the very financial institutions that contributed to the current crisis. This has bemused and horrified millions of “ordinary American people” who look to government for protection from the vagaries of the so-called “free market”, the dubious virtues of which were extolled by George W. Bush at the recent APEC summit in Lima, Peru.

Of all the tortured public (“we screwed up”) confessions that have thus far emerged, none is more evocative than that of the former chairman of the United States Federal Reserve Board, Alan Greenspan. In his anguished submission to the Congressional Committee of Government Oversight and Reform on October 23, 2008, Greenspan observed:

We are in the midst of a once-in-a century credit tsunami. Central banks and governments are being required to take unprecedented measures.

Advertisement

The former financial maestro claimed he saw the crisis coming but not its current scale:

In 2005, I raised concerns that the protracted period of under pricing of risk, if history was any guide, would have dire consequences. This crisis, however, has turned out to be much broader than anything I could have imagined. It has morphed from one gripped by liquidity restraints to one in which fears of insolvency are now paramount.

In downplaying the human aspect of the crisis, its architects must search for technical explanations. Thus, Greenspan muses that:

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. All


Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

6 posts so far.

Share this:
reddit this reddit thisbookmark with del.icio.us Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Authors

Richard Hil is Senior Lecturer in the School of Arts and Social Sciences at Southern Cross University, NSW.

Lester Thompson is a Senior Lecturer in Social Welfare at Southern Cross University, Gold Coast.

Other articles by these Authors

All articles by Richard Hil
All articles by Lester Thompson

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment 6 comments
Print Printable version
Subscribe Subscribe
Email Email a friend
Deals from Sponsor
Flipit.com Australia
Use this coupon code for The Iconic to get 20% off sitewide when you spend $79 or more
Vision Direct coupon code: Get 20% discount when you add lenses to frames
ValueBasket discount code: Get $8 off any order of $330 or more
Amaysim coupon code: Get your first month for half price when you buy online
Alibi coupon code: Get 10% off sitewide and get free shipping
Advertisement

About Us Search Discuss Feedback Legals Privacy