Bankruptcy of an ideology

THEY DON'T know what they're doing. The U.S. Treasury Department admitted last weekend that the $700 billion it says it needs to bail out the banksters is "not based on any particular data point." In other words, they sucked the figure out of their thumbs.

This is not to be wondered at. For a generation, the financial consultants, policymakers and experts of one sort or another who nightly paraded across our television screens intoned a mantra celebrating the majesty of the free market.

State intervention was the devil's own work. Government spending must be reined in, the public sector cut down to size, while thrusting, dynamic, risk-taking capitalists needed to be freed from all restriction, so they might create wealth which, so they assured us, would, at some undefined point in the future, trickle down to the lower orders.

Instead, the wealth, so to speak, of the people at the bottom is set to trickle up.

Where are they now? Where are the university economists and business correspondents whose ideas and assumptions have been exposed as balls of toxic smoke? Why aren't they on the news now, apologizing, clad in suits of sackcloth, foreheads daubed with penitential ash?

Being a bourgeois commentator means never having to say sorry.

It was in the United States that the glories of the free market were most fervently embraced, to the extent that freedom for the market was taken as synonymous with freedom itself. Instituting a free market in Iraq was explicitly identified by Donald Rumsfeld as a key aim of the 2003 invasion.

There's another thing we haven't heard much about in the course of the bankster shenanigans: Iraq.

Testifying to Congress in June, William Beach of the Heritage Foundation--its mission: "to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom (and) traditional American values"--reckoned that the Iraq war had cost U.S. taxpayers $646 billion so far, plus an already allocated $68.6 billion for next year--more than the Bush administration's estimate of the total cost of the Wall Street welfare fund.

As for arms spending generally, right in the middle of the screech and panic of the $700 billion bailout debate, the House of Representatives passed a $612 billion military budget for 2009. The New York Times reported the story in three paragraphs.

Like the capitalist system it is designed to protect, military spending is deemed beyond argument. Heard anyone suggest withdrawal from Iraq might free up a few billion to alleviate the crisis?

WHY SHOULD they worry? Their point is to ensure that the rich continue to get the gravy, while the poor are fed the gruel.

And not just in the U.S. New Labour has pledged to come up with as much of our money as it takes to save the British banking system. There's consistency here. In March, Business Minister John Hutton told a nosh-up for nobs in the city of London, "Any progressive party worth its name must enthusiastically advocate empowering people to climb without limits, free from any barrier holding them back."

"Huge salaries" were to be welcomed. Referring directly to City traders, he declared that "aspiration and ambition are natural human emotions."

There's no need to dig or delve to uncover the ideology which has led into the present predicament. It's in the core ideas of New Labour, as of the bipartisan consensus in the U.S. The ruling class on both sides of the Atlantic has rushed to the rescue of the rich because, well, that's what they do. The difference now is that the working of their system has been exposed to public view.

It's odd hearing the system named on the news. Just a while back, to utter the word "capitalism" in public discourse was to be identified as a quaint eccentric. The unspoken assumption was that we didn't live under any particular system of economic organization. This was just the way things were.

Natural, inevitable, eternal, unchallengeable, as necessary and unnoticed as the air we breathe.

Now, they are all singing in harmony from an entirely different song sheet. We need restraint on the market, curbs on excess. The bellowing yuppies in the wine bars have become a distasteful embarrassment. Sure, there have been excesses. But Bear Stearns, AIG, HBOS, Bradford and Bingley, Morgan Stanley, Lehman Brothers, etc., etc. These are not fringe players, but pillars of the global financial establishment, and they have all gone wallop from greed.

Now the rest of us are being asked to pick up the tab.

This is no time for the plain people to show the restraint which capitalism felt airily free to dispense with when the going was good. The next time a politician, economist or manager tells us to hold back on wage demands, or dares talk of cutbacks, flexibility, downsizing or redundancies "for the good of the country," they should be splattered with scorn.

First published in the Belfast Telegraph.