[Corp. Watch] Osama bin Market: Economic fundamentalism soldiers on

[Corporation Watch]

The Unlikely Martyrdom of Free-Market Jihad

  "Wall Street is run for the benefit of Wall Street … In
  truth, there is no substitute for regulation … It is time
  to end the failed experiment with radical deregulation"
-- The American Conservative magazine, Oct. 2008

By P. Sainath

(CounterPunch, Dec. 1) -- When words like these appear in a bastion of  
United States conservative thought, you know something is up. More so  
when The American Conservative graces that article with this sentence  
about rescuing the U.S. economy: "Goldman Sachs alums aren't the men  
for the job."

	The piece by Eamonn Fingleton goes on to say why: "Both Treasury  
Secretary Henry Paulson and his key adviser Neel Kashkari, formerly  
held top jobs at Goldman Sachs, and it seems clear that their highly  
controversial and, to economic historians, bafflingly unorthodox  
bailout plan serves Wall Street's interests -- particularly those of  
their former employer -- far more than the American public's."

	That's a start, with the recognition that Wall Street and corporate  
interest (and even "leaving it to the market") can be very different  
from public interest.

	The first part of October, said the New York Times, "represents the  
most sweeping government moves into the nation's financial markets  
since the Great depression and perhaps ever, according to economists  
and finance experts."

	That month saw government after government sworn to 'free markets'  
and deregulation announce they were acquiring ownership stakes in  
banks, and declare they would prop up dying private institutions with  
billions in public funds, and guarantee bank debt.

	Whether in Britain, Germany, France, Italy, Spain or the United  
States, massive state intervention is the order of the day. Across the  
world, governments are in one way or the other in profoundly  
interventionist mode.

	How profound? Estimates by the United Nations and similar bodies  
suggest that with $60-80 billion a year additional spending, major  
issues in education, water, sanitation, or health could be well  
addressed worldwide.

	Governments have long pleaded that this money simply didn't exist.  
Yet, a handful of them discovered they could find over a trillion  
dollars to bail out mostly private corporations.

	In its amazing fervor for privatization, India's post-1991 elite  
never once admitted why quite a few Indian industries had been  
nationalized in the first place: Their private owners had run them  
into the ground -- with huge amounts of public money.

	As one top Indian official put it at the time, the sicker the  
industries get, the healthier the owners get. That's when successive  
Indian governments stepped in to save thousands of jobs.

	(Once nationalized, these looted, "sick" companies were quickly  
dubbed symbols of "public sector inefficiency.")

	Now it's happening across the world. In the United States, too, the  
public will pay the bill for the decades-long frenzy at the corporate  
feeding trough. But here, the bail-out can't be called  
nationalization, even though quite often that is what it is -- that  
would be "communistic."

	In some cases, companies are being bailed with amounts of public  
funds greater than their current market value. (The $25 billion bail- 
out the auto makers seek is worth even more than that of Citigroup —  
until recently the 800-pound gorilla of American finance.)

	The right wing slogan of "not with my tax dollars" now chokes its  
authors. Investors and shareholders were, on the one hand, sacred (or  
supposed to be) in corporate theology. In the larger economy, on the  
other, you had to cut any public spending you could.

	Now, when you're spending billions of public tax dollars on these  
behemoths -- shouldn't that make the public their owners, or at least  
their main shareholder? So far, there is not even a semblance of  
accountability to the public on the billions so far doled out to the  
oligarchs.

	Market fundamentalism is in bad shape. Attendance at its houses of  
worship has fallen. Its televangelists are subdued, their psalm book  
is lost and the singers have laryngitis. Market jihadis scour other  
subjects to crusade about.

	There's no official recanting of the editorials urging India's  
governing coalition to "push ahead with financial liberalization" now  
that "the cancer" [of over-valued bubble investments] was gone, but  
the mood is more subdued for sure.

	The Indian government itself takes credit for "insulating the  
economy" against the global meltdown -- in short, credit for not be  
able to liberalize" the economy more quickly. That this insulation  
arose from the restraint imposed on it by the Left and public opinion  
is hotly denied.

	In the U.S., words are now being bandied that were unheard in  
decades: 'Socialism for the rich' and 'Deficiencies of the Free  
Market.' This shift is more important than it seems.

	For three decades, markets were raised from a tool -- one amongst  
many -- to a tyranny. There was nothing 'The Market' could not solve.

	Thomas Frank summed up the mindset very sharply in his book, 'One  
Market Under God': "Markets enjoyed some mystic organic connection to  
the people, while governments were fundamentally illegitimate …  
[M]arkets expressed the popular will more articulately and  
meaningfully than did mere elections … [M]arkets are where we are most  
fully human; markets are where we show that we have a soul."

	The market was not merely inseparable from democracy. It *was*  
democracy.

	In India, as late as this June during the food-price crisis, there  
were ideologues who saw hunger as essentially a function of anti- 
market systems. (One editorial argued that if the markets were allowed  
to do their job, food would rush to the places where demand was  
highest.)

	What about health, education or agriculture? Just leave it all to The  
Market.

	Of course, the American Conservative magazine does not take an anti- 
market position. Nor does it plead for intervention as a rule, even in  
vital sectors. It singles out finance as unique, declaring that  
"Finance simply cannot be left to its own notoriously conflicted  
devices."

	It then calls for the regulation of that sector, quoting from market  
fundamentalist scripture to show that such exemptions were implicit in  
the words or silence of true prophets such as Milton Friedman. This is  
one of the more thoughtful journals of its spectrum.

	The market jihad has been martyred, but it is not dead. It has merely  
gone underground, or is catching its breath. The meltdown has  
devastated its storm troopers. The IMF soldiers on bravely, though,  
presenting an ideological about-face as business as usual.

	As Professor Jayati Ghosh points out, its prescriptions for rich  
countries in crisis contradict its fatwas for developing ones. When in  
financial crisis, the latter have to cut spending, reduce their  
deficits (and turn them into surpluses -- no matter how painful it is  
to their poor.)

	But rich countries,  says the IMF -- like the U.S. which brought on  
this crisis -- can provide 'financial stimulus' to their economies,  
and support economic activity, even if they run up large deficits. In  
short, they are exempt from the rules.

	But then we know which of these worlds the IMF represents. As Prof.  
Ghosh points out: "The tiny countries of Belgium, the Netherlands, and  
Luxembourg -- with a total population of less than 28 million -- have  
more votes in the IMF than China, Brazil, or India."

	But while on the meltdown, consider one sector that has not had the  
scrutiny it deserves. The media -- particularly financial journalism.  
Each night and day we still suffer the same "experts" who know exactly  
what went wrong, and precisely how to save your money (a bit hard if  
that money is already gone).

	Sure, there have been some fine stories on the stable after the  
horses have bolted. Not a word of introspection. How could this  
expensive edifice of financial journalism fail its audiences across  
the world at every critical stage?

	Remember Enron? Or a dozen other episodes where their 'expertise'  
ought to have kicked in and saved millions from being cheated of  
billions? Far more alarms have been rung by government officials and  
regulators than by a completely corporate-captive media.

	But they are never called to account. Not even those who dismissed  
talk of a housing bubble only months ago. Or who just a month before  
the meltdown assured the world that no 1980s-type crisis was to be  
expected.

	Market jihad may have lost its best shock troops, but its propaganda  
pundits are still around.

---------------

P. Sainath is the rural affairs editor of The Hindu daily newspaper in  
India, where this piece first appeared, and is the author of  
'Everybody Loves a Good Drought'.