Economic Armageddon...

Economic Collapse?

by Rabbi Michael Lerner
September 19, 2008


The fear is palpable. Those of us in the non-profit sector feel it deeply already, because with the predictions of collapse surrounding us, many magazines are reporting drops in subscribers, and many change-oriented organizations are suffering from a drop in membership or donations. And it's likely to get worse. There are predictions that even with the hundreds of billions likely to be spent to ameliorate some aspects of what we face, there might be as many as five million people who will be losing their homes in the mortgage crisis, and millions more losing their jobs as small businesses collapse. And if the price of oil remains high, and the storm in Texas last weekend has already sent prices soaring again, there will be tremendous suffering next Winter when many people can't afford home heating oil.

Unfortunately, none of the major political candidates has been willing to speak honestly about why all this is happening, if they even know.

But there's a simple and accurate answer: materialism and greed which has become a run-away epidemic in the contemporary capitalist world in general, and in the U.S. in particular, is the root of the problem. The oil crisis may be partly rooted in the desire of China and India to live a standard of material well-being comparable to that in the West, but it's mostly rooted in the speculative trading of oil futures that has artificially jacked up prices wildly. The collapse of the mortgage and banking industries has largely been a product of speculative investments as banks and mortgage companies sought to make super profits on their mortgage loans by turning them into monetary forms that could be traded and against which others could borrow money. It is this speculation, not solely the absence of the commodities, that has been a major source of the problem.

For decades we've watched passively as poor people and people of color have lost jobs, and faced a weakened net of social protection in the U.S. as the conservatives seemed to convince the American majority that the marketplace was fair, and that hence people who were not doing well had no one to blame but themselves. It was wrong to over-tax rich people, we were told, because they had taken the risk of investing in projects that could fail, so the public had no claim on their huge profits when they succeeded. The bailouts that the marketplace have required in the past, and now once again with the bailout of Fanny Mae and Freddie Mac, demonstrate the emptiness of this argument.

The reality? When poor people fail to flourish economically, the government shrugs its shoulders and gives a pittance of relief. But when super-giant firms fail, and the wealthy are endangered, the government, with the votes of many erstwhile conservatives, jumps to the rescue. The exception of Lehman Brothers may have something to do with the fact that the Bush Administration, so willing to spend hundreds of billions of dollars to save their friends, has little concern for an investment firm that was always perceived as "Jewish" and "liberal."

When it's their friends, they intervene to save the capitalist enterprises on the backs of the taxes paid by ordinary working people today, or our children tomorrow. It reminds me of an old saying: "When is it a "recession?" When YOU lose your job. When is it a "depression?" When I lose MY job!" Too many of the people who are suffering today were all too willing to allow others to suffer when it was "just" in a community of "people of color" or people with a "lower class status." Now, they are upset when it is they who the larger society is abandoning.

What can be done? Well, although there are many short run solutions, the real answer is this: when a private firm or enterprise fails, and it's socially valuable to keep that firm alive, then the U.S. government should take it over and nationalize it. That's what should happen to Fanny Mae and Freddy Mac and to the investment firms and banks that have needed our tax monies to bail them out. Or, let the firms remain in private hands, but let the tax payers automatically get the percentage of annual after-tax profits that our bailout tax dollars are compared to the total worth of the institution at that moment when it needs a bailout. And bailout individuals at the same time as we bailout banks and energy corporations. And if we need to use oil and gas from our own country, then the corporations that mine that gas and oil should not be allowed to make a profit off our natural resources except if all of those profits are 100% used to support public investment in alternative energy supplies.

So why isn't this at the center of the campaign? Why haven't Democrats passed laws to prohibit this speculation or to demand sharing the super profits of the oil and gas companies with he ordinary citizen? The answer is that all our thinking is constrained by the fear that if we talk about returning profits to our government or allowing government to set a "fair price" that we will be creating a socialist system. Well, I know that socialism "won't sell" in the US.. so instead lets call this people-oriented economics shmo-cialism or even fairness-ism. But be sure of this: if the speculators were in jail instead of running the economy, if super-rich people and institutions were fairly taxed instead of making out like bandits while so many of our fellow citizens suffer, we'd be in far less vulnerable position.

We are told that our fellow citizens would never support even shmo-cialism, because they imagine that someday that they will be rich themselves (do disabuse them of the fantasy) and that they can't feel empathy for others who are suffering. But this is not true. The truth is not that they don't feel identification with others, but that that part of themselves, their most generous and caring part, has been put down and made to feel "abnormal" so frequently throughout their lives that they don't feel ready to trust their own desires and think that they would just be making a fool of themselves to imagine a world in which people really took care of each other.

Here we get to the fundamental contradiction of antagonism to "big government." The whole point of having a democratic government originally was to create an institution to provide the kind of hands-on-caring that we couldn't do if we want to keep working and making a living. ˝Government" then, is the institution that should be the manifestation of our caring for each other. Instead, it has been largely shaped by the interests of the wealthy and the powerful, who use government to protect their own interests and honestly believe that their own interests are the public good. And as more and more people begin to see government failing to give a real priority to being an instrument of mutual caring, they get more and more incensed at having to pay taxes for this king of reality. Unable to imagine any other reality as "realistic," many people decide that their only refuge is to resist taxation and support candidates who promise to lower their taxes. The resentment of government that the Right plays upon is based in a correct assessment that too often it fails to serve the needs of ordinary people but only the needs of the insiders and their friends.

Yet the underlying desire to be a caring person doesn't go away. Frustrated by the lack of any obvious way to be caring in the public sphere, millions of Americans flock to churches, synagogues, mosques, ashrams and civic institutions where they get an opportunity to actually act on their caring for each other. But these institutions lack the finances to make up for what government fails to do: protect the common good by taxing the super-profiteers like the oil/gas and military-industrial complex and criminalizing the behavior of the speculators that have ruined the mortgage market.

Until these dynamics are presented to the American people, the special interests (no, not workers organizing into unions to try to defend themselves from losing their jobs but the super-rich corporations and their corporate dominated mass media) will predominate and most people will feel powerless to do much. But the way to present this is by emphasizing the positive: that so many Americans really do care about each other, and that they are stunned when they watch the profiteers undeterred as they lead the society into economic crisis. But that stunning can eventually lead to cynicism and despair, psychological depression, and even to an openness to fascistic solutions if they are not presented with the vision of a really compehensive progressive vision.

That's one reason why we should be asking our elected officials, at least the ones we trust, to make this kind of analysis more central in the way that they discuss what is happening and what needs to be done, rather than keeping that discussion in vague and technocratic terms that avoid the central ethical issues that are always at the heart of the economy. If Obama, for instance, were talking this way, actually confronting the power elites of this country, he would face a huge assault by the corporate-dominated media. Yet he would also reach many people who don't believe he really cares about them. Surrounded by the cautious insiders of the Democratic Party, Obama is unlikely to talk as forthrightly as is necessary to help people understand what is really going on. And without that, they will fester in their fear and their anger.

It is precisely in these moments that people turn toward fascistic forces that promise order and discipline and control over what seems to be out of control. If they cannot hear a reasonable and common-sense analysis of what is happening to them from the Left, they will turn toward the fantasies of the Right -- a return to less complex realities of small town America, hoping against hope for a return to the "good old days" when (in their fantasy, but not in reality) things were simpler and more straightforward and you could take care of yourself, shoot a moose or deer or buffalo for dinner, and rely on neighbors' generosity when you needed help. But don't blame this on the stupidity of the American people. They are looking for clear answers and solutions, and so far what they hear from the Democrats is confusion and an unwillingness to really confront the real sources of the problem in any straightforward way. They don't want policy wonks--they want someone to name the reality and give an ethically and spiritually coherent vision of what to do about it. Unless they hear that, they will look for others who have some willingness to present a coherent (though in our view, deeply distorted) set of solutions (though in the not-too-long-run they will prove to be non-solutions as the economic crisis deepens and shapes everyone's life--but the Republicans only need to get the economy to survive through November, because if they win power again, liberal people will feel so despairing and de-energized that the Republicans will only face the kind of opposition to their economic policies from the Congress that they faced in opposition to their war, which is to say, Nancy-Pelosi-style-capitulation and collaboration).

Once again, the responsibility is on ordinary citizens to stand up and talk back to the politicians in both parties, and to do so in a way that demands a new set of values to run our economy, so that materialism and selfishness is put on the defensive and caring for each other becomes the central motif. It is only when some serious political leaders are willing to make that the center of their campaign, to demand that love, generosity and caring for others is the shaping force determining their policies, that the American people will be able to take that part of their consciousness that wants such a world but believes it impossible, and finally transcend their fears and act on their highest desires rather than sinking into the other fearful part of their consciousness that leads them to seek magical solutions in repression and denial of much of what they know about the failures of the economy and of our foreign policy.

Rabbi Michael Lerner is editor of Tikkun Magazine and chair of the Network of Spiritual Progressives. RabbiLerner@Tikkun.org