Where's the Progressive Agenda for the Great Recession?
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One major difference between the Great Depression and the Great Recession is the death of a visionary progressive movement. Yes, the Republicans and the media like to call liberal Democrats "Left," but that just means they are slightly more moderate than Attila the Hun.
Many in the 1930s believed that capitalism needed a major overhaul. From there it got vague and contentious. The Communist Party, of course, was in love with the Soviet Union, which seemed to be the workers' paradise on Earth, in part because it had avoided the worst of the Depression. American socialists and Lafollette progressives looked more to a mixed system where government would not eliminate private capitalism but instead would heavily control it, even to the point of setting up its own key enterprises.
In general, the consensus view was that capitalism had run amok. Wall Street and the failing banking system were under fire. Serious change was in the air and progressives provided the agenda: unionization, public enterprises like the Tennessee Valley Authority, social security, minimum wage and overtime laws, public housing, controls on banking, public employment projects like the Works Progress Administration and the Civilian Conservation Corps. In addition there were experiments in alleviating debilitating competition, controlling prices and overproduction, soil conservation and a host of others, many of which failed.
The reason we don't have bread lines now largely is due to programs that progressives jammed through the under the rubric of the New Deal.
But you would think our Great Recession might be severe enough to at least conjure up a coherent set of reforms. After all, 29 million are unemployed or underemployed and we have poured about $13 trillion in cash and asset guarantees into Wall Street. Only a few months ago, we were all aghast at the incredible casino that was Wall Street. We couldn't believe that billions poured into junk fantasy finance instruments that got AAA ratings. We were really going to do something about those astronomical compensation packages. Our outrage knew no bounds but had no focus, no organization. We were, and maybe still are deeply angered, but we do so in private.
The banks that were too big to fail have actually gotten bigger. No one is even talking about regulating specialty derivatives that were so instrumental in the crash. The consumer financial protection agency is getting watered down by bank lobbyists funded indirectly by our bailout. And to name just one overcompensated financier, Andrew J. Hall, an oil speculator working for CitiGroup, is about to make a mockery of wage constraints by walking off with a $100 million payday -- from a bank that we virtually own.
Still no progressive movement. Still no national agenda for reforms. Still no compelling vision for what needs to be changed. Still no collective action to build our sense of empowerment.
If we are ever to form a coherent reform effort, there are two fundamental changes that should guide us:
1. We must move money from the top of the income ladder to the middle and the bottom. This crisis was the result of near-sighted, selfish tax "reforms" that encouraged money to accumulate in the hands of the top fraction of one percent. Those folks literally ran out of real world investment opportunities that satisfied their demands for high returns, so they poured their excess capital into the fantasy finance casino. We have the worst income distribution since 1929 - no coincidence, I would argue. When money is more fairly distributed we will dry up much of the demand for fantasy finance.