People are asking me where we are now – how the hell do I know? I’ve heard from several people who really are losing their retirement savings. It’s terrible, and their lives are going to change very dramatically. But our perception should be this is a rare opening.

The old order is crumbling. Politics right now is the fight of the old order, represented not just by Wall Street but other interests, to cling to their diminishing power. And up to now, they have been assisted and supported in that by both political parties and most ‘responsibles’, so called. But that, too, is changing rapidly.

So you have to now put aside the reflexive despair that people on the left usually experience, even about the election outcome and our new president, and look at it as a dynamic process that we can influence. It breaks all ideological and practical political barriers, and is a serious crisis for the nation and also the world, but is also liberating.

This is the moment when we talk about the society we want to help create, in the most ambitious terms. And I’m not being a pie-eyed optimist, I understand all the reasons why that may well fail, but this is a moment of history people rarely, rarely get, and we should try to make the most of it.

William Greider is the national affairs correspondent at The Nation and author of Secrets of the Temple, a history of the Federal Reserve

Frances Fox Piven

Like Bill, I think that there are a lot of unknowns. We aren’t quite clear about whether the government bailouts simply mean more redistribution of American wealth upward and more scapegoating of the poor for the crisis along the way – as, for example, mortgage lending to poor people is blamed for the collapse in the markets.

But I want to talk rather about the long-standing belief on the left that economic crisis, although it causes terrible things to happen, also generates new political possibilities.

Whenever we say that, we’re really thinking about the Great Depression, because it generated a lot of economic insecurity and real hardship, but that was combined with virtually a total discrediting of the economic ruling class. When the economy failed, we finally got a candidate, FDR [Franklin D Roosevelt], who railed against the economic royalists in his speeches, and then we got a Congress that hauled these people before Congressional committees and machine-gunned them with questions, and this had a huge impact on the political culture of the country.

For a big moment, maybe 10, 20 years, people were not in the grip of the ideas of the economic ruling class. Maybe something like that will happen now. The press, and Congress, have already moved away from their former idiotic worship of the Delphic statements of Alan Greenspan [ex-chairman of the Federal Reserve]. Now people are really angry about the terms of the bailout. And there was a Chicago sheriff who said he wasn’t going to evict anybody who defaulted on their mortgages. That’s what happens in this kind of crisis because who’s right, who’s wrong, the way the world is – everything is up for grabs.

So when the reigning ideas are questioned like this, deep economic reform becomes possible. Obama has brought out lots of new voters. And his election has got to be only the beginning of the period of transformation, not the end. In the New Deal, if that’s our model, it wasn’t FDR winning in 1932 that led to significant economic social and political change in the country; it was that FDR and his rhetoric – rhetoric designed to win elections – gave people a sense that they mattered, that they had influence, that they had hope. He created a climate which helped to encourage the great social movements of the 1930s: the movements of the unemployed, the farmers, the aged, and especially, of course, the labour movement. Those movements created a lot of social disorder, but also a lot of instability in the electoral system. And because they did, FDR responded to their demands.

Bill Greider said we should talk big, we should think big, we should think about how to reorganise the economy, we should think about the end of empire perhaps. I agree, but I don’t think we should overlook the more homely reforms that people will respond to. We don’t want a national health system that gives everything to the providers; we want to reign in the providers in our national health care system. We want good income support systems, a decent retirement system, and we want to regulate the unregulated economy.

In other words, if we really are in the middle of a new period of possibility, we should also be willing, not only to think big, but to take it one step at a time, building the institutional arrangements that empower ordinary people, and stand as levees, restraining the next episode of market plunder if it comes.

Frances Fox Piven is the author of The Breaking of the American Social Compact and Why Americans Still Don’t Vote

Doug Henwood

People say the credit crunch is not their problem; but it is ours, too. Some people say ‘let it all fall down’. I say that’s not politics, that’s nihilism. There is a temptation to echo what Edmund Wilson said after the 1929 crash: ‘one couldn’t help being exhilarated at the sudden, unexpected collapse of that stupid, gigantic fraud’. But the unemployment rate hit 25 per cent in 1933, and I don’t think we want to see a re-run of that.

But we can make the situation better.

First of all, equity infusions: the government should buy stock in the banks rather than asset purchases. There is a study by some IMF [International Monetary Fund] economists that looked at scores of banking crises around the world and they found that equity infusions, recapitalising the banks, is a much more effective way of dealing with this than buying bad assets and trying to sell them.

Next, financing it. Yes, it’s a giveaway to the bankers, but there is plenty of money at the top of society. The top 10 per cent of the population has 45 per cent of the income, the top 1 per cent about 16 per cent. The top 1 per cent has about $2 trillion in income – and we don’t have to take it all at once, but we can take bits of it over the course of several years…

Debt relief. The IMF study also showed that debt relief is an important part of getting out of any kind of financial crisis, so this is an instance in which economic efficiency and social justice coincide. So that is an important demand to make.

Re-regulate the financial system. The financial system is so sprawling, and complicated, global, and interconnected that it is a project that is going to take a long time, but has to be done so we don’t have a rerun of this nonsense five or ten years down the road.

If we are going to nationalise the banks, why not control them as well, and not just give them a blank cheque to run things as they were? There is an ideological opening; with the state getting so explicitly involved in rescuing the mess that finance brought on itself and us, there is an opportunity to push things in a better direction. Out of the wreckage we could create all kinds of new economic development institutions – non-profit, co-operative, locally owned. We can create institutions that provide low-cost financial services for people who are being fleeced at the moment.

And finally, just a few words on the politics at the moment. People are talking about the end of neoliberalism. Maybe so, though I see a lot more continuity between neoliberalism and the 400 years of capitalism that went before it than some people do. But that aside, there is an idea, popular among the left, right, and centre, that neoliberalism means that the state got out of the economy. The state never got out of the economy; markets are not the state of nature, they need to be established and maintained by state power. The nature of that state and what it does is what matters.

Doug Henwood’s books include Wall Street and After the New Economy. He is working on a study of the current American ruling class

Arun Gupta

I’m going to start with my conclusions first. I agree with Doug on nearly everything, though I think governments have got out of the markets. Their role is now only a supporting role, funnelling wealth to corporations – the crony capitalism that has run rampant.

Now we are in a severe economic crisis that requires dramatic action. It’s gone from the US to global and from the financial sector to the rest of the economy. The only institutions that can do anything about it are governmental, and there has to be global concerted action. Our role is to make sure that whatever the policies enacted, they are democratic, transparent, and accountable.

This failure and the need for systemic government interventions mean that our work is largely done on an ideological level in terms of arguing for the necessity of, for example, something like a green New Deal, or single-payer national health care, which are two proposals you hear a lot. That’s because it’s hard to argue against it when you have this massive intervention in the economy. This crisis might also end up doing what the anti-war movement hasn’t been able to do – bring about an end to the Iraq war.

But without a mass-based dynamic opposition with a clear vision, agenda and strategy, the neoliberal model will just reassert itself. And it is already reasserting itself. We see the US reportedly turning to the IMF for consultation, and Iceland going hat in hand to the IMF for a loan, and what they’ll get in return is a severe austerity program.

What we need is a poly-culture economy. Without it we’ll be vulnerable to other global contagions, and without diverse economic structures, whatever regulatory frameworks are put in place will just be undermined and overturned down the road. There is a huge opening for the left and anti-capitalists. I don’t think it’s that hard to come up with detailed programmatic proposals. What is much more difficult – and this is something we must tackle because the left does not like to think about it – is organisation and ideology.

I’ve been in a lot of meetings and discussions in the last few weeks around organising against the Wall Street bailout plan, and it comes up time and again. People don’t want to confront the need for organisation and the need to have a clear ideology because once you do it leads to political battles. But without it we can’t say who the agent of change is, and we don’t have anything to organise around.

Arun Gupta is the editor of the Indypendent, the newspaper of New York City’s Indymedia centre, and is currently writing a book about the decline of the American empire

Naomi Klein

One thing Arun didn’t talk about is the fact that he was the person who sent the email that led to the great protest on Wall Street – the email that made news all over before the protest even happened. Some of the signs at that demonstration, I think, give us an indication of where we might take this. My favourite was one which said ‘No socialism for the rich until the rest of us get some!’

As Doug said, crises are not new, and we may be in uncharted territory but we have experienced these bursting bubbles before. I have a chapter in The Shock Doctrine about the Asian financial crisis of 1997-98 called ‘Let it Burn’, because the very same banks that have been so anxious to get bailouts from US taxpayers now, at the time were saying, and this was a quote, that ‘what Asia needs is more pain’. Because, of course, Citibank, Goldman, Morgan Stanley, went into Asia after the crisis reached bottom and bought up the crown jewels of the Asian ‘tiger’ economies.

Anyway, what I wanted to quote to you from the book is something Alan Greenspan said at the time. He said that what he thought was being witnessed with the Asian financial crisis was ‘a very dramatic event towards a consensus of the type of market system which we have [in America]‘. In other words, Greenspan thought that the crisis was a lesson being taught to the Asian tigers for daring to protect their national industry. And, of course, the IMF imposed structural adjustment programmes which forced them to lower those barriers – which allowed the very Wall Street firms at the centre of this crisis to go in and engage in what the New York Times Magazine at the time called ‘the world’s biggest going out of business sale’.

Michel Camdessus, the head of the IMF at the time, agreed. He saw the crisis as Asia being reborn into American-style free markets. He said economic models are not eternal: very sanguine! There are times when they are useful and other times when they become outdated and must be abandoned. Once again, he saw it as a lesson.

And I think what’s interesting about that is that maybe it’s time for progressives to think of themselves as a sort of people’s IMF, though in more democratic terms, as we now really have evidence that this market model is broken. And clearly what is needed is some dramatic structural adjustment in the USA. So let’s play IMF.

Again in Argentina in 2001 the IMF tried to use the economic crisis to push through more structural adjustment, but the problem was that just a few months earlier they had been holding up Argentina as their model student – and they had already privatised everything. Also, the country itself had been very much indoctrinated in the idea that they were the model student, that they had followed the rules. And so it was much harder to sell the idea that you needed more neoliberal structural adjustment, and instead what you had was a popular revolt – and I think this is really important in this moment – against the entire expert class.

The slogan which was in the streets is a really good slogan for this moment: ‘Que se vayan todos’ – all of them must go. This was the period where they went through five presidents in three weeks, but it wasn’t just the politicians who went, it was the pundits, the economists, and because they had boasted so much about the miracle of Argentina, they found themselves bereft of the usual tools. Now, I think the United States in this moment is experiencing something a little bit similar in the sense that there is this consensus, and Obama has turned his election campaign into a kind of referendum on Friedmanite economic policies. Whether or not he is actually going to do it I think depends very much on the forces that we’re talking about in this room.

I want to talk about some short-term structural adjustment – the kind of pressure that can be placed on Obama right now.

Bob Rubin, Larry Summers – recently implicated in a fantastic piece in the New York Times, which I never thought I would read, questioning the Greenspan legacy, and pairing Rubin with Greenspan at every turn in creating the crisis we have now – have got to go, this is really crucial. I’m not just trying to make a popular point here, these guys are advising Obama on a day-to-day basis. When he wants to say that he has great people surrounding him, he talks about Bob Rubin.

And then, of course, we need to make the best of a bad situation: this terrible piece of legislation [the bank bailout]. But as Doug said, there is room to be arguing for equity instead of the buying of billions of dollars of this terrible debt. One of the things that’s incredible that’s happening now is they’re handing out no-bid contracts to the very companies that created this mess.

I’ve been writing about the expanding economy, going from Iraq to Hurricane Katrina, just feeding off the next disaster – well, the next frontier of disaster capitalism is cleaning up after capitalism. It’s a $700 billion industry, and expanding.

We know that this crisis is being transferred from Wall Street to Washington, and that all of these bad debts that are now on the public books are going to be used by the right to argue that the next president can’t afford to keep their campaign promises. Think of this as Republican insurance against an Obama presidency.

Everything he’s saying ‘Yes, we can’ to, they say ‘No, you can’t’. You can’t because we just dumped this huge crisis on your lap, and Obama is already capitulating – huge surprise. He’s already said, well, maybe I can afford some things like green energy and so on, but we’ll have to phase them in.

Here’s a big idea: I’ve been calling for the nationalisation of Exxon. Because I think if nationalisation is on the table, let’s go big – let’s not just nationalise junk, let’s nationalise the biggest corporate criminals of them all, the people who have left us with the biggest crisis that we face, which is climate change. And now we’re going to hear that we can’t afford the investments to address this crisis, to change course, that addressing climate change is a luxury we can no longer afford. This is the fight we have to win.

And, actually, we can’t nationalise them, because how would you tell the difference between a nationalised oil company and what you have right now? So we need to internationalise them: there needs to be an international trust and these huge profits won by the oil and gas industry have to be the money that we use to transform to a sustainable economy.

Naomi Klein is the author of the international best seller The Shock Doctrine: The Rise of Disaster Capitalism, which discusses the harmful policies being asserted during moments of crisis

This is an edited transcript of ‘An Offer We Can’t Refuse? Progressives Respond to the Wall Street Crisis’, an emergency discussion at the Brecht Forum, New York, held by The Nation magazine on 10 October 2008 Transcription: Carole Ludwig and Mary Livingstone
Author photographs by Marlowe Mason (marlowenyc@yahoo.com)

Obama is attracting huge numbers of new voters to the polls, especially young voters and African Americans, and he is winning unprecedented support from whites for a black candidate. The inclusive and eloquent Obama rhetoric to which this is owed not only softens racial identities, but it is also likely to neutralise the Republican use of the ‘southern strategy’ that has poisoned US elections for half a century.

Of course, Obama’s campaign still has to confront the well-oiled Clinton machine in the remaining primaries, as well as its efforts to change the rules regarding the allocation of delegates. Then, in the presidential election itself, he will have to overcome the panoply of dirty tricks and vote suppression tactics on which the Republican Party has relied in the past. Still, the campaign points the way toward a transformed and strengthened Democratic coalition; and this would create the conditions to empower social movements at the base.

Obama’s emerging electoral coalition is an ever-surprising work in progress. Because the young were his earliest and most vocal supporters, many, including the Clinton camp, underestimated his potentially broader appeal. African-American voters were a little wary of him at first, showing less trust than whites that the US could elect a black man as president. But Obama’s commanding victory in the South Carolina primary changed the calculus for many black voters, especially for the traditional civil rights leadership, who have since steadily moved toward him.

Obama did not do well in the early primaries among poorer white voters, perhaps because they had more confidence that Clinton, then the front-runner, could actually win. And he did less well than Clinton among Hispanics, perhaps for the same reason, and also because many Hispanics were tied to the famed Clinton machine.

But as the campaign has rolled on more of these voters have rallied to Obama, shifting the electoral map. Most important in his expanding voter base are white male Democrats who have nearly tripled their support since the populist John Edwards dropped out of the race. The blue-collar vote went to Clinton in Ohio, which has been bleeding manufacturing jobs, but Obama’s appeal there among white male Democrats (39 per cent), union members (45 per cent), and those lacking a college degree (40 per cent), is still impressive and promising for an African-American candidate.

Skyrocketing turnout

The real significance of the Obama candidacy, however, is the skyrocketing turnout, a trend that continued in Ohio and Texas. In fact, in Texas, more people voted before the election (the state opens up voting for a two week period before election day) than voted in the 2004 Democratic primary altogether. In Dallas County, where the African-American population is concentrated, turnout among Democrats was up nine-fold over 2004.
African-American voter turnout has been exceptionally high in the primaries generally. So too has turnout among the young, quadrupling in Tennessee, tripling in Georgia, Missouri and Oklahoma, and doubling in Massachusetts compared with 2004. In the 18 Democratic contests held during the first two months of the year, the youth vote increased over 2004 by more than 170 per cent.

The importance of rising turnout can hardly be overstated. US presidential elections typically attract about half of the formally eligible voters, and lesser contests attract far fewer. Turnout is especially anaemic among young and poorer people. This pattern dates from the turn of the 20th century, and is due to the interplay of an election administration system that makes registration and voting difficult and intimidating and party tactics crafted to suppress voting among potentially troublesome voter blocs. The resulting shrunken and misshapen electorate is an important factor in accounting for the conservative slant of US politics and policy.

Of course, voter enthusiasm and grit can in principle override these barriers, and sometimes it has, especially among African Americans, whose history implanted in them an almost messianic faith in the right to vote. US history since the civil war and emancipation is dotted with the occasions when blacks were seized by the hope that their votes would yield them the respect and the political influence to reverse the laws and tame the lynch mobs that kept them down.

In the post-civil war years, newly enfranchised freed men in the south braved guns and mobs in the effort to realise ‘the new birth of freedom’. They mobilised again in the mid-20th century, when the right to vote became a tenet of the civil rights movement. And even after the Voting Rights Act of 1965 was passed, protecting that right in principle, periodic black voter mobilisations faced obstructive and intimidating voter registration procedures, or the ‘ballot police’, voter ‘caging’ tactics and misinformation campaigns mounted by party operatives. Usually the operatives were Republicans, but when blacks challenged white Democratic big-city party organisations, it was the Democrats who acted similarly.

Neutralising the ‘southern strategy’

There is huge symbolic significance in a black candidate with a real chance of winning the presidency. Race has always played a pivotal role in American electoral politics. Fear and distaste of blacks has been used by the parties to lure white voters since the 19th century, and the effort to keep the black vote down also motivated the inventiveness of the US system of electoral administration with its rules and procedures to depress voting.

In recent decades, race has become even more pivotal to party strategies. Before the 20th century, most blacks had lived in the south, where they were stripped of the right to vote, and lived within the system of southern legal apartheid and lynch mob terror that disenfranchisement made possible. The great migration of blacks from the south to the urban north, a migration pushed by the mechanisation of southern agriculture and pulled by the availability of industrial employment, especially during the Second World War, brought African Americans into electoral politics, and into the urban base of the Democratic Party.

By the 1960s this fact became the basis of two contradictory developments. One was the emergence of the civil rights movement, itself largely based in the south, but nevertheless drawing political strength from the new concentrations of black voters in the Democratic cities. The second development was the rise of the Republican ‘southern strategy’, which took advantage of the identification of blacks with the Democratic Party to lure hitherto loyal Democratic whites, both southerners and working-class voters in the northern cities, into Republican ranks.

Barry Goldwater and George Wallace were the brazen spokespersons of the strategy, but every Republican presidential contender from 1964 on has relied upon it. And after the moral triumphs of the civil rights movement made the old racist slurs impermissible, new less obvious racist codes came into vogue in Republican campaigns. The code words denoting blacks included ‘welfare’, ‘crime’, and ‘illegitimacy’; still other code words signalled Democratic indulgence of blacks, such as disparaging references to President Johnson’s Great Society programmes, or simply the term ‘liberal’.

Obama is at least partially impervious to the stigmatising tactics of the ‘southern strategy’. One reason is the elegance and attractiveness of his person, along with his elite Harvard credentials. Another is his insistence on presenting himself not as a black candidate, but rather as the candidate of the majority who wants ‘change’. Of course everyone knows he is black, but unlike Jesse Jackson, for example, he does not talk much about blacks, or any particular minority group. Rather, he claims he wants to begin with the universal values we all share, and his campaign works to transcend targeted racial and ethnic payouts with an expansive and inclusive (if vague) multicultural rhetoric.

Another reason that Obama may be impervious to a revived southern strategy is his popularity among younger Americans. Even in Ohio, where Clinton won 54 per cent of the primary vote, the 17-29 year-olds turned out in record numbers and gave 61 per cent of their votes for Obama. It is the under-30s who are the big revelation of the campaign. All the evidence suggests that they are enthusiastic about Obama and not much affected by racial identities.

If this holds as the election proceeds, it will be due not only to the achievements of the civil rights movement, but also to the iconic role of African Americans in youth culture. Think about it. These under-30s spent their adolescence listening to black music and idolising black musicians; they plastered posters of black rappers and basketball stars on their walls; and they dressed in baggy trousers imitating black prison culture. If, as a result, they are at least partially immune to racist appeals, a historic change is indeed underway in American politics.

A new political era?

None of this is to say that we are on the cusp of political salvation. Political change, much less salvation, does not come so cheaply. No one gets to be a presidential contender without compromises, and Obama has made his share.
He has been criticised roundly by some people on the left for the vagueness and emotionality of his appeals. He has made some specific promises – he has a good economic stimulus plan, for example, that emphasises job creation and infrastructure development. But his health care proposals are scarcely distinguishable from those of the other Democrats; he proposes to withdraw from Iraq, but only gradually; and he has little to say about the defence budget. These may be decent steps when compared to what has gone before, but this is not transformational politics.

But focusing on the modesty of Obama’s proposals misses the point. When F D Roosevelt campaigned in 1932, his specific policy proposals were limited. Nevertheless, his bold rhetoric and the surge of voters to the Democrats set in motion a process that changed the United States, whether FDR intended it or not. The 1932 election created a huge new political space in which insurgent movements flourished, nourished by the sense that the new administration could not afford to ignore their demands. It was the movements of the unemployed, of the aged, of industrial workers and farmers that forced Roosevelt to act on relief and public employment, labour rights, farm supports and old age pensions. They pressed FDR hard, and because they did, they helped to forge the policy initiatives that we now know as the New Deal.

An Obama victory – if it’s big enough – could usher in another such transformational moment in American politics. If turnout remains high and the coalition holds, an Obama victory could mean a realignment of US electoral politics around a majority coalition similar to the one forged in the New Deal era, with African Americans replacing the white south as the reliable core of the coalition. Most importantly, a big Obama victory would also create new political space for social movements. It would simultaneously generate the hope that is always the fuel of movements from the bottom of society and it would put in place a regime that is susceptible to influence by those movements. ‘Yes we can’ could come to mean a lot more than an empty slogan.

Frances Fox Piven is distinguished professor of political science and sociology at the City University of New York. Lorraine C Minnite is assistant professor of political science at Barnard College, Columbia University, and co-author with Frances Fox Piven and Margaret Groarke of the forthcoming Keeping Down the Black Vote: Race and the Demobilisation of the American Voter

Still, many of us expected the Democrats to win, or at least we expected Kerry to win. We thought we could overcome Republican advantages by bringing new voters to the polls. The conventional wisdom has it that non-voters are preponderantly low-income, minority, and young, all groups that favor Democrats. But while that is broadly true, the pool of non-voters is vast, and voter get-out drives inevitably target only specific groups in the pool. So, the Republicans could launch a voter drive too, and they did, targeting suburban and rural areas, and drawing on networks of fundamentalist churches to widen their reach. State constitutional amendments against gay marriage also helped draw right-leaning voters to the polls. The turnout effort on both sides was remarkable, and in the end, it was probably a draw.

The underside of the voter turnout campaign was the Republican effort to bar likely Democrats from actually voting, by obstructing the registration of new voters, by placing challengers at the polls, by issuing false warnings of the risks of voting, or simply by making sure the lines at the polling places in Democratic districts were insufferably long. And then there were the efforts by state and local Republicans to distort the vote count. Reports abound of voter registration forms discarded, of provisional ballots not counted, and of suspicious tallies by electronic voting machines with secret codes and no capacity for a recount. We may never know what actually happened in the belly of these machines.

So, what have we learned, and what to do now? The usual lessons are that we should try harder next time – or vote harder, as one wag said recently. And we should promote an agenda of democratic reforms that make vote suppression and outright stealing less likely. I am for those things, but we are unlikely to win them unless we first win some elections.

In any case, I think there is another lesson in the failure of our efforts in campaign 2004. The democratic and egalitarian victories in American history were not won with voter guides and get-out-the vote campaigns. Nor were they won by Democratic Party initiatives. When we restrict ourselves to these conventional forms of electoral politics we cannot match the money and propaganda, the voter guides and get-out-the vote drives, of the right.

Electoral politics by itself doesn’t work for the left. Or rather it only works in the context of great upsurges of popular protest. This is the lesson of the mobs of the American Revolution, of the abolitionist movement that preceded the Civil War, of the labor movement of the 1930s, and the civil rights and poverty rights movements of the 1960s. The drama and disruption created by these movements gave them communicative power to match the propaganda of party operatives. The issues the movements raised also drew people to the polls in numbers far greater than voter drives can do. And because the movements were disruptive, because they impeded the functioning of major institutions, politicians were forced to respond.

So, yes, we should work on our agenda of democratic reforms, including a national right to vote, a national voter registration system, the implementation of the National Voter Registration Act, Election Day a holiday, non-partisan election officials, and so on. But we have to do more. Everything we know about the Bush regime argues they will be reckless and aggressive, in Iraq and perhaps Iran, at home with their tax and spending policies that threaten dire economic instability, and with social policy initiatives that are both cruel and short-sighted. The time when mass protest is possible will come. We should be ready and receptive, obdurate and bold. The hip-hop voter registration campaign had a slogan, “vote or die.” They were on the right track.