The Wall Street bailout and the threat of dictatorship

Recriminations have continued to reverberate internationally over the vote in the US House of Representatives Monday to reject a $700 billion bailout package for the Wall Street banks.

Much of the opposition in the 228-to-205 vote to defeat the bailout was attributed to representatives--Democratic and Republican alike--who face tight races for their seats in November and fear being tarred by their opponents as shills for Wall Street who handed over hundreds of billions in taxpayers’ money to the CEOs and speculators who are responsible for the crisis.

In this sense, the overwhelming hostility of ordinary working people toward this massive transfer of public resources to the super-rich found its expression, highly distorted as it was, in the measure’s temporary demise.

What is the lesson drawn by much of the political establishment, as reflected in media commentary? That the American government is too susceptible to the will of the people to respond as required to the demands of finance capital.

This is the theme sounded in a number of commentaries, some of them penned by individuals with significant ties to ruling circles.

Representative of this ideological trend is a column in Wednesday’s Washington Post by Michael Gerson, George W. Bush’s former chief speechwriter and senior advisor, who is currently a senior fellow at the Council on Foreign Relations. Entitled “Too Small for a Big Crisis,” the piece portrays a dysfunctional Congress.

Gerson begins by characterizing the vote with a lurid historical metaphor. “The Bastille of establishment opinion has been stormed and taken, at least temporarily,” he writes. “But the revolution has irresponsibility in its soul.”

He notes that the vote came despite the overarching unanimity within the ruling elite in support of the bailout. “[S]eldom has America’s governing elite been more united in response to a national challenge,” he writes, with the administration, the leadership of both major parties and both the Democratic and Republican presidential candidates all supporting the bailout proposal.

After apportioning blame between “partisan” Democrats and Republicans wedded to “ideological purity,” Gerson gets to the heart of his concerns.

“Though some compromise may eventually be passed,” he declares, “it is now clear that American political elites have lost the ability to quickly respond to a national challenge by imposing their collective will. What once seemed like politics as usual now seems more like the crisis of the Articles of Confederation--a weak government populated by small men. And this must be more frightening to a world dependent on American stability than any bank failure.”

Gerson’s second historical analogy drawn from the age of the great bourgeois revolutions is as potted as the first. The crisis of the Articles of Confederation gave rise to the House of Representatives and the US Constitution that created it. Neither was crafted with the aim of allowing “political elites” to quickly impose their “collective will.”

The Constitution’s Article 1 created Congress as the first branch of the US government, meant to most closely reflect the will of the people. This was true, in particular, of the House, with its members subject to popular election every two years. Those who drafted the Constitution envisioned the body as a bastion against tyranny, endowing it with the power to oust presidents through impeachment and the exclusive ability to initiate legislation raising revenues, thus enabling it to exert decisive power over the national purse.

Of course, such principles and powers have been steadily eroded over the course of many decades, with the consolidation of ever-greater power in the hands of an imperial presidency. Over the last eight years, this process has accelerated dramatically, with Congress accepting the imposition of a president installed in office by means of electoral fraud and the diktat of a Republican majority on the US Supreme Court, then rubber-stamping a criminal war and collaborating in sweeping attacks on basic democratic rights. Those who fill the House seats are indeed “small” men and women, dominated by concerns for their political careers and subservient to the big business interests that control both major parties.

Yet, to the extent that these miserable politicians are still influenced even in the most limited manner by mass sentiments that run counter to the interests of America’s corporate and financial rulers, the present set-up is deemed to have become intolerable.

“This is dangerous,” writes Thomas Friedman, the senior foreign policy columnist for the New York Times, in a column published Wednesday. “We have House members, many of whom I suspect can’t balance their own checkbooks, rejecting a complex rescue package because some voters, whom I fear also don’t understand, swamped them with phone calls. I appreciate the popular anger against Wall Street, but you can’t deal with this crisis this way.”

In short, the opposition of the majority of the American people cannot be allowed to stand in the way of a “complex rescue package” designed by “experts” like Treasury Secretary Henry Paulson, Goldman Sachs’s former CEO, for the purpose of bailing out his colleagues on Wall Street and rescuing the fat portfolios of individuals like Friedman.

George Will, the Washington Post’s pompous right-wing columnist, had a few choice words of advice: “Congress should disconnect from a public that cannot be blamed for being more furious about than comprehending this opaque debacle.” So much for the “House of the People.”

Across the Atlantic, where furor reigned in financial circles over the bailout’s defeat, media reaction was even more blunt. The Times of London carried a prominent column entitled “Congress is the Best Advert for Dictatorship.”

“The most flattering reading of the turmoil in Congress this week has been that this is democracy in action,” wrote columnist Camilla Cavendish Wednesday. “Personally, I have never felt more attracted to benign dictatorship.”

This provocative language, drawing the logical conclusion of the anti-democratic sentiments being expressed more widely, ultimately expresses the objective ramifications of the economic and social crisis that is eating away at US and world capitalism.

The crisis is being utilized to effect an ever more immense concentration of economic power that is incompatible with political democracy. Three banking behemoths--Citigroup, Bank of America and JPMorgan Chase--are gobbling up their failing competitors and now control fully a third of US bank deposits.

At the same time, the crisis is intensifying the social inequality that pervades every aspect of life in America, a country where the top 1 percent has more wealth than the bottom 90 percent combined. Layoffs and foreclosures are mounting, while workers are suffering sharp cuts in real wages. It is under these conditions that the ruling elite is attempting to ram through the greatest transfer of wealth to the financial oligarchy in history.

These intense social antagonisms cannot be contained within America’s existing political set-up. The furor over the vote in the House serves as a warning that capitalism in crisis will inevitably move toward new forms of rule capable of defending the economic dictatorship of finance capital by means of an open political dictatorship against the working class.

This threat cannot be confronted within the framework of the existing two-party system. It demands an irrevocable break with the Democratic Party and the organization of a new, independent political movement of the working class fighting for the socialist reorganization of society. This is the alternative advanced by the Socialist Equality Party and its candidates in the US presidential election, Jerry White for president and myself for vice president.

To find out more about the SEP campaign, visit www.socialequality.com or contact us.