Carleton Progressive

Samir S. Bhala

Assumptions form the basis of economic opinion. Whether it is an economist characterizing human behavior among peers or a politician invoking fairness among the masses, their assumptions largely determine the conclusions they reach. Economists describe three economic belief systems – Conservative, Liberal, and Radical – each of which makes its own set of assumptions about how economies work. My personal belief system is based on a repudiation of the Conservative approach; it is an eclectic mix of Liberalism and Radicalism, attributable to my family’s experiences and my own study of recent history.

My view of the world is not as much pro-Liberal as anti-Conservative.  The Conservative view is that freedom, alongside the market system and competition, can and will solve every problem, that government at its best gets in the way and at worst acts as an instrument of oppression. To the Conservative economist, government intervention—no matter how noble the intention—is not worth its inefficiencies.  The condition of the individual matters more than that of society. Businesses should value balance sheets above breadwinners. Society ultimately benefits as wealth created by entrepreneurs trickles down to the masses.

I, too, value freedom. But I also value a system that ensures that my economic freedom or my family’s does not fall prey to the whims of unfettered wealth-making by a few. Especially in the last year, the Conservative mantra—regulation is wrong always, everywhere, and for everyone—has failed spectacularly. Also, at some visceral level, I am repelled by the notion that after I consume as much pie as I can and leave some crumbs for those who have nothing, society will gain. I guess this makes me a Liberal. I do believe that government is necessary for the safety net it provides to the poor and powerless. However, I also feel strongly that government, like ordinary households and persons, should, by and large, live within its means.

I attribute both of these views, as indeed many others, to the way I was raised. Although personal responsibility, the crux of Conservative thought, was a sine qua non in our immigrant family, and so was the need for compassion for those down on their luck. When I was four years old, my father defined responsibility for me as “knowing what you have to do and doing it unasked.” The evil of living beyond one’s means, and consequent debt, was drummed into my sister and me on a daily basis. (If it were up to my father alone, we would not have had a home until he had the full amount in cash.) Despite his fiscal conservatism, my father never identified easily with wealth or power. He says this was because he never aspired to belong to an exclusionary club. He proudly pays his taxes, believing it to be a small price for the opportunities this country has given him.

I subscribe to Liberalism, because it tries to ensure that nobody falls behind and that everyone has an equal opportunity. The two major economic shocks during my lifetime, the Enron scandal from earlier this decade and the financial meltdown of the past two years, have convinced me that market regulation is a necessary evil. I am a Liberal because the Kenneth Lays, Dennis Kozlowskis, and Bernie Madoffs proved to me that unchecked greed, while very good for them, left society in a tremendously horrific condition. As we do on December 7 and September 11, I believe all Americans should chant, unified, “Never again.”

Since the current crisis began, columns by economists have strenuously made the case for financial reforms similar to those offered generations ago by Keynesian Democrats and moderate Republicans.  I find my Liberal ideology fueled at times by the fire of Radical populism. Fairness, ensured by Liberalism, should govern the economic world. However, in the society in which I live, the economy farcically resembles the movie Fight Club. To me, the greedy drive for material gains, for goods people want but cannot afford, causes crises to emerge cyclically. Unless we address this root evil, in twenty years the nation will face yet another mega-crisis. With the fate of the financial reforms we need in peril, it seems as though I have no power, no voice in this system in which hired henchmen, lobbyists, can deflect necessary regulation and those responsible for the mess receive only our ire, not punishment.

As an aspiring economist, I qualify the assumptions with which I view the world as reactionary. Informed by life experience, I choose Liberalism, bordering on Radicalism, because I do not find Conservatism palatable. Liberalism appeals to me because of my family’s background and our traditional commitment to social justice. Without government intervention to curb market excesses and ensure an equitable playing field, the social and political promise of the United States—that anyone can grow up to do anything or become anyone—ceases to exist.

Some may disagree with my own beliefs, but I find myself validated by the occurrences of the past two years.  We have been, from the time I entered college, in a recession. Those with more expertise in the field of economics would describe the factors that contributed to the recession in detail. But for the purposes of this narrative, we will focus not on what, but who, caused this panic.

In 1999, President Bill Clinton, riding the wave of regulated economic prosperity passed a repeal of the 1932 Glass-Steagall Act, which separated commercial from investment banking. Commercial banks loan out the money, invested in them by consumers, to businesses and individuals. Investment banks sell loans and other securities to other companies. At the same time, President Clinton had managed to control the nation’s finances in such a way that he left for his successor a projected budgetary surplus of approximately $700 billion dollars in 2010.

Yet, despite the good times, the nation became fatigued with the Democrats and George W. Bush became President. Following the attacks of September 11, 2001, a massive well of support materialized for President Bush. He could do nothing wrong. From there, he engaged the nation in a massive social experiment, one for which Conservatives from Milton Friedman to Alan Greenspan had pushed. The leaders of the Conservative movement, rendered delirious by their religious adherence to the allure of free, supply-side markets and deregulation, advocated for massive tax-cuts for the rich and an end to checking the American economic system. For them, any regulation was too terrible a price, too monstrous of burden, for the markets to bear.

From this philosophy emerged massive attempts to let the private sector run unfettered. President Bush basically refused to fund instrumental bureaucracies like the SEC, which checks to see if whether or not financial transactions are legitimate, and FDA, which ensures that the food we eat and the drugs we take won’t kill us. But, according to the economic gurus, markets are self-regulating. The 1980s hyperbolized mantras of “greed is good, greed is necessary, greed is right” became the standard behavior of both private and public sectors.

Spurred by a seemingly endless economic boom in the housing sector, the nation engaged in a massive spending binge, the consequences of which led to excess all in the name of the privatization. Corporate accounting fraud, betting on businesses failure, creating shadow companies to assume bad assets, results of a fundamentally corrupted system that was built upon absolutely nothing precipitated the market crash in 2008.

So, when it comes time to clean up, assess damage for the crisis, who gets blamed? Bill Clinton, the President who signed a law which garnered bipartisan support in the last year of his term in office, or the George Bush, who got drunk off the lure of money and free lunches for eight long, agonizing years of divisive partisanship?

Conservatives would have us believe that Bill Clinton caused this mess. While repudiating George Bush’s actions—the likes of the Wall Street Journal claim that Bush was not truly a conservative—they cheer him for his foreign policy doctrine that led us to fight two wars, antagonize the world and saddle the nation with a crippling debt.

Thus, conservatives wrongly disown any sort of agency they possessed in the system, distancing themselves from George W Bush, calling him “not a real conservative,” despite their 8 year cheerleading refrain for unfettered markets, deregulation, and the like.

In their warped reality, they did nothing wrong. “I truly thought,” Alan Greenspan testified to Congress, “that what we did was right.”  It is in their defense of Goldman Sachs that one truly understands the Conservative mindset.  In the mind of many, Goldman Sachs could possibly have not done something illegal, as it lost money on the deals.  To them, profit is the bottom line.  Regardless of the fact that the firm sold what could only be appropriately described by its own CEO as “shit,” Goldman bet against the nation and, often times, won.  The nefariousness of this Conservative ideology has steeped so far into the system that the SEC, the regulators, the watchdogs, apparently watched pornography on computers for as much as eight hours a day.  Now, calls for strengthening reform, or holding people accountable in front of Congress, are chided by the intellectually dishonest as playing politics.

The guiding light of the past eight years allowed for a system in which the winners were allowed to win much, win always, and win outright.  This damned the rest of society to having to bear the burden of unimaginable social costs.  Yet, now, instead of ameliorating the situation, those advocates of the entrepreneurial spirit instead refuses to innovate, thinking it better to wait out this Democratic President as they did the last.  And that, my friends, is why conservatives are anathema to me.