Shock the Monkey

The current economic crisis may be about to lead to some of Naomi Klein's Shock Doctrine - only this time it could be the free market ideologues at the end of the electrodes.

One eminent economist widely credited with accurately anticipating the economic meltdown, New York University's Nouriel Roubini (AKA 'PermaBear' and 'Dr. Doom'), now argues that there will need to be massive government-funded public works and social welfare expenditure programs to revive the economy, actions which would have substantial political implications:

The federal government should have a plan to immediately spend on infrastructure and new green technologies; also unemployment benefits should be sharply increased, together with targeted tax rebates only for lower income households at risk; and federal block grants should be given to state and local government to boost their infrastructure spending (roads, sewer systems, etc.). If the private sector does not spend and/or cannot spend, old-fashioned traditional Keynesian spending by the government is necessary. It is true that we already have large and growing budget deficits; but $300 billion of public works is more effective and productive than spending $700 billion to buy toxic assets.....The financial and economic conditions are extreme; thus extreme policy action is needed now to save the global economy from that very ugly prospect.

Bill Kristol once privately told his fellow Republicans that the biggest risk of public healthcare wasn't that it wouldn't work, but that it would, and by providing effective universal health care the Democratic party would gain the kind of durable semi-permanent realignment that the GOP was trying to engineer for themselves. With the kind of control over the legislature Americans seem poised to give him and a demoralized opposition Barack Obama has a chance to prove him right.

Here in Canada we should be hammering away at the reeling proponents of deep integration; Harper has made a big deal the last few weeks about how insulated Canada is from the crisis engulfing the Americans - but remember the Conservatives and the Liberals have been engaged in a long term project to strip away all that insulation. Now's the time to draw the connections and keep the pressure on. The blogger who's my primary resource for deep integration news and analysis is Creekside - I suggest you read her if you aren't already.

And from now on the next time somebody blurbles on about how great deregulation is and how we should just get out of the way of the genius of he market and let the private sector control every aspect of our lives remind them that was the thinking behind what has happened the last few weeks.

It's time, at long last, to put a fork in the Reagan revolution.