While our representatives and Senators in Washington fuss over the immediate work at hand of crafting an urgent “economic rescue plan”, Harold Meyerson has begun to take a wider perspective. Meyerson, executive editor of the American Prospect, writes in the Washington Post that we are looking at nothing less than the end of Reaganism:

We are, just now, stuck between eras. The old order — the Reagan-age institutions built on the premise that the market can do no wrong and the government no right — is dying. A new order, in which Wall Street plays a diminished role and Washington a larger one, is aborning, but the process is painful and protracted.

It shuddered to a halt on Monday, when House Republicans, by 2 to 1, declined to support the administration’s bailout plan. To lay the blame on Speaker Nancy Pelosi’s speech (in which she even noted the work of House GOP leaders in crafting the compromise) is to miss the larger picture: The proposal asked Republicans to acknowledge the failure of the market and the capacity of government to set things right. It asked them to repudiate their worldview, to go against the beliefs that impelled many of them to enter politics in the first place.

So as America experienced a financial crisis, House Republicans experienced a crisis of faith. And on Monday, most of them opted to stick to their faith, whatever the financial consequences for the nation.

This seems right to me. Since the 1980s, America’s economic policy has been dominated by the sweeping changes brought by Reagan conservatives. Some of these changes were surely much needed corrections to the excessive government of the previous era, but it now seems obvious that it has gone too far. The moderation of George H. W. Bush and Bill Clinton offered a valuable mid-course correction, but in the past decade Wall Street ran amuck and government took its eye off the ball.

When I look at the sheer magnitude of the crisis, what comes to mind for me is that history has judged the era of conservatism a failure. I think of the end of the Soviet empire, and how its failure seemed to put to rest any last vestiges of credibility for the communist ideology. Now we are seeing a massive failure of the ideology of free markets, and–if the Democrats succeed in November’s elections–the start of a new order.

Whoever is elected president will have an enormous task. He must articulate a creative vision for a new era of sensible re-regulation, fiscal responsibility, and accountability for those who have been enriched by the Wall Street debacle. He must take advantage of his bully pulput to help shift American culture from its addiction to debt and instant gratification more towards a culture of greater self-sacrifice, national unity, and commitment to the common welfare.

These are not particularly liberal goals or conservative goals, but may be the cornerstone of a more pragmatic and centrist philosophy of governance. Of course, by today’s standards calling for the short-term socialization of much of the financial sector of the economy seems very left wing. And since the times call for a massive change from the status quo, conservatism itself has become far too risky. Yet amazingly this radical plan is surprisingly close to winning the support of both branches of Congress and the president.

The next American president will have a rare opportunity for greatness. He must fashion a progressive course correction for our out-of-whack economy–a more equitable balance between individual economic freedom and social ownership–and thereby assist the emergence of a more evolved economic foundation for our society.

On the text colors, see the “Color Key”.

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Technorati Tags: economics, financial crisis, politics

Tags: economics, financial crisis, politics

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