One of the main criticisms of our former president, now blessedly entering into obscurity somewhere in Texas, is that he used the proclamation of various “states of emergency” to wrest extraordinary powers for his administration, and that this is one of the ways that modern governments, democracies or non-democracies, extend their powers. I concur, and I believe I made a similar argument on this blog at one point, no doubt citing trendy, show-offy authorities like Carl Schmitt and Giorgio Agabem. But what works for foreign policy or domestic threats of terrorism doesn’t quite work the same way for the economy. There, declaring a state of economic emergency can limit the options of the declarer of emergency, as everyone concludes that what needs to be done is to fix the emergency, while the underlying problem goes unaddressed.
Let me propose a new typology. In every economic emergency, there are two types of presidential advisors, Raymonds and Rexfords. Raymond Moley and Rexford Tugwell were two charter members of FDR’s “brain trust,” advising him in the early phases of his presidency how to deal with the deepening crisis of the depression. (Both were Columbia professors, by the way.)
Moley agreed with FDR on the need for emergency measures, but ultimately broke with FDR over the way the New Deal was increasingly antagonistic to big business (an antagonism that was returned in spades), and urged reconciliation. By the late 1930s he was writing anti-New Deal columns, in the Hearst papers, I believe.
Rexford Tugwell, on the other hand, was a prime example of what Howard Brick in his very useful book, Transcending Capitalism, has called “post-capitalists,” progressives who weren't socialists, but believed that capitalism needed to evolve to something better and fairer, and it was the job of government to push that evolution along, and he helped to push along many New Deal policies.
It seems to me that Obama has been listening to too many Raymonds, and not enough Rexfords; the reason why the stimulus package has bogged down (beyond the usual Republican perfidy) is that it is being sold as an emergency, a jolt, a stimulus, an economic deus ex machina that somehow hovers outside the economy and will descend to make everything right. It is too “slow,” and will take too long to enter the economic bloodstream, Republicans argue. But of course, the quickest way to get something into the bloodstream is by injection, and injections are dangerous if they are too big, so in the end we will get 10ccs of cure and 100ccs of placebo.
But what we need to do is to recognize that is not a one-time emergency, but a crisis of capitalism, and we need to address the underlying condition, and not the surface symptoms. (Or rather we need to address both, and recognize that any stimulus package, however perfectly designed, will still leave us deep in an economic slough.) In this, I am not calling for socialism, but for post-capitalism. A better and more efficient capitalism.
The problem is that when FDR became president in 1933, he benefited from 20 years of progressive thought on a post-capitalist future. For the past two decades, Democrats have tried to find ways to love market capitalism at its most aggressive, and for the most part, the party is utterly unprepared for the dimensions of the crisis at hand. That is why the decision to limit compensation to half a mil for executives taking TARP money is so salutary.
It is not the money per se—-though it is touching to hear the caterwauling of business types saying this will ruin American business—-but the way in which excessive compensation packages have utterly distorted the way in which American capitalism and especially American finance has functioned, and encouraged systemically risky behavior. This is a popular move, but it is far more than, as some would have it, an expression of populist envy at their betters. It is Obama’s first serious step to the post-capitalist future he will need to create for our nation to emerge from this economic morass relatively intact; it is Obama summoning his inner Rexford Tugwell.