Conservative Catastrophe! Liberal Opportunity?

Something’s busy dyin’, but is anything being born? The age of market extremism, as Kevin Phillips has termed it, is shuddering to a halt, undone, as in all its previous incarnations, by its own excesses. The shift in public opinion on big business and regulation in the past several months has been stunning; the American people have soured on the dominant ideology of the past quarter-century. To what degree Democrats are inclined, and liberals able, to use this change in the zeitgeist to alter the American agenda is by no means clear. Ready or not, however, here comes their big chance.

The Public Moves

By midsummer, all the polls were reporting a sea change in the public’s view of the political economy. Consider the numbers from a succession of polls taken for the networks and major newspapers in June, July, and early August: a total of 67 percent of Americans believed that most corporate executives were dishonest; just 6 percent said they had “quite a lot” of confidence in big business. Asked whether they thought regulations were necessary to protect consumers and the environment or an unnecessary hindrance to business, Americans came down on the side of regulations by a 52 percent-to-30 percent margin-a dramatic turnaround from the height of Gingrichism in January 1995, when they rejected regulations by 47 percent to 40 percent. For that matter, respondents opposed the privatization of Social Security by 55 percent to 41 percent, whereas just last December they were evenly split.

Behind these reversals is a crisis of faith in actual existing capitalism. All major market sell-offs, of course, stem from crises of faith: investors stop believing in the future of the stocks they’ve purchased, awakening-often, in a cold sweat-to the realization that their equities are impossibly overvalued. Like Wile E. Coyote, they can run through mid-air until they notice there is nothing beneath them. Then they plunge to earth.

But the current crisis of faith has three other dimensions that we haven’t seen since 1929 and its immediate aftermath. The first is the realization that the numbers on which investors base their decisions-the audited statements of profits and income that corporations release-have been cooked. The second is the realization that the key players in the system-CEOs, CFOs, corporate directors, accounting firms, and stock analysts-have all been complicit in the cooking.

The third is the realization that the Republican Party-in both the legislative and executive branch-cares more about big business than it does about ordinary Americans. Americans have long known that the GOP is the party of business, of course, but now they are stewing about it. July was the cruelest month for Republicans who read the network polling: they found that 50 percent of Americans believe that George W. Bush sides with corporations over just plain folks (37 percent believe the opposi...