Needed: one new Montesquieu, a Keynes and a James Madison

Hearing the day-to-day updates on our economic travails, it’s easy and probably psychologically necessary to forget that we managed to create vast wealth and then squander it. In addition to the immediate drama of unemployment and debt-induced penury, it’s tragic to observe what a range of socially worthwhile activities were ignored while we had the money to perform them in the rush to build more exurban tract McMansions and to peddle ever-greater piles of consumer goods produced by Chinese industrial slaves.

Here in New York we are facing cutbacks on all fronts, new taxes chipping away at our earnings and a devastating crisis in public transport funding, one of the greenest and most efficient aspects of life for the 14 million people who live here and a huge contributor to the cultural and intellectual life of the city. But instead of devoting some of our enormous accumulated capital to improving it, we saw our trillions disappear into hedge fund salaries and war profiteering while half the country applauded.

We need politico-economic thinkers on the historical scale of a Smith, a Hamilton, a Veblein and a Karl Marx to unspool the complexities of biped foolishness and pack mentality and from there construct new ways to protect us from ourselves. Just as the overthrow of Roman republicanism and French monarchy and the ensuing catastrophes led historians and philosphers to look for better ways to organize the state, the break-down of the capitalist engine ought to stimulate real innovation of thought and deed.

So far, however, the disaster, big as it is, remains too small to engender that kind of radical review and revision. Geithnerite gradualism prevails, and the system is subjected to the kinds of superficial tinkering that will leave most of its dangerous tendencies largely intact, especially if the threatened cataclysm is averted.

Simultaneously, the rhetoric of everyday economic life is only slightly dislodged from the Reaganite ideological straitjacket. Our on-air commentators nod to the extraordinary times but quickly return to the comfort zone of objections to increased taxes and doubts about the role of ‘gummint’, a tendency fed by populist revolt against the bankers’ sneaky opportunism.

But the bankers are only doing what the logic of their tiny world demands, and if those objecting to their sleazy ways were part of it, few would resist similar blandishments. The rules of our game, freely agreed to for the most part, permitted quick riches, ostentation and blithe unconcern, tempered by a dash of pity and a check to the United Way. No asset relief management scheme will overturn that Weltaunschaaung, and a two-year recession, rough as it promises to be, won’t either.