It is no longer our economy but our democracy that is in peril. Financial collapses lead to political extremism. The rage bubbling up from our impoverished and disenfranchised working class, seen at John McCain rallies, presages a looming and dangerous right-wing backlash.
As the public begins to grasp the depth of the betrayal and abuse by our ruling class, as the Democratic and Republican Parties are exposed as craven tools of our corporate state, as savings accounts, college funds and retirement plans become worthless, as unemployment skyrockets and as home values go up in smoke, we must prepare for the political resurgence of a reinvigorated radical Christian right. The engine of this mass movement — as is true for all radical movements — is personal and economic despair. And despair, in an age of increasing shortages, poverty and hopelessness, will be one of our few surplus commodities.
Karl Polanyi in his book The Great Transformation, written in 1944, laid out the devastating consequences — the depressions, wars and totalitarianism — that grow out of a socalled self-regulated free market. He grasped that “fascism, like socialism, was rooted in a market society that refused to function.” He warned that a financial system always devolved, without heavy government control, into a gangster capitalism — and a gangster political system — which is a good description of the U.S. government under George W. Bush. Polanyi wrote that a self-regulating market, the kind bequeathed to us by Ronald Reagan, turned human beings and the natural environment into commodities, a situation that ensures the destruction of both society and the natural environment. He decried the proposition that nature and human beings are objects whose worth is determined by the market. He reminded us that a society that no longer recognizes that nature and human life have a sacred dimension, an intrinsic worth beyond monetary value, ultimately commits collective suicide. Such societies feed on themselves until they die. Speculative excesses and growing inequality, he wrote, always destroy the foundation for a continued prosperity.
The corporate con artists and criminals who have hijacked our state and rigged our financial system still speak to us in the obscure and incomprehensible language coined by specialists at elite business schools. They use terms like securitization, de-leveraging, structured investment vehicles and credit default swaps. The reality, once you throw out their obnoxious jargon, is not hard to grasp. Banks loaned too much money to people and financial institutions that could not pay it back. These banks are now going broke. The government is frantically giving taxpayer dollars to banks so they can be solvent and again lend money. It is not working. Bank lending remains frozen. There are ominous signs that the government may not be able to hand over enough of our money because the losses incurred by these speculators are too massive. If credit markets remain in a deep freeze, corporations such as AT&T, Ford and General Motors might go bankrupt. The downward spiral could spread like a tidal wave across the country, especially since our corporate elite — including Barack Obama — seem to have no real intention of bailing out families who can no longer pay their mortgages or credit card debts.
Lenin said that the best way to destroy the capitalist system was to debauch its currency. If our financial disaster continues there will be a widespread loss of faith in the mechanisms that regulate society. If our money becomes worthless, so does our government. All traditional standards and beliefs are shattered in a severe economic crisis. The moral order is turned upside down. The honest and industrious are wiped out while the gangsters, profiteers and speculators amass millions. Look at Lehman Brothers CEO Richard Fuld. He walks away from his bankrupt investment house after pocketing $485 million. His investors are wiped out. An economic collapse not only means the degradation of trade and commerce, food shortages, bankruptcies and unemployment; it means the systematic dynamiting of the foundations of a society.
The USA Patriot Act, the FISA Reform Act, the suspension of habeas corpus, the open use of torture in our offshore penal colonies, the stationing of a combat brigade on U.S. soil, the seas of surveillance cameras, and the brutal assaults against activists in Denver and St. Paul are converging to determine our future. Those dark forces arrayed against U.S. democracy are waiting for a moment to strike, a national crisis that will allow them in the name of national security and moral renewal to shred the Constitution. They have the tools. They will use fear, chaos, the hatred for the ruling elites and the specter of left-wing dissent and terrorism to impose draconian controls to extinguish our democracy. And while they do it they will be waving the U.S. flag, singing patriotic slogans and clutching the Christian cross. Fuld, I expect, will be one of many corporatists happy to contribute to the cause.
This is a defining moment in U.S. history. The next few weeks and months will see us stabilize and weather this crisis or descend into a terrifying dystopia. I place no hope in Obama or the Democratic Party. The Democratic Party is a pathetic example of liberal, bourgeois impotence, hypocrisy and complacency. It has been bought off. I will vote, if only as a form of protest against our corporate state and an homage to Polanyi’s brilliance, for Ralph Nader. I would like to offer hope, but it is more important to be a realist. No ethic or act of resistance is worth anything if it is not based on the real. And the real, I am afraid, does not look good.
Chris Hedges is a former New York Times foreign correspondent. A longer version of this article originally appeared on truthdig.org.