Over the past 30-35 years or so, the world as a whole has retreated from the high tide of state management of the economy that was reached around midcentury, and moved more in the direction of laissez faire. But I think it’s fair to say that though the trend has been perfectly general, the political leadership in this movement has tended to come from Washington and London, where Ronald Reagan and Margaret Thatcher were the loudest and clearest exponents of it and their successors on the center-left tended to confirm, rather than reverse, a new Anglophone consensus. And yet:
The British and American plans, though far from identical, have two common elements according to officials: injection of government money into banks in return for ownership stakes and guarantees of repayment for various types of loans. […] The Treasury’s openness to direct infusions of cash is a remarkable change in tone from a few weeks ago, when the Treasury secretary, Henry M. Paulson Jr., and the Federal Reserve chairman, Ben S. Bernanke, discouraged such actions in testimony before Congress. “Putting capital in institutions is about failure,” Mr. Paulson declared on Sept. 23. “This is about success.”
This is what a lot of left-of-center economists said in the first place, but the ideological taboo against nationalization was very strong. Now, though, the forces of looming collapse in the banking sector are proving even stronger. Thus, it looks like it’ll be George W. Bush, Hank Paulson, and Ben Bernanke who bring a very strong dose of socialism to the United States of America. And yet Andy McCarthy’s busy worrying if Barack Obama is a closet Maoist.