It began with verbal harassment. Under the 80’s refrain that “Government is the problem”, they call for starving the beast through ever-lower taxes, unleashing the markets through deregulation, globalization of trade, and privatization of programs and services. Amplified by right-wing media and talk-show hosts, the criticism of governing officials and promotion of free-market solutions is unrelenting, goes unchallenged.
Then, through multiple bank crises, traders and speculators discovered how to bluster when caught. As a result, accountability shifted: Market gains were privatized, creating immense wealth for the few, while market losses were socialized, crating huge debts for everyone else. The argument was that payouts to attract, retain, and reward talent; subsidies, stimulus, and bailout re lifelines to institutions both too big to fail yet hapless victims of government policy. It made no logical sense, but it caught on as populist wisdom.
Today, it’s physical. Having loaded governments with debt and stretched social safety nets to the limit, the financial elite are directly challenging governments and workers. In a classic bear raid, speculators whisper rumors, rating agencies downgrade bonds, and traders raise borrowing costs. Governments are forced into austerity programs to eliminate benefits, promote markets, and privatize public assets. Starting with Greece, rolling through Europe, now arriving in America, market-makers increasingly drive policy for their own gain.
Where does it end? Dystopian writers often imagine a Corporatized future, where the Market replaces the State. As in every schoolyard, the bully aspires to authority; as in every age, power yearns for authority. So, today, financial interests believe they are an election away from power.
But sovereign governments, democratic and autocratic, already occupy that seat, and they have laws and tools to ensure both individual and institutional survival. At some point, their instinct for self-preservation will outweigh their need for campaign contributions. There are finally stirrings within the GOP against the Tea Party; within the European Union against the banks and rating agencies. There will be more.