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Restore the Wetlands. Reinforce the Levees.

The Credit Crisis and the Social Contract


LNW_BelieveIt’s significant that the economic crisis threatening the U.S. and the global economy is a credit crisis, a collapse of confidence. The word “credit” derives from the Latin credere, to trust, believe. But how can financial institutions believe in each other when they’ve played Enron-like shell games to the point where no one knows what anything is worth anymore? How can anyone have confidence when regulations are legislated away and there is no adult supervision?

The dog-eat-dog feeding frenzy we’ve seen on Wall Street and Washington in recent years obviously does not provide a sound basis for a sustainable society and economy. It’s inherently unstable: it’s not good for business, and it’s hell on people. We are all in this together, nationally and globally, and the way we see it, the only sustainable economy is one based on principles of the Golden Rule. Enough damage has been done and felt that this statement should be seen as a realistic, practical prescription for stability rather than as a sweet dream.

We call for managed capitalism and a restoration of the social contract, a repair of the social safety net and a more equitable distribution of wealth. To endure, to be fair, the economy and society must be based upon a two-way street of reciprocal obligation and fulfillment: Everyone must contribute, but no one should be left to sink or swim.

Part of the ancient idea of the social contract—the spirit of cooperation that made possible the evolution from a state of nature to civil society—is the deeply held notion, as deep as conscience, that if the ruler does not govern justly, then the people are not obligated to obey. Some say—and we agree—the people are justified in changing the government.

We see New Orleans after Katrina as the epitome of the social contract broken. As we’ve said before, the Lower Ninth Ward is the national predicament carried to an extreme. It is this vision that drives Levees Not War, and it is because we know Barack Obama and Joe Biden understand the need to restore fairness and hope to the American way of life that we are vigorous supporters of their campaign. And this is why we urge our readers to join us in contributing not only financially but with phone calls and door-to-door, get-out-the-vote efforts to change the government in Washington, and local government too.

For more about “managed capitalism” and for lucid, “razor sharp” explanations of how Wall Street and Washington got us into this mess, we highly recommend Robert Kuttner’s excellent The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity (coming soon in paperback).


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