The New Right

I've been trying to make sense of all the insanity coming from the right and it dawned on me that the connections made to "American principles" based in the American revolution comes from the playbook of the Austrian school of economics. I'm intimately familiar with the Austrians - their institute is in Auburn, Alabama and is called the Mises Institute after economist Ludwig von Mises. The strategy of the Republican party seems to be borrowed directly from the Ron Paul playbook in an attempt to build a political narrative based on the reationary illusion of returning to a pristine 1776, you know, when women, blacks, and landless men weren't allowed to vote in most elections but were counted in census roles to determine House seats.

Of course, this is somewhat immaterial, the narrative only plays to those who already vote Republican, but it sets the table for Austrian ideas to enter into the general election debate. In other words, as the Glenn Becks of the media world continue to spout this rhetoric, it opens space for ideas such as critiques of debt and the federal reserve board to seem less, well, wacky. It would seem that Saul Alinsky has, more or less, created the playbook for the political strategies of both parties, though the right would cringe if they actually knew who is the father of their politics.

Anyway, the critique of debt and the reserve is powerful. Our money, more or less, is created from thin air, and more specifically is created when someone applies for a loan and meets the credit rating criteria or as economic stimulus by printing money and selling treasury securities to investors and foriegn countries. The critique is that for an economy to actually be "free" whatever that means, money must represent something of "real" value like precious metals. In a sound economy, money shouldn't be allowed to "float;" it should be "fixed." All of this is arcane and is infinitely more complicated, but, basically, the critique from the right is going to be that the U.S. is in debt and this debt cannot be alleviated without a fundamental change in the monetary system itself. Also, floating money necessarily creates an interdependent globalized capitalism.

The left is not ready for this critique. I do not think Obama is in any danger, but House and possibly Senate races could hinge on these issues. The left should seize the debt narrative early and argue it from a Marxist perspective, without being noticeably Marxist, I might add. Little has been written on the credit system and money in the Marxist literature, and Marx himself saw no possibly way for the money system and the credit system to be collapsed. However, this is where we are at; money and credit are one in the same. Money, like all other commodities, can be bought and sold, but unlike other commodities, money greases the wheels of the circulation of commodities - it represents value in a particular way easing the exchange between unlike commodities. The left can argue that the collapsing of money into the credit system is certainly problematic, if and only if, the production of money gets no guaranteed value in return, such as by funding wars or subsidizing large corporations. The collapse of the credit system into the money system is proof that free market capitalism has grown beyond its natural limits - that there aren't enough natural resources on Earth to grease the wheels of commodity production. Capital is basically selling nothing (see credit default swap).

A left response would be to promote a system that could only produce money to build the infrastructure of the U.S. - healthcare, education, job training - social goods, and this is something which the Obama administration is already doing. Instead of the deregulation plus sound money which the right will propose, the left should propose reworked regulation plus social money. While it isn't a stretch, deficits and debt should be the central theme of the 2012 election. The left needs to be prepared; I would advise reading some Austrians economists.

P.S. The Green Party's Power to the People Campaign has nationalization of the Federal Reserve on the Agenda. Probably not a possibility as a general election talking point, but it shows the left (not the socialists, btw) are already hip to the issue.