Gingrich using market crisis to push for further deregulation
In the wake of the Wall Street meltdown, there seems to be a growing consensus that the free-rolling days of financial deregulation are a big part of the problem. Even Sen. John McCain is now calling for more regulation.
But not everyone is on board. Some, like former Republican House Speaker and almost-presidential candidate Newt Gingrich from Georgia, are now using the crisis as an opportunity to push a raft of conservative policies.
Fresh off the success of his Drill Here, Drill Now campaign, which was instrumental in pushing offshore drilling from a non-starter to scoring a victory in Congress in a few months, Gingrich is now hosting a "Solutions Day" in Atlanta this weekend.
Noting that "the last few weeks have been painful economically," Gingrich will be pushing a policy agenda that looks like The Right's Greatest Hits, including school vouchers, cracking down on immigration and privatizing Social Security (!).
But Gingrich is also pushing for repeal of the Sarbanes-Oxley Act, a law passed in 2002 and signed by President Bush after a wave of corporate scandals, beginning with Enron. The bi-partisan bill sought to tackle issues like auditor conflicts of interest, enforcing penalties for white collar crime and even executive compensation. The bill passed 334-90 in the U.S. House of Representatives and 97-0 in the Senate.
Gingrich now blames Sarbanes-Oxley for "weakening the economy" and says it needs to be scuttled. Gingrich may be right that Sarbanes-Oxley has added to the cost of doing business, but can such regulations be blamed for the bad financial decisions that led to the shakiest economy since the Great Depression?
Naomi Klein, author of the excellent book "The Shock Doctrine," argues that Gingrich and the political right are using a time-worn strategy: weakening government to the point of failure, and then blaming the resulting "shocks" to the economy on the public sector, calling for greater assaults on regulation and public oversight:
It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same [...] What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor. A President McCain would embrace these policies willingly. A President Obama would come under huge pressure from the think tanks and the corporate media to abandon his campaign promises and embrace austerity and "free-market stimulus."
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Chris Kromm
Chris Kromm is executive director of the Institute for Southern Studies and publisher of the Institute's online magazine, Facing South.