Lessons of the Blackout

Article excerpt

The New York-to-Detroit blackout was one of those brief, sensational moments of chaos that leave behind a resonant political message. There have been many such moments in the past few years, when "efficient markets" turned on a gullible citizenry and delivered brutish reprisals: when California's deregulated energy market, led by Enron, scammed consumers for tens of billions in a manipulated price run-up; when the stock-market meltdown ate the baby boomers' retirement savings; when newly created megabanks like Citigroup and JP Morgan Chase duped their retail customers and masterminded gross financial frauds for companies like Enron; when the public's "trustee" of the broadcasting airwaves, the FCC, granted still greater concentration for the major media conglomerates. One way or another, people and politicians rebelled.

The common message of these events is the end of an ideological era. The long-running conservative imperative for deregulation has been a driving idea for thirty years. The public interest embedded in economic regulation was nullified by law, the marketplace set free to work its "magic." Great changes swept across business and financial sectors as a result, many new doors were opened for technological advancements. But an ugly corollary always accompanied the triumph of markets: Left unprotected by legal guarantees and restraints, the people are ignored, abused and screwed, then often have to pay to clean up the mess. Many more people understand this now, more concretely and universally than at any time since the 1970s, and politics is beginning to respond (even right-wingers mobilized against the FCC's giveaway). The Bush crowd will never give in to reality (yet another reason to toss them out next year).

A new moment has arrived, nevertheless. Political awareness may shift gradually, but it's time to think anew and ask how the regulatory system can be repaired, restored, reformed to carry out the public goals that were systematically dismantled. Where are the left-liberal thinkers with new concepts? Environmentalists, for instance, have created voluntary enforcement agencies like the Forest Stewardship Council, which could be prototypes for redesigning more effective government regulatory agencies.

The exploration must begin by recognizing how and why the old regulatory systems failed. The politics of deregulation was not driven by corporate greed alone (though greed was always a hearty motivation). The old liberal order is not going to be re-enacted--and shouldn't be, because the old order broke down for its own reasons. …