Ideological Warfare

In September 2008, the financial markets in the United States collapsed. In just two days, the stock market fell by 700 points. Then, beginning October 6 and continuing for a week, the Dow Jones Industrial Average fell over 1,874 points, or 18%, in its worst ever weekly decline, from both a point and a percentage basis. The Dow, in fact, fell 33.8% in 2008. On September 25, 2008, with Republican Representative Mike Pence of Indiana President Bush, in a Presidential address to the nation, spoke about the crisis and outlined a plan to the American nation for a $700 billion bail out package. On Fox News that same evening, Newt Gingrich described the plan as the introduction of socialism in America. In a discussion about the bailout, Sean Hannity, on the same channel, called it the biggest expansion of government in American history. (Foxnews.com 2008)

All of this was happening during one of the most intensely fought Presidential campaigns in American history between Barack Obama and John McCain. The contest brought two opposing views in stark relief against each other. Obama, during his campaign, disparaged the “trickle down” economic theory of creating wealth, while his opponent John McCain lauded the idea of tax cuts to big corporations as the way to create jobs and prosperity.

In an article, “Comrade Bush and the Banks”, one syndicated columnist wrote:

The current proposal by the US Treasury to spend US$600 billion of tax-payers’ money buying up the worst of the sub-prime mortgages only emphasizes how far we have traveled from the triumphalism of the free-marketeers in just a few months. Just as China has developed a “socialist economy with Chinese characteristics,” so the US is getting a socialist economy with American characteristics…The panicky flight from free-market orthodoxy in the United States is bound to fuel a revival of government intervention and welfare-state policies in the rest of the world. (Dyer 2008).

The crisis in the American financial system brought to the fore the difference between two positions on economic theory after the dissolution of the Keynesian consensus. These positions can be described without much dispute as the ‘liberal’ (as espoused by say, Paul Krugman, and not to be confused with neo-liberalism) or possibly ‘neo-Keynesian’ approach, and the ‘conservative’ (as espoused by say, Milton Friedman) approach to economics. Liberals, for example, feel that government spending is the way to stimulate the economy; conservatives advocate tax cuts, particularly to big business, as the best means of stimulating the economy.

There has not been a consensus on one particular economic paradigm. As such, the debate waged between these approaches can perhaps be accurately described as ideological warfare. Each side brings out its heavyweight economists to validate its position. The weapons utilized in this battle are not so much objective scientific evidence as rhetoric, salesmanship, propaganda and spin. How do we, in these circumstances, determine the worth of the arguments on each side? In fact, can this be done at all or is it a partisan ideological struggle? Certainly, however, the nature of this ideological warfare can be studied and analyzed. Such an analysis will yield a great deal of insight into the reasons why a particular position is taken up.