A social democratic response to the crisis must begin by reasserting the crucial role of the state in risk management. If individuals are to have security of employment, income and wealth, governments must establish the necessary legal and economic framework and enforce its rules. The fact that government is the ultimate risk manager both justifies and necessitates action to mitigate the grotesque inequalities in both opportunities and outcomes that characterise unrestrained capitalism and were increasingly resurgent in the era of economic liberalism.

I might have some differences at the margins, but I wouldn’t dissent from Quiggin’s broad policy approach. Where I would sound a note of caution, however, is his assumption that a restructured economy will necessarily entail a shrunken financial sector. I’m not sure that’s true. As I observed with respect to the recent G20 summit meeting, a note of complacency has crept into discussions of the GFC. There is an apparent assumption that a bit of government prodding to get credit markets moving again, a little more regulation, and a bit of symbolic Wall Street bashing will do the trick. Then business can resume more or less as normal. That assumption, or assumptions like it, are colouring the recent partial revival in equity markets. It’s being driven also by the Obama administration’s actions (and inaction) – controversies over AIG bonuses aside, there’s a distinct sense that whatever Wall Street wants, it will get – including a revival of trading in credit default swaps and other derivatives.

Neo-liberalism may be a rhetorical dead dodo, but the unwillingness of the Obama administration to actually seize the moment of crisis to bring about ‘change we can believe in’ suggests that the practices which led to the current baleful situation may be only in temporary eclipse. In retrospect, the appointments of Tim Geithner and Larry Summers were probably a sign of the times, and more so the thinking that underlay those selections. Gravely disappointing.

Lapham, playing himself, leads his empty vessels through the streets of Manhattan, counterposing up-scale parties with wait staff slaving for tips. It’s a savvy piece of emotional manipulation designed to guilt the young rich into acknowledging the class structure that, above all else, got them to where they are. In one party scene, the hubris is intoxicating as a tipsy Ivy League cohort prepares, like their parents, to ascend to the heights of commerce, industry and influence.

Of course, this constructed ‘choice’ transcends the personal, reading as an obvious allegory for the nation as a whole. If the American working class has nothing to lose but their chains, Lapham clearly hopes a new generation will hand them the bolt cutters — a naive appeal to altruism perhaps, but one that continues to resonate as the economy tanks. Lapham’s choice is now more pressing, in that conditions have got much worse, and much easier in that elite opinion is again extolling the virtues of public service, always a potent (if submerged) strain of America’s DNA.

Two recent events have confused Lapham’s dichotomy — namely, the collapse of the Wall St investment banks that once promised grads an inside track to power and influence (in the doco, Jack must choose between the now-flailing Goldman Sachs and life as a writer) and the election of the Obama Administration. But perhaps the more important wildcard is the ‘West Wing effect’ where Jeb Bartlett’s passion for public policy collides with the burgeoning mythology around President Obama’s inner circle.

Consider the media frenzy over the past week surrounding the inauguration speech allegedly penned by 27-year old staffer John Favreau, the pain felt by Facebook-addicted staffers held hostage by outdated email-free PCs and the plight of press secretaries confronted by electronic doors — the touchy-feely anecdotes could fill a whole Blackberry. Which of Lapham’s formerly Goldman-bound Yalies could now resist taking the social policy reigns under a svelte 47-year old with a penchant for pickup games of two-on-two?

Add this to calls for a ‘new Keynesianism‘, big government and demands for massive tax hikes and a seachange seems unavoidable. Four years after Lapham’s intervention, the US is witnessing a wholesale rejection of the Patrick Bateman era, demanding personal commitments more in tune with the darkening reality of everyday life. For a nation on its knees, self sacrifice has again become sexy.

But perhaps a more difficult question is whether this new public-spiritedness is pointed in the right direction. The levers of government may be so corroded, and the policy making options of earlier eras so passé as to render the renewed enthusiasm null and void.

For a period in the late 90s and early 00s, progressive forces were searching for new modes of public engagement in the tacit recognition that national governments were no longer able to provide the kind of policy guidance beloved by post-WWII welfare states. In the best examples, domestic social movements crafted global networks that went beyond defensive postures towards what Alain Touraine calls “conflictive participation in the global economy”. Those networks have now become clogged as domestic ‘solutions’ again become fashionable.

What remains of welfarism after its trashing under Bush is still tilted away from the genuinely excluded (think The Wire) towards an illusory middle class receding irretrievably from view. US labor unions are mostly a defensive bulwark against the vagaries of global competition and not an assertive force for social change. Obama’s multi-billion dollar car industry bailout will benefit, first and foremost, Hillary’s white workers and not the forgotten of Detroit’s slums. The multitude of stimulus and bailout packages are an attempt to revive a failed settlement between capital and labour that passed its used-by-date decades ago.

The alternative for the legions of Obama fans is to take a good look at the fluidity that has re-made American society and fashion a conflictive social movement that engages directly with issues of cultural diversity and economic fragmentation. For their part, policy wonks should be looking less at off-the-shelf responses and instead at regulations that protect and extend cultural and economic autonomy — the contours of which will inevitably emerge, with or without the input of a new band of Ivy League do-gooders.

As a discussion starter, there’s a wealth of interesting commentary at Open Democracy. Paul Rogers looks at the current situation and how it’s developing, and traces the US’ involvement over the last decade or so with Israeli state policy and the IDF. In another piece, Rogers tries to find some hope amidst the ruins. Vera Gowlland-Debbas examines the role of international law in the conflict, and asks whether the “Responsibility to Protect” doctrine is being shown to be mere rhetoric. Daniele Archibugi reviews the role of domestic politics in Israeli decision making. And, finally, Avi Shlaim places the current events within a historical context.

Update: A new post on the ethics of the conflict.

Update: New post here.

One of the many things that makes the Israeli/Palestinian conflict so utterly dispiriting is that it’s impossible to think of anything good coming of any of this. Worse than that, it’s hard to imagine that even the people involved think anything good will come of it.

What, exactly, do the Palestinians lobbing rockets into Sderot think they will accomplish? That the Israelis will look about them and say: Holy Moly, I had no idea this place was so dangerous!, and leave? Do the Israelis think: even though we’ve bombed the Palestinians a whole lot, and it’s never done much good before, maybe this time it will be different! Maybe Hamas will say: heavens, this is a pretty serious round of attacks; maybe we should just sue for peace — ? Or what?

Any form of peaceful resolution to the conflicts in Palestine and Israel has been blocked for a long time by a range of factors – including but not limited to internal Israeli politics and the decomposition of its party system, the legacy of past atrocities, an effective economic blockade of Palestine, the power balance in the Middle East and the hypocritical and empty promises of the Bush administration. If there is a “peace process”, its outlines were frozen in time long ago. Unfortunately, I think it’s probably too much to hope for that there’ll be any sort of progress under the Obama administration, particularly with Hillary Clinton as Secretary of State.

Elsewhere: An interesting book review post from SocProf on violence around the world, and how it’s viewed according to essentially domestic priorities:

Virgil Hawkins’s Stealth Conflicts – How The World’s Worst Violence is Ignored is a necessary book that dispels quite a few myths regarding the current world’s conflicts.

While the world is currently focused on the collective punishment Israel is inflicting on the Gaza strip, and as 2008 draws to an end, there is not much mention that we are entering the 11th year of the conflict in the DRC, a conflict, that ,as of January 2008, had caused the death of 5.4 million people, mostly of disease and starvation. This is currently the deadliest conflict in the world, and there is not much of a fuss about it, not about many African conflicts either (with the exception of Sudan, and that came eight years into the conflict).

Read on here.

Elsewhere: Jeff Sparrow at Overland. I think this post is a useful corrective to “official narratives” of what’s occurring, but still needs insertion into a broader analysis of the entire dynamic, of the sort I’ve been arguing we need.

Update: The latest news via Firedoglake:

Overnight, the BBC is reporting that Israel has declared the region around Gaza “a closed military zone” which is seen as sign that a ground invasion is about to begin (no link available yet). The Gaza death toll (at 1:25 PST) is 307, there are unconfirmed reports that kidnapped Israeli soldier Shalit was amongst those wounded by the Israeli attack on Gaza, and the Israeli Navy has now joined the attack.

Update: The comments thread continues on this post.