HOW PAULSON BECAME THE NEW FACE OF CAPITALISM

It was a message he never expected to deliver. Henry Paulson—free-market thinker, former CEO of Goldman Sachs and Treasury secretary to a conservative Republican president—was unveiling to the world a massive taxpayer bailout of the American financial system. Afterward, as he headed into yet another weekend of nonstop work with his team, carrying the weight of the troubled markets on his shoulders, the former college-football star was clearly conflicted about what he’d just proposed. “It’s very unpleasant for me, but it’s a lot more attractive than the alternative,” Paulson told NEWSWEEK. “We can spend a lot of time talking about how it happened and how we got here. But we have to get through the night first.”

Let us hope the old saw, about the night being darkest before the dawn, is true. Recent weeks certainly have been the darkest Wall Street has seen since October 1929. Investment banks that had survived the Great Depression, the crash of 1987 and the trauma of 9/11—venerable names like Lehman Brothers and Merrill Lynch—fell by the wayside. They were just the latest victims in the subprime-mortgage and credit debacle that has taken down banks and lenders across the country, and yanked the dream of homeownership away from millions of Americans. For the past several months, the government’s solution to the problem has been to make a series of Solomonic decrees about who would live and who would die. Investment bank Bear Stearns? “Too big to fail,” the government decreed, arranging a sale of the firm to JPMorgan Chase. Lehman Brothers? It must be sacrificed and file for bankruptcy. Overextended homeowners? Try renting. The nation’s largest mortgage companies, Fannie Mae and Freddie Mac? Bail them out and let taxpayers foot the bill. AIG, the world’s largest insurer? Uncle Sam owns it now.

Wielding much of this power over financial life and death is this tall, calm man. Paulson came to Washington from Wall Street in 2006 expecting to deal with issues like Social Security reform and trade agreements. But the economy had other ideas. At a time when President Bush seems to have largely checked out, the teetotaling 62-year-old has emerged as the nation’s most powerful leader—the investment banker in chief. As he did on the Street, Paulson continues to advise CEOs on the best course of action, to arrange financing and to get the best terms possible for his clients. Only now his clients are American taxpayers, the president and the global financial system.

With the help of his counterparts at the Federal Reserve and the Securities and Exchange Commission, Ben Bernanke and Christopher Cox, Paulson has succeeded in fundamentally altering the relationship between Wall Street and Washington—almost to the point where D.C. is now the world’s financial capital. “There’s no doubt that he’s in charge,” says Roy Smith, a former partner with Paulson at Goldman and a professor at New York University. An indifferent orator—Paulson hunches his 6-foot-2 frame over lecterns and has a halting speaking style—the Eagle Scout has emerged as the pre-eminent market whisperer and cajoler of the American financial system. And yet Paulson has rankled some in Washington by conducting business like a Wall Street Master of the Universe: the marathon late nights and weekend meetings with a small group of people, followed by an unveiling of the result as a fait accompli.

“For Bear Stearns and AIG, members of Congress were simply informed that these were decisions made by the Bush administration, specifically Secretary Paulson and Chairman Bernanke,” says Barney Frank, chairman of the House Financial Services Committee. “I can’t tell you what they were thinking.” Paulson and Bernanke make an unlikely duo—the relentlessly forward-looking Christian Scientist investment banker from the suburbs of Chicago and the more placid history-minded Jewish economist from South Carolina. New York Federal Reserve president Tim Geithner has also been a key player.

The prospect of unelected officials putting massive amounts of taxpayer resources to work without transparency or approval from Congress, and without a clear process at work, is indeed troubling. In addition, the constant improvisation by Washington financial officials may be sending mixed messages. “There hasn’t been a consistent pattern,” New Jersey Gov. Jon Corzine tells NEWSWEEK. “We save Bear Stearns but not Lehman. The market is going to have a hard time sorting through what the underlying principle is.” (Corzine served with, and clashed with, Paulson when they were senior executives at Goldman in the 1990s.)

The Democratic strategist James Carville once said that he wanted to come back to life as the bond market, because it exerted such power over Washington policy. And for the past many years, Wall Street has been the tail that wagged the Washington policy dogderegulation, tax cuts on capital gains and dividends. No longer. Now Washington is dictating terms to Wall Street. And Americans will be dealing with the consequences of that for years to come.

How did we get here? And who is this guy who has become, almost by default, the face of American capitalism?

In many ways, Paulson was the ideal person to deal with this mess. A 32-year veteran of Goldman, he helped take the venerable (and venerated) company public and served as CEO from 1998 to 2006, an era in which the firm prospered. Goldman enjoys legendary status in New York, the elite among the elite. In the new book “The Partnership: The Making of Goldman Sachs,” Charles Ellis describes Goldman as a company with “such strengths that it operates with almost no external constraints in virtually any financial market it chooses.” Paulson, who excelled in the classroom (Phi Beta Kappa) and on the gridiron at Dartmouth (All-Ivy offensive lineman), worked in the Nixon White House as liaison to Treasury and Commerce before pursuing an M.B.A. at Harvard and joining the Chicago office of Goldman in 1974.

He became a partner in 1982 and helped build the firm’s Asian investment-banking business, making more than 75 trips to China. “Paulson was seldom thought of as a pal, a charmer, or particularly charismatic,” Ellis writes. But he was noted for self-discipline, focus on controlling risk and mastery of detail. He rose to Goldman’s leadership ranks in 1994 when the firm was in the midst of a major crisis, says Lisa Endlich, a former employee of the bank and author of “Goldman Sachs: The Culture of Success.” Nearly one third of the partners were leaving after the company had suffered significant trading losses. As senior executives made the case as to why partners should stay, Paulson focused on the nuts and bolts. “He described the minutiae of how they were going to cut costs and make money the next year,” says Endlich. In 1999, Paulson and a few other partners pushed out Corzine.

Paulson adheres tightly to the Goldman ethos: Make enormous amounts of money but don’t act like it (though Paulson’s stake in the firm was worth about $500 million when he cashed out in 2006, he wears a digital training watch, not a Rolex). Get involved in civic causes (he served for two years as chairman of the Nature Conservancy, and his cavernous corner office on the third floor of the Treasury Building is filled with photos of birds taken by his wife of 39 years, Wendy). And embrace the role of corporate statesman (in 2002, in the wake of corporate scandals, he gave a speech at the National Press Club calling for an improvement in corporate ethics).

Paulson had always been a Republican—but more a Rockefeller Republican than a DeLay one. Goldman Sachs was no place for ideologues or hyperpartisans—its ranks have been filled over the years with both Democrats (Corzine and former Treasury secretary Robert Rubin) and Republicans (White House chief of staff Josh Bolten) who went on to become public servants. It was Bolten who recruited Paulson to succeed John Snow as Treasury secretary in the spring of 2006. At first Paulson demurred. The ultimate realist, he doubted whether anything significant could be accomplished in the last two years of the Bush presidency. But Bolten made the case that there were other ways to contribute beyond the legislative agenda. And after Paulson and Bush met in the president’s study and talked for more than an hour, he agreed. With their children grown—their son, Merritt, owns minor-league sports teams in Portland, Ore., and their daughter, Amanda, is a reporter for The Christian Science Monitor—Henry and Wendy Paulson settled into a house in Washington.

Paulson instantly became the leader of Bush’s economic team. He had a very distinct idea of what the job would be—”the top policymaker in the administration, the chief economic adviser to the president and the top economic communicator,” says Tony Fratto, the White House deputy press secretary who worked at Treasury during the early portion of Paulson’s tenure. But the possibility that Paulson would make his mark seemed to evaporate when the Democrats assumed control of Congress a few months after his arrival. The new Treasury secretary had greater concerns than regime change on Capitol Hill, though. In his first official meeting with Bush at Camp David in July 2006, Paulson told the president it would be surprising if the United States made it through January 2009 without some disturbances. “We have these periods every 6, 8, 10 years, and there are plenty of excesses,” Paulson recalls telling Bush. He just didn’t know what those disturbances would be.

The problem became clearer as the housing bubble burst in mid-2006; borrowers started defaulting on mortgages and lenders began going belly up. The mortgages had been packaged into exotic securities, sliced and diced and sold as bonds and purchased by investment banks and hedge funds. Because lenders, executives and traders had convinced themselves that home prices would never fall, anything went. The result was debt layered on debt, piled on top of debt, supported by small amounts of cash. And so as Americans in increasing numbers defaulted on their mortgages in 2007 and 2008, it kicked off a domino effect. The value of the mortgage-backed bonds fell, as did that of the financial instruments based on those bonds. Banks were forced to write down the value of their holdings and raise new cash from foreign sovereign-wealth funds—only to report fresh losses as the housing market weakened. This past spring, the chain connecting underwater subprime borrowers to New York investment banks and Fannie Mae and Freddie Mac—the Washington-based quasi-governmental firms that together guarantee or insure $5.4 trillion in mortgages—grew increasingly taut.

The government response to the housing mess took two main forms. The Federal Reserve slashed interest rates repeatedly, hoping to make life easier for borrowers and lenders. And under Paulson’s direction, the Treasury Department put together the Hope Now coalition, an industry-led group that would modify mortgages before foreclosure. But by the time such efforts got started, too many dominoes had fallen.

In March, when Bear Stearns, the perennially troubled teen of Wall Street, got in too deep, Paulson hammered out a deal for JPMorgan Chase to access credit from the Federal Reserve to buy the investment bank at a bargain-basement price of $2 per share (later revised upward to $10 a share), because he didn’t want to make it seem as if public shareholders were being bailed out. Paulson knew the plan flew in the face of the free-market philosophy to which he, and all his colleagues on Wall Street, clung so fiercely. But this was a special case. When commercial banks failed, a tried-and-tested procedure kicked in: the Federal Deposit Insurance Corp. took charge and made insured depositors whole. But there was no existing protocol or regulatory framework to deal with the failure of an investment bank. And because of its massive levels of debt and significance in the markets for credit-default swaps—a sort of insurance policy against investment losses—Bear Stearns had the capacity to harm hundreds of financial institutions. “The Federal Reserve believed—and I supported them—that it was the right thing to come in and intervene,” Paulson tells NEWSWEEK.

The downfall of Bear Stearns sent Paulson and his colleagues into crisis mode—a mode they have yet to exit. For Paulson and his team at the Treasury Department, the summer was a string of ruined weekends. In July, Congress gave him authority to come to the aid of Fannie Mae and Freddie Mac. “If you’ve got a bazooka, and people know you’ve got it, you may not have to take it out,” Paulson said. (Translation: if the market knew the companies had a federal backstop, investors would be more likely to give them more time to work out their troubles.) Paulson was forced to use the bazooka sooner rather than later. By the end of August, the weakened financial state of the two giants was threatening both domestic mortgage markets and the value of hundreds of billions of dollars’ worth of bonds they had issued that were owned by central banks around the world.On the morning of Sunday, Sept. 7, the government essentially nationalized Fannie Mae and Freddie Mac, agreeing to backstop their debt and provide new capital.

Given the unique nature of this financial crisis, Paulson—who spent his entire private-sector career at Goldman—has been a better fit for this job than his predecessors in the Bush administration. Snow ran a railroad company, and Paul O’Neill headed the aluminum producer Alcoa. Paulson, as Bolten notes, has the credibility and the respect of the markets, as well as power and authority. As a result, he has operated with considerable autonomy. “President Bush has delegated a great deal to me, and it’s an awesome responsibility,” Paulson says. “He’s very supportive.” The two Harvard M.B.A.s have spoken at least once daily for the past several weeks, in addition to having regular meetings. One reason Treasury has emerged as the leader in this crisis, more than the Federal Reserve, is that the problems in the main aren’t in the banks that are part of the Federal Reserve system. They are in the unregulated Wall Street investment banks, which are Paulson’s turf.

The key skill of an investment banker is understanding the thinking, motivations and fears of the person on the other side of the table. And Paulson has had to put all his skills to the test. Over the second weekend in September, when Lehman Brothers came seeking the kind of help that the government had given Bear Stearns, Paulson was conflicted about what to do. He was reluctant to set a new precedent and encourage what’s referred to in the world of economics as “moral hazard”—the notion that the existence of a backstop would encourage further reckless behavior. Paulson essentially told Lehman CEO Richard Fuld, whom he knew from his days on Wall Street, that the bank needed to find a buyer in the wake of new losses. But Fuld dithered. And although Lehman was in bad shape, unlike Bear Stearns it didn’t threaten to bring down the whole system. “I never once considered that it was appropriate to put taxpayer money on the line in resolving Lehman Brothers,” Paulson said at a press conference in Washington. His refusal essentially forced Lehman into a bankruptcy filing and spurred Merrill Lynch to seek a deal with Bank of America. At Lehman, workers set up photos of Fuld and Paulson and stuck pins through their eyes.

Asked at that press conference if the public should interpret the refusal to help Lehman as an end to assistance for the financial sector, Paulson was cagey. He said he had to worry first and foremost about the “stability and orderliness of our financial system.” He went on to prove his flexibility less than 24 hours later, with AIG. The gigantic insurer, which is a component of the Dow Jones industrial average, had several healthy units in its core business. But its AIG Financial Products unit, which had sold large volumes of credit-default swaps on subprime mortgages, was deep underwater. Were it to fail, AIG would pose the same systemic risk to the financial system that Bear Stearns had. Paulson informed congressional leaders that the government was coming to AIG’s rescue. Using the Fannie/Freddie rescue as a template, he hammered out an aggressive deal. He installed a new CEO and extended $85 billion in credit—at a high interest rate—in exchange for an 80 percent stake in the company.

But given the uncertainty about who might fail next, the markets continued to panic. Investors turned against the only healthy players left on Wall Street, Morgan Stanley and Goldman Sachs, pummeling their stocks and threatening to force them into mergers with other firms. Banks began to lose confidence in one another, cutting off the flow of capital. Concerns arose even about money-market accounts, long considered among the safest of investments. Paulson again took out the bazooka: he and Bernanke crafted their plan to create a taxpayer-backed entity that would acquire mortgage-backed bonds from banks, and requested $700 billion from Congress to do so. Treasury also temporarily extended insurance to money-market funds. By the end of last week the stock markets were soaring.

While bailouts are regrettable and expensive, Paulson argues that one is needed to restore confidence in the system. “We’re going to have housing issues and mortgage issues for years,” he tells NEWSWEEK. “The key is to get stability.” But unlike other recent actions, this one will require greater cooperation from Congress. And there Paulson is likely to run into some roadblocks.

Paulson works at a pace to which Washington isn’t quite accustomed. All month the staff dining room at Treasury has remained open on weekends, with a buffet of tuna-fish and peanut-butter sandwiches. Paulson doesn’t use e-mail and prefers to get information by phone. Staffers refer to him as a “serial dialer.” But he doesn’t spend a lot of time making small talk. “He’s a no-bulls––t kind of guy,” says Barney Frank. “He gets down to business and gets things done.”

This brusqueness, and the desire to move on to the next problem, doesn’t always go over well on Capitol Hill. The criticism of Paulson has come mostly from conservative Republicans in the House who are incensed over the bailouts. “I think for all intents and purposes, Congress has been left out of the loop and treated after the fact,” says Rep. Scott Garrett, a New Jersey Republican. Having already acquiesced to the creation of hundreds of billions of dollars in potential taxpayer obligations, Congress isn’t likely to just hand over hundreds of billions more without demanding some concessions like assistance for strapped homeowners.

The decisions made on the fly these past several months will have impacts that last deep into the next administration, long after the end of Paulson’s tenure—perhaps one of the most eventful of any Treasury secretary since Alexander Hamilton. To add to his burden, Paulson has been tasked with briefing Sens. John McCain and Barack Obama on the situation. Late last Thursday evening, as Obama was about to fly from New Mexico to Florida, he held his plane on the tarmac for 10 minutes to hear the latest from Paulson, just one of many recent conversations. McCain and Paulson have also spoken on several occasions.

The Treasury secretary, who repeatedly describes the bailouts as “unpleasant” but necessary, knows that the United States will now be the international butt of jokes for nationalizing huge chunks of its once vaunted financial system. But as the Wall Street saying goes, it is what it is. At the end of the Street’s craziest week in recent memory, Paulson was still working the phones and facing another ruined weekend, in which he and congressional leaders would iron out the details of the bailout plan. “Like every other weekend, we’ll just be working hard doing what we need to do,” Paulson said. For all our sakes, let’s hope there won’t be many more marathon weekends in the months ahead.

How Corporations Destroyed American Democracy – Chris Hedges.

How Corporations Destroyed American Democracy – Chris Hedges.
Filmed at Socialism 2010 in Chicago by Paul Hubbard

Stephen Schwarzman on The David Rubenstein Show:

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Nov.14 — Blackstone Group Inc. Chairman and Chief Executive Officer Stephen Schwarzman talks about starting the firm, surviving the real estate crash of 2007, and being rejected from Harvard. Schwarzman appears on “The David Rubenstein Show: Peer-to-Peer Conversations.” The show was recorded on Sept. 4 in New York.
18:15
it worked out and alchemy you did the
18:18
IPO and Chinese invested and then after
18:21
you did the IPO let me mention two deals
18:24
that you did one was the biggest real
18:26
estate deal in history GOP real estate
18:29
company built by Sam Zell and you did a
18:32
40 billion dollar buyout in effect is
18:34
that right yeah it’s 39 actually okay
18:36
all right thirty nine billion dollars it
18:39
was a bidding war you won the bidding
18:41
war but the real estate market crumbled
18:43
right after the deal was done so how did
18:44
you survive with that deal well we
18:47
worried
18:47
because the same reason we were going
18:49
public I sense we were a market top for
real estate so so just buying 39 billion
dollars of real estate III thought was
dangerous because you had to pay a
pretty good price to get it because it
was competitive so as as soon as we
decided we were going to actually raise
our price enough to be the winner there
were two or three of us sitting around
saying this deal is potentially
dangerous we’ve got to reduce the
leverage and we’ve got to take advantage
of the crazy prices
that people are paying so we’ve decided
to sell half of what we bought the same
day we bought it so when I told people
that they just sort of looked at me and
and said the same day I said I don’t
want to take any risk that the world’s
gonna change and we’re gonna be stuck
with all of this so we basically had
every conference room at the firm active
one buying but then we broke it up into
all these pieces but if you hadn’t done
you would have lost all your money I
think that’s probably a market cratered
virtually the next day right because
most of the people who bought from us
basically got into enormous financial
trouble or went insolvent and and so
after we did that and closed everybody
went home
they’d been sleepless three days later
they came back and we said let’s sell
half of what we got left now and be even
more conservative so everybody went back
to work
and we ended up with one quarter of what
we bought very conservatively priced so
we could survive any kind of nuclear
winter we ended up making three times
our money buying right this this giant
thing at the top and and
there’s never been more than ten billion
dollars bought or sold by a group we did
70 billion so you wants to blot another
company before the recession really hit
that was caught Hilton and that was a
leveraged buyout and some people might
21:17
say at the top of the market and that
21:19
deal went down in terms of the debt and
21:22
maybe the equity but then you openly did
21:24
things that made it the most profitable
21:26
buyout in the history of buyouts what
21:28
did what did you do well that was pretty
21:29
easy actually looked hard but you know
21:34
Hilton had not been integrated they were
21:36
running for different headquarters and
21:38
there was a huge modernization and and
21:42
and and cost takeout Oklahoma you sold
21:45
it up about a fourteen billion dollar
21:47
profit yes well if we had held it it
21:49
would have been held it longer it would
21:51
have been over 20 so so it was a good
21:54
day
21:54
cuz nice forty nine billion in recent
21:57
years you’ve become one of the nation’s
21:58
biggest philanthropists you gave three
22:00
hundred and fifty million dollars to MIT
22:03
for a computing Center and related to
22:05
artificial intelligence you never went
22:07
to MIT you had no connection there how
22:08
did that come about well that was that
22:10
was really fascinating i I’m not a
22:12
technologist I had met the president of
22:16
MIT Rafael Reif and we started talking
22:19
and you know I we were concerned that
22:23
the u.s. was just not investing enough
22:25
in these technologies and I said do you
22:28
have any interesting ideas so he came
22:33
back with a let’s double the computer
22:36
science faculty let’s take our it’s
22:39
established a new department in effect a
22:42
new school called it a college which is
22:46
now gonna be the MIT schwartzman College
22:48
of Computing and let’s connect AI to all
22:52
the other departments at MIT so MIT will
22:57
become the first AI enabled university
23:00
in the world and I said now that’s a
23:03
vision I could buy in on final question
23:06
I’d like to ask you it just deals with
23:08
this if somebody is watching or reading
23:10
your book
23:11
and they want to be a leader a leader in
23:13
business or philanthropy or or in
23:16
government what do you think is the key
23:17
quality to be a leader and what have you
23:19
seen as their key quality enable you to
23:21
be a leader I I think to be a leader you
23:23
have to be a really good listener you
23:27
have to understand what’s going on
23:29
around you you you have to be measured
23:33
and and you have to realize that
23:36
everything you do is amplified in the
23:41
minds of the people who are listening to
23:42
you so so care nuance kindness but
23:49
defining a culture it’s what a leader
23:53
does Steve thanks very much for this
23:56
time I appreciate it thanks David

The End of Neoliberalism and the Rebirth of History

For 40 years, elites in rich and poor countries alike promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. Now that the evidence is in, is it any wonder that trust in elites and confidence in democracy have plummeted?

NEW YORK – At the end of the Cold War, political scientist Francis Fukuyama wrote a celebrated essay called “The End of History?” Communism’s collapse, he argued, would clear the last obstacle separating the entire world from its destiny of liberal democracy and market economies. Many people agreed.

Today, as we face a retreat from the rules-based, liberal global order, with autocratic rulers and demagogues leading countries that contain well over half the world’s population, Fukuyama’s idea seems quaint and naive. But it reinforced the neoliberal economic doctrine that has prevailed for the last 40 years.

The credibility of neoliberalism’s faith in unfettered markets as the surest road to shared prosperity is on life-support these days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation. Neoliberalism has undermined democracy for 40 years.

The form of globalization prescribed by neoliberalism left individuals and entire societies unable to control an important part of their own destiny, as Dani Rodrik of Harvard University has explained so clearly, and as I argue in my recent books Globalization and Its Discontents Revisited and People, Power, and Profits. The effects of capital-market liberalization were particularly odious: If a leading presidential candidate in an emerging market lost favor with Wall Street, the banks would pull their money out of the country. Voters then faced a stark choice: Give in to Wall Street or face a severe financial crisis. It was as if Wall Street had more political power than the country’s citizens.

Even in rich countries, ordinary citizens were told, “You can’t pursue the policies you want” – whether adequate social protection, decent wages, progressive taxation, or a well-regulated financial system – “because the country will lose competitiveness, jobs will disappear, and you will suffer.”

In rich and poor countries alike, elites promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. To get there, though, workers would have to accept lower wages, and all citizens would have to accept cutbacks in important government programs.

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The elites claimed that their promises were based on scientific economic models and “evidence-based research.” Well, after 40 years, the numbers are in: growth has slowed, and the fruits of that growth went overwhelmingly to a very few at the top. As wages stagnated and the stock market soared, income and wealth flowed up, rather than trickling down.

How can wage restraint – to attain or maintain competitiveness – and reduced government programs possibly add up to higher standards of living? Ordinary citizens felt like they had been sold a bill of goods. They were right to feel conned.

We are now experiencing the political consequences of this grand deception: distrust of the elites, of the economic “science” on which neoliberalism was based, and of the money-corrupted political system that made it all possible.

The reality is that, despite its name, the era of neoliberalism was far from liberal. It imposed an intellectual orthodoxy whose guardians were utterly intolerant of dissent. Economists with heterodox views were treated as heretics to be shunned, or at best shunted off to a few isolated institutions. Neoliberalism bore little resemblance to the “open society” that Karl Popper had advocated. As George Soros has emphasized, Popper recognized that our society is a complex, ever-evolving system in which the more we learn, the more our knowledge changes the behavior of the system.

Nowhere was this intolerance greater than in macroeconomics, where the prevailing models ruled out the possibility of a crisis like the one we experienced in 2008. When the impossible happened, it was treated as if it were a 500-year flood – a freak occurrence that no model could have predicted. Even today, advocates of these theories refuse to accept that their belief in self-regulating markets and their dismissal of externalities as either nonexistent or unimportant led to the deregulation that was pivotal in fueling the crisis. The theory continues to survive, with Ptolemaic attempts to make it fit the facts, which attests to the reality that bad ideas, once established, often have a slow death.

If the 2008 financial crisis failed to make us realize that unfettered markets don’t work, the climate crisis certainly should: neoliberalism will literally bring an end to our civilization. But it is also clear that demagogues who would have us turn our back on science and tolerance will only make matters worse.

The only way forward, the only way to save our planet and our civilization, is a rebirth of history. We must revitalize the Enlightenment and recommit to honoring its values of freedom, respect for knowledge, and democracy.