Neoliberal crisis responses deliberately undermine state fiscal authority

Evidence

Yet I shall argue in chapter 6 there was something new and sinister about the way the “rescue” was prosecuted, so as to prevent any return to older structures. The “level-headed” response turned out to be a shell game, with much of the mechanics of the rescue handed over to private interests, and where so much sovereign debt was being piled on over time that the backstop character of state fiscal authority was undermined; private sector insolvency had infected state solvency. In other words, recurrent banking crises revealed the basic incapacity of the Keynesian state to immobilize and rectify endemic macroeconomic crises, rendering “regulation” a hazy memory. Indeed, by 2012, people were actually forgetting that this was at base a crisis of capitalism, and only derivatively a fiscal crisis of the state. Sovereign debt looked as wobbly as private bank debt. This dynamic was avoidable because it was entirely predictable. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 49

Categorization

• DEEPTHINKING: The observation that recurrent banking crises exposed the Keynesian state’s incapacity — and that the ‘rescue’ itself was designed to preclude return to older structures — is the chapter’s densest mechanism claim, a genuinely paradigm-shifting way to read post-2008 austerity.
• SEED: Angle for an essay on how ‘the rescue was the shell game’ — the bailout machinery as deliberate institutional destruction, not incompetence or necessity.
• XREF: connects to: The Bank of France weaponized debt rollover refusal to force austerity on left governments — Mark Blyth, Austerity: The History of a Dangerous…, 547; The Eurozone crisis was wrongly blamed on sovereign fiscal profligacy — Mark Blyth, Austerity: The History of a Dangerous…, 152; Governments can deliberately leave debt to constrain their successors’ spending — Mark Blyth, Austerity: The History of a Dangerous…, 454 (+6 more)

Broader Connections

• Neoliberalism’s crisis strategy redirected blame from banks onto state debt #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 475
• Neoliberal crisis response expanded rather than shrank state power #contradicts (0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 288
• Crisis lets neoliberal officials arrogate sovereign power to define emergencies #complicates (0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 945
• Neoliberalism seeks to strengthen rather than shrink the state #contradicts (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 2128
• Neoliberalism funds repressive state functions at welfare’s expense #contradicts (0.70)