ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Refusing to Face the Facts

The Obama administration's initial proposals to cure the ills of the United States' banks are deeply flawed.

EDITORIALSmarch 14, 2009 vol xliv no 11 EPW Economic & Political Weekly6Amorphous AllianceThe third front may spoil the chances of the two main coalitions, but does it offer anything more?Twelve years after the fall of the United Front government, which was a coalition of regional parties (the Communist Party of India being the only national party in that gov-ernment), a similar conglomeration of regional and left parties has forged a non-Congress, non-Bharatiya Janata Party (BJP) pre-electoral seat sharing arrangement before the 15th Lok Sabha elections. Broadly termed the “third front”, the binding factor of the parties in this amorphous alliance is their anti-Congress and anti-BJP stance. While the left constituents have a definite alternative socio-economic and foreign policy agenda, the other parties in the alliance do not share any common agenda but are, because of local political equations, part of the coalition only since they stand opposed to the two larger national parties. The Bahujan Samaj Party (BSP) – the party of dalit leadership – has been non-committal about its relationship with the third front. The Left Front – primarily restricted to its strongholds of Kerala, West Bengal and Tripura – has exercised an important role in the centre in the recent past, punching above its stated weight of 60 seats in the Lok Sabha by utilising the expedient circumstances that made the United Progressive Alliance (UPA) dependent on it for survival in the first four years of government. Effectively, the left as a cohesive ideological force is fighting winnable battles only in West Bengal and Tripura as the Left Front, in Kerala as the Left Democratic Front and in Bihar as part of the newly constituted and promising United Left Bloc, which includestheCommunist Party of India (Marxist-Leninist)-Lib-eration.InKerala, factionalism has severely dented the image of the main left party, the Communist Party of India (Marxist), while in West Bengal, a series of administrative disasters and misguided economic policies have seen an erosion of support evenamongitstraditional rural base. The left therefore hopes to shore up its parliamentary strength by stitching up electoral alli-ances with parties such as the Telugu Desam Party (TDP) and othersinAndhra Pradesh and the All-India Anna Dravida Munnetra Kazhagam (AIADMK) in Tamil Nadu, where the two main communist parties are relevant as a political force. While the regional parties are now formally opposed to the Congress-ledUPA and the BJP-led National Democratic Alliance (NDA), there remains the question whether post-elections, these regional groups will maintain the same position. Most parties, such as theTDP, the AIADMK and the Janata Dal (Secular) have in the near past been either part of theNDA or have found it convenient at times to ally with theBJP. Their electoral strategy now is governed by the fact that any alliance before elections with theBJP would fetch them negative returns and some of them are in direct opposition to the Congress or other parties in theUPA in their respective states. It is this very reason that has seen the Biju Janata Dal coming out of a 11-year alliance with theBJP and considering the option of joining the third front. And the BSP’s non-committal attitude is evidence that it is keeping options open after the elections.Programmatically, there is little that is different between these parties and the Congress and the BJP, though they have articu-lated a regional nationalism and a circulation of elites that has seen greater federalisation and decentralisation of power from the all-powerful centre. Structurally, these single leader-driven parties are also very similar to the Congress. As currently constituted, the third front is a major electoral impediment for both theUPA and the NDA, and also for the Congress and theBJP as individual parties – neither will be able to win enough seats so as to dominate a future coalition govern-ment. On the other hand, the third front is unlikely to be able to come anywhere near forming a government at the centre. Nevertheless, even if the 2009 third front experiment does end by an extraordinary set of circumstances in the formation of a non-Congress,non-BJP government, it would be far-fetched to expect such a government to base its programmes on a sub-stantial alternative. The short-lived United Front government of the mid-1990s made a few noises and moves towards greater fed-eral transfer of power but offered no real change from theneolib-eral trajectory of the previous Congress government. It wasaf-ter all under the United Front government that P Chidambaram presented the so-called “dream budget” that contributed so much to a further widening of inequalities. Indeed, the flux in the polity today is likely to continue after the parliamentary elections and many of the current members of the third front may well change their antagonistic pre-electoral positions vis-a-vis either the Congress or the BJP if so required to construct fresh alliances to form a government. In that sense, the amorphousness of the third front precludes the possibility of a strong third pole, distinguished and separate from the UPA and theNDA in India’s national polity. Unless, of course, the alter-native is constructed programmatically and nationally gathers critical support for its agenda. needed which will take over the entire portfolio of sub-prime mortgage loans and align the amortisation and interest pay-ments the debtors have to incur with their present and future capacity to pay. In addition, there seems to be no other viable alternative than to place the insolvent and near-bankrupt banks inreceivership (in plain language, nationalising them), replacing incumbent management, insuring all their deposits, thoroughly auditing them, inspecting the loans and working in close co-operation with the HOLC, putting in place a depression-era, Reconstruction Finance Corporation – a public bank to get ordinary lending going – and so on. And then, institutionalising a new financial regulatory system.

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