Socialism for the rich

by hamilcarr 2 Replies latest social current

  • hamilcarr

    Dr Dooms view on the current crisis in laissez faire capitalism.

    Public losses for private gain

    The effective nationalisation of huge sectors of the economy means US taxpayers are picking up the tab for failing banks

    All comments ( 59 )

    With the nationalisation of Fannie and Freddie, comrades Bush, Paulson and Bernanke started transforming the US into the USSRA (United Socialist State Republic of America).

    This transformation of the US into a country where there is socialism for the rich, the well-connected and Wall Street (ie, where profits are privatised and losses are socialised) continues today with the nationalisation of AIG.

    This latest action on AIG follows a variety of many other policy actions that imply a massive – and often flawed – government intervention in the financial markets and the economy: the bail-out of the Bear Stearns creditors; the bail-out of Fannie and Freddie; the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk, toxic, illiquid private securities); the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of "liquidity" to distressed, illiquid and insolvent mortgage lenders; the use of the SEC to manipulate the stock market (through restrictions on short sales).

    Then there's the use of the US Treasury to manipulate the mortgage market, the creation of a whole host of new bail-out facilities to prop and rescue banks and, for the first time since the Great Depression, to bail out non-bank financial institutions.

    This is the biggest and most socialist government intervention in economic affairs since the formation of the Soviet Union and Communist China. So foreign investors are now welcome to the USSRA (the United Socialist State Republic of America) where they can earn fat spreads relative to Treasuries on agency debt and never face any credit risks (not even the subordinated debt-holders who made a fortune yesterday as those claims were also made whole).

    Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or found to be perverts, these Bush hypocrites who spewed for years the glory of unfettered Wild West laissez-faire jungle capitalism allowed the biggest debt bubble ever to fester without any control, and have caused the biggest financial crisis since the Great Depression.

    They are are now forced to perform the biggest government intervention and nationalisations in the recent history of humanity, all for the benefit of the rich and the well connected. So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA.

    Zealots of any religion are always pests that cause havoc with their inflexible fanaticism – but they usually don't run the biggest economy in the world. These laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades.

    This article first appeared on Nouriel Roubini's blog and is edited and cross-posted here with the permission of the author. Nicknamed "Dr Doom", Professor Roubini is now widely acknowledged as having accurately predicted the present crises in financial markets.

  • sammielee24

    I quite enjoy his blog and his interviews.

    There is no such thing as a libertarian or a true capitalist, free market Republican when the going gets tough. They all revert to socialist methods in order to save their own skin despite how much they beat their chests bragging about their 'each man for himself' mandate. They all bemoan and berate, ridicule and judge, all those poor underlings who heaven forbid use the social programs available to them like health insurance or food stamps or welfare but when their investments are lost and they are bankrupt financially or about to be, they aren't lined up at the door demanding a stop to the socialist moves that are saving their wealth.

    The country leaders and media goons who tell the American people on a daily basis that privatization, deregulation, free market capitalism is what makes America great is nothng more than a mantra said loud enough and long enough for the American people to buy into it. That way, when Joe Blow with the small business goes belly up and shuts down, he's told 'gee, that's what the free market is all about'..pull yourself up by the boot straps and soldier on. That's what Americans do. Problem is that the guy at the top is telling you that so he doesn't have to bail you out - in his case, when he is in trouble it's different - Joe Blow who didn't have anyone to bail him out is now bailing out the guy who could have bought and sold him a million times over.

    How the people have been fooled. sammieswife.

  • abbagail

    Amen, the cards are stacked and have been for a LONG time, and the guys with all the gold win.

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