Friday, September 19, 2008

'The corporate financiers are wrong'

"Would they please shut up about the wonders of an unfettered free market? It's taxpayers who are paying the price for their greed -- again." Full article here.

Now that we're all about to take on hundreds of billions or perhaps a trillion dollars in new public debt to redeem the nation's super-smart corporate financiers, there is one thing I hope we can expect in addition to postponing the apocalypse. Will they all please shut up about the wonders of the unfettered free market and the horrors of big government?

For decades, the investment class and their mouthpieces in the conservative movement have been telling Americans that if only we repealed all those musty old New Deal rules and programs, then we could enjoy unprecedented prosperity. Repeated endlessly by the think tanks, magazines and academics of the right-wing machinery, this message eventually drowned out the reality-based ideas of the American liberal tradition. Although those were the ideas that had actually built this country over the past century, they were erased from public consciousness by a combination of amnesia and propaganda.

We ought to have learned the way the world really works -- that is, how privilege, power, entitlement and greed undermine free markets -- during the teaching moments of the savings and loan debacle, the corporate scandals of George W. Bush's first term [e.g., Enron], or any of a number of smaller crises when taxpayers had to rescue major enterprises that were "too big to fail." Indeed, there has been a similar result -- along with higher unemployment, falling family incomes, rising debt and deficits, and neglected public infrastructure -- every time we have bought into the free-market extremism of the Republican right.

So now is a good time to try to remember the disastrous consequences of ideological rule. Although the same pattern can be traced back to the 19th century, when robber barons and Republicans pillaged the nation, we need go back no further than October 1982. That was when Ronald Reagan signed the legislation to deregulate the savings and loan industry, long a stable bulwark of the housing market and family finances. "All in all, I think we've hit the jackpot," he quipped charmingly.

It was a jackpot for the crooks who took over the thrifts, milked their assets and drove them into bankruptcy -- and for the political cronies of the Republicans who eventually swept up the remains in profitable work-out deals with the government. It was not a jackpot for the taxpayers, who ate the trillion-dollar bill for cleaning up the fiasco and taking over the bad debts because ... well, because someone had to pay the price. . . .

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