Cross-posting: This appears at Marry in Massachusetts.
In particular, Republican Presidents and legislators rode this swaybacked workhorse round and round the public ring. America was great because we believed in the free market and let capitalism have its way. Markets reward the smart and punish the incompetent (and slow).
Americans as a whole are a trusting lot and they want to believe. They bought the Reagan trickle-down and guns-and-butter fantasies. Those, of course, have proven total lies and impossibilities. Then George the Lesser sold a more insidious economic and political dogma. We have seen a balanced budget disappear and morph into a great-grandchild enslaving deficit of vast size.
I would like to be able walk onto my front steps, extend my arms and fly. That is as likely to occur as any of the Republic failed economic pronouncements.
The fact is that at least from when I worked at American Management Association in the late 1970s, American CEOs have had an exemption from the free market. Their companies falter, investors lose value, and the bosses and boards get big bonuses.
Now increasingly, the huge corporations get their own GET-OUT-OF-FREE-MARKET cards. If you become a mythical too-big-to-fail critter — bigger than Lehman Brothers, but smaller than AIG — you get a card and a U.S. buyout. There is no free-market reward/punishment system.
Truth be told, the public is terrified, as are the regulators, legislators, bureaucrats and the Bush Administration. What if…what if…what if? Moreover, what if the Republicans and other self-identified fiscal conservatives are seen to be totally scamming the public on their free-market views? What if the invisible hand of capitalism no longer exists?
The facts say that's so. Congress and Bush have mandated that we own 79.9% of AIG, the world's biggest insurer, and via Fanny Mae and Freddy Mac, we own the majority of the nation's mortgages. The smarmy politicians can call it this, that or a purple cow. It's socialism.
We've nationalized the gigantic financial institutions and assumed the tainted, failed examples of capitalism. Don't let anyone in Washington or anyone running for President pretend it is anything other than socialism.
Since the Soviet Revolution, we have ridiculed socialism. We have contrasted our free-market capitalism with the U.K. and European models. We have recently condemned perhaps 100 million Americans to substandard health care or none at all to run from socialized medicine, as Congress likes to call any form of universal health care.
Let's look at what a serious right winger has to say about these recent gests. Weekly Standard Senior Editor Christopher Caldwell, writing in the Financial Times, has a spot of history for those who would say it is only housing:
The significance for socialism of the first big British nationalisations after the second world war is that they involved the engine of the domestic economy (coal) and the repository of the country's wealth (the Bank of England). What is the engine of the US economy? Financial services. What is the main repository of Americans' wealth? Housing.
The terrifying facts include that few inside or outside financial markets understood or understand how the derivative markets that failed were supposed to work. When the financial giants bet wrong (for a decade or more), they were not the ones punished. The home-“owners” and voters took and will take the bath. The free-market has been out of play for so long that there is no downside to the gambling mentality of the ignorant and incompetent mangers masquerading as capitalists. Again, think too big to fail.
Caldwell notes that “Republicans may suffer damage not because their remedies are worse but because a lot of their ideology about how markets work has been belied by events.” They have been and still are rewarding the bozos for their clowning around.
For months now, analysts have noted that the Republican and fiscally conservative philosophy socializes and subsidizes the risks. Like a nuclear power plant, the bulk of ordinary folks pay for the construction, dismantling and other costs, the bond holders simply reap the profits and walk away.
Caldwell further calls out Bush, Fed Chair Ben Bernanke and Treasury Secretary Hank Paulson on “their preference for the free market solutions.” That is more of the same illusions and lies. As Caldwell writes, “The financial era that started a quarter-century ago is drawing to a close. Since the instruments that permitted an extraordinary leveraging of assets have been discredited without really being understood.”
The games that the marginally competent and worse have played with our lives and the economy are over.
Bill Clinton's administration was able to reverse the dreadful economic stupidity of the first Bush's era. Caldwell doubts there'll be enough free money to do the same this time.
However, while it may be a long, long while before our economy can thrive again, this period should stop for all time the fantasy that we are averse to socialism. For decades, we have paid billions, now a trillion to the failed capitalists, both as executives and as employees and as corporations.
When it comes time to re-examine providing basic health care for all, what pretenses will there be left to shield the lawmakers?