American Socialized Capitalism: The Wall Street Bailout

Friday saw the full effort to socialize risk and leave privatized rewards, when the Secretary of Treasury announced the Wall Street bailout program. The Bush Administration’s proposed bailout would reward those who used highly leveraged, extremely speculative and risky practices by allowing them to purge their toxic Tier III assets from their balance sheet by selling them to the U.S. Government. Without surprise to many details were not disclosed; yet, the White House urged immediate passage of the proposal, claiming that there was no time to lose or we would experience a financial collapse and a global meltdown!

The devil is in the details and those are being secretively hidden from public view. Rumors are rampant that part of the furtiveness is because the program will include provisions that will enable international companies to prevail upon the American taxpayer to assume toxic assets from them. Other rumors are that everything is being kept hidden because the Bush Plan includes billions of taxpayer dollars for executives who created the financial disaster in the form of funding their Golden Parachutes.

The Secretary of Treasury and the Chairman of the Federal Reserve appear hell-bent to save the world’s major financial institutions to the detriment of America. One has to ask why? Why would an American Administration want to further deepen the American debt load at a time when it is at the highest level in our 232 year history? In particular why would they wish to accomplish this when there are so many Americans in desperate need for help with their mortgages, a provision notably absent in the Bush Bailout Plan?

Is this yet another part of the Bush Administration’s goal to socialize risk? Is it part of the neo-conservative hidden agenda? A multi-tiered agenda that includes leaving this country so mired in debt that future administrations will not be able to enact programs that would benefit taxpayers. With the trillions of debt the Bush Administration has burdened the country with is the possibility of health care reform dead for future decades? Are the desperately needed changes to the abysmally failed education system also dead for the foreseeable future? Has the same death bell knelled for rebuilding our crumbling infrastructure? The infrastructure that needs so badly to be rebuilt (remember the Minneapolis bridge?) Do the direly needed transformations in the energy industry that would reduce dependency on foreign oil stand any chance of being implemented on a timely basis?

The neo-conservatives will argue that the fiscal responsibility will need to be restored to make this country great again. Patriotism will be evoked at every possible opportunity to obfuscate the fact that nothing can be done to help the American people because of the massive debt level left by the Bush Administration. Pundits will propound the need to win the war on terrorism and denigrate any new program as one we can not afford due to the trillions of debt dollars. All of these spin practices will be used by the neo-conservatives in their attempt to further the interest of multinational companies.

The Bush Administration after 8 years of decrying the need to keep government (as it grew government larger than any other administration in our history) out of business, it now advocates that the government needs to assume strong relationship with business. Margaret Thatcher, the first woman British Prime Minister widely used her government to further U.K. commercial interests; even actively campaigning on a personal level in international competitions. Indeed there is a host of other allies who use a similar model. It is also a model widely used by countries who are not our allies and those who are our enemies. One could assert that this is the currently most widely used model in the world; and, also historically.

If this model is so widely promulgated and employed, then why should one oppose it in America? There is one highly significant reason – the approach envisioned and presently employed by the Bush Administration. While the rest of the world has developed government-business relationships that are bilateral and create mutual benefits; the neo-conservative version is highly unilateral with all of the benefits ceded to business and all of the disadvantages bestowed on the government, i.e. directly onto the back of the American taxpayer. The proposed bailout epitomizes this model – American Socialized Capitalism!