By Dominick L. Auci
Only a few short weeks ago, American Treasury Secretary Henry Paulson made the whole World a promise. If only American taxpayers would ante up $700 billion, the US Treasury would buy up enough troubled mortgages to stem the soaring tide of home foreclosures and put the brakes on a rapidly accelerating financial melt down. Despite protests and out right catcalls from millions of average Americans (who are actually much smarter than they look), Congress took the bait and put them and generations of their children on the hook for nearly a trillion dollars.
Now, fast-forward to this morning, November 18, 2008: Paulson and Federal Reserve Chairman Ben Bernanke defended their management of the bailout program on Capitol Hill, just one week after the administration officially abandoned its original rescue strategy of buying the troubled loans from financial institutions. Only people who don’t know Mr. Paulson, his long resume as a consummate Wall Street insider and former CEO of Goldman Sachs, or those without any understanding of what’s really going on in the World, are surprised.
As the financial collapse accelerates, the historic goal of governments in general and the Bush Administration in particular, is becoming ever more transparent: protect the interests of the moneyed men. There is no mention of this raw fact in the mainstream Media. Like bleating sheep, even the most respected and “left-leaning” News Organizations simply repeat the mindless montra that some how, the defaults of less than 5% of residential mortgages in the United States are responsible for the global melt down. Few understand the complex debt instruments and credit swaps that lay at the heart of what amounts to secret, unregulated international racketeering of the rich and powerful. Thousands of Hedge Funds spent the last eight years turning international equity markets and banks into wild, anything goes casinos. And guess what happened? Rich people lost money!
Now THAT is a completely unacceptable outcome to any “free market” that the Bush Administration understands. So Paulson and his thugs swindled nearly a trillion dollars out of a scared and gullible Congress with lies and threats and instead of doing what they promised, doled out the cash among the world’s largest banks. The banks didn’t lend anyone any money really, but immediately paid huge dividends to wealthy shareholders and immense bonuses to already over paid executives.
As if that wasn’t enough to finally declare the class war, when General Motors, Ford, and Chrysler, who employ millions of blue collar working stiffs had the gall to ask the same Government for even a paltry $25 billion in loans, Bush, Paulson and all the Republicans in Congress suddenly turned back into Capitalists again. All the complex financial double talk in the world can’t hide the basic fact that global Capitalism as practiced over the last eight years has failed. Rich people all over the world lost trillions of dollars and are now trying desperately to use governments to transfer that loss onto the backs of billions of poor and working class people. In its final days, the Bush Administration is trying to hold open the vault doors as wide as possible while the real pirates escape with as much bullion as they can. My guess is that right from the podium of Obama’s inauguration, George Bush and Dick Cheney will board a non-stop flight to Riyadh.
The true genius of Democracy is that where it has had time to establish itself and mature, it affords a means to resolve precisely these kinds of situations without violent upheavals or times of troubles. However, in this event, the Bush Administration, even in its waning days of power, is intensifying its rapacious eight-year war on the world’s poor and middle classes. Like an economic drunk driver, such behavior now represents a real and present danger to places like Russia and Latin America, places without deep democratic traditions or institutions and where such instability can produce unintended and unpredictable consequences.
I remember back in October, laughing grimly when former Federal Reserve Chairman Alan Greenspan, a long time advocate of the so-called “Invisible Hand Theory” of Capitalism testified before Congress. He admitted “errors” and that he was in “a state of shocked disbelief” about the breakdown in the ability of banks to regulate themselves. Now, as 2008, the Bush Administration and its peculiar brand of regressive Capitalism fail, I’m remembering Greenspan’s words and perceiving that the Invisible Hand is trying to give the whole wide World a final, invisible finger.
Dominick L. Auci, Ph.D.
Escondido , California