Tuesday, October 28, 2008

a government of the wealthy, by the wealthy and for the wealthy

It is no accident that the Bush-Cheney administration presided over one of the worst financial collapses and credit crashes in U.S. history, by packing regulatory agencies with cronies whose mission it was to let rapacious speculators and market manipulators go wild, and 12 years Republican Ruled Congress which De-Regulated Business under "Free Market" slogans. The result has been the creation of a casino-like speculative economy that is now crashing down before our very eyes. 

Under Bush-Cheney, financial markets became manipulated by unscrupulous bankers and by rapacious hedge funds, as public regulation was reduced to a minimum. Millions of Americans lost their homes through foreclosure and many more saw their working and pension incomes eroded and destroyed by inflation and plant closings. And as what could be a protracted recession proceeds, many more will lose their jobs in the coming months, while some older employees may have to postpone their retirement because of the disappearance of their pension money. 

In a parody of President Abraham Lincoln, we can say this has been an administration that deserved to be dubbed "a government of the wealthy, by the wealthy and for the wealthy." Some would not hesitate to say, also in parody, that it has been "a government of Goldman Sachs, by Goldman Sachs and for Goldman Sachs," considering the ubiquitous political and economic role which that firm has played within the Bush-Cheney administration. President Bush's own Chief of Staff, Mr. Joshua Bolten, comes from Goldman Sachs. And these days, everybody pretends not see the real and potential conflicts of interests of other public servants who are now on the giving public side of things, at the U.S. Treasury, and who are going to be on the receiving private side of public money, in a scant few months. It is the same thing with a lot of what the U.S. Treasury does. —Even the Governor of the Bank of Canada, Mr. Mark Carney, is a former employee of Goldman Sachs! 

In a related matter, for historical purposes, it will be remembered that, in the fall of 2008, the Bush-Cheney administration sponsored a huge rescue-plus-bailout of the largest speculative Wall Street investment banks (which the Bush SEC had deregulated on March 28, 2004) and of a host of other banking and insurance institutions which had engaged in alchemy or synthetic finance and made risky investments. To that effect, it is ready to place at risk close to $2.0 trillion of public money and let the public debt explode, with few conditions attached to protect the public interest. In fact, the Bush administration stood ready to advance hundreds of billions of dollars and only requested non-voting preferred shares in the troubled banks and insurance companies that it rescued from bankruptcy. As a consequence, contrary to what the Roosevelt administration did in the 1930s, the U.S. government has no direct say about the way the troubled financial institutions are managed and run, so if the bail-out is successful most of the benefits would go to bank owners and their executives; but, if things continue to deteriorate, taxpayers will be the ones left holding the bag. 

Some have said this is an example of corporate socialism for the rich. In fact, this has nothing to do with socialism per se, but everything to do with legal and unapologetical extortionism on a high level. For all these reasons, if the ongoing recession and financial crisis turns into a full-fledged economic depression, historians will name it "the Bush-Cheney Grand Economic Depression" of 2008-20(?). 

George W. Bush will also be remembered for having financed his whimsical and ill-conceived three-trillion-dollar war of aggression against Iraq on credit, leaving behind him a financial mess like no one has seen since the great depressions following 1873 and 1929. 

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