Socialism:Take a look at what the government, at the behest of President Bush and Secretary Henry Paulson, have done in the last ninety days. Tell me it's not socialism.
1. a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.
2. procedure or practice in accordance with this theory.
We’ve bailed out or dramatically underwritten risks for mortgage bankers, security trading houses, insurers, and now auto manufacturers – to the tune of over 1.3 trillion-with-a-“T” dollars. Carl Sagan didn’t talk about numbers that big. McDonald’s hasn’t sold nearly that many hamburgers. I've seen estimates that the total cost of the bailout will wind up being as high as five trillion-with-a-“T” dollars. That might be a bit alarmist, but we're two-sevenths of the way there and George Bush the Nationalizer still has nine weeks in office to go.
The government has seized and taken over day-to-day management of the nation’s largest insurance company, AIG. It has taken controlling-interest sized shares in three of the five largest brokerages on Wall Street. It has brokered and underwritten the sales of banks engaged in mortgage lending, again taking equity interests in those corporations. It is about to lend a quarter trillion dollars to the three major “U.S.” auto manufacturers. And it turns out AIG didn’t get to suckle enough sweet, sweet bailout money from the public teat, so the government is letting it go back to the well.
Why can’t banks buy and sell each other on the open market? If Wachovia fails, it still has a bunch of assets, and the comparative mix of assets to liabilities will get sorted out either in the form of a capitalized (not leveraged, there isn’t that kind of leverage right now) takeover or a liquidation. There is no particular need for the government to underwrite the risks associated with such a takeover – the risks are something that the purchasing bank is supposed to figure out and build in to its purchase offer.
Am I missing something here? Isn’t the system that I’m talking about called “capitalism”? Isn’t this supposed to be a basically capitalist economy? Ah, but George Bush claims this is a capitalist country. Now, I know it's no longer true.
Call it what it is.