The Bailout
By Ghali Hassan
27 October,
2008
Countercurrents.org
“Comrade Bush is heading toward Socialism”. Hugo Chávez, President of Venezuela President Chávez was joking, of course. There is nothing socialist about the U.S. predatory capitalist system. There is nothing socialist about taking from the poor majority and giving it to the rich minority. This system of welfare for the rich or ‘socialism’ for the rich has been around for as long as Western Capitalism has been around. The bailout is a bogus solution designed to deceive the public and continue the status quo.
The Bush Administration’s use of fear to create panic among the population is designed to pacify dissent and allow the Government to proceed with its failed policy. The bailout bill of nearly $800 billion doesn't address the situation, but it will make the situation worse. It is a nontransparent bailout, where the Government takes the ‘bad’ assets and leave the ‘good’ assets. In other words, socialise debts and privatise profits where the interests of the corporations are maintained at the expense of ordinary people.
Meanwhile, Democratic Congress member Dennis Kucinich of Ohio rightly to called the bill: “The largest single act of class warfare in the modern history of this country … The Democrats have unfortunately become so enamoured and beholden to Wall Street that we are not functioning to defend the economic interest of the broad base of the American people. This is an outrage. This was democracy’s Black Friday.”
According to Nouriel Roubini, professor of economics at New York University, the U.S and global economy is heading towards a near-term financial meltdown. “At this point severe damage is done and one cannot rule out a systemic collapse and a global depression. It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging market economies to avoid this economic and financial disaster”. There has never been a better time for change than right now.
From the outset, the Bush Administration failed to do anything to prevent a housing bubble which is the root cause of the current financial crisis. Millions of ordinary Americans are losing their homes and jobs. In addition to the three million foreclosures that have already occurred, it estimated the numbers of foreclosures in the next two years are expected to be in excess of 3 million more. Instead, the Bush Administration is spending billions of dollars perpetuating war of aggression and destroying innocent human lives in Iraq and Afghanistan.
It is important to acknowledge that while the Bush Administration
bears full responsibility, the current financial crisis was nurtured
by the Zionist Alan Greenspan, the former Chairman of the U.S. Federal
Reserve Bank, the banking cartel. For nearly two decades, Greenspan
played his role as part of the larger Zionists control over U.S. financial
institutions.
Greenspan who has no credentials and no experience in economics was responsible for allowing bogus sub-prime mortgages to thrive and supported George W. Bush tax cuts for the wealthy and big businesses. He was also responsible for encouraging and promoting unregulated financial markets, a sacred rightwing Republican ideology. By artificially inflating assets, Greenspan allowed a small group of executives to make millions for themselves at the expense of ordinary taxpayers. Greenspan knew what he was doing; he wasn’t making “mistakes” as he told Congress recently.
It is the artificial inflating of assets, driven by Wall Street that is at the real core of this problem. The crisis will continue multiplying. “There is a fundamental flaw in the economic theory that successive U.S. governments have been operating on for years … We [Americans] are not spending our tax dollars on greasing the wheels of commerce, building a stable society, educating people and removing the shocks from things like accidents and disease. We are spending it on income transfers to the rich, on war, on interest on the national debt. And it’s impoverishing us steadily”, said independent author David Cay Johnston. “The taxes that Americans have paid in advance for Social Security benefits in the future were spent, principally to finance tax cuts for the wealthiest Americans. It is a transfer from working people to those who are already wealthy”, added Cay Johnston.
Just take a look at the enormous amounts of money donated to both Democrats and Republicans candidates. According to the New York Times, the biggest portion of the money coming from the securities and investments industry, including executives like Bear Stearns, Lehman Brothers and AIG. Do you think these big guys are throwing their money out of the window? Of course not, they are buying whoever becomes the President. It is an oligopolies-dominated predatory capitalist system.
As the late economist Paul Sweezy wrote, capitalism is “a juggernaut
driven by the concentrated energy of individuals and small groups
single-mindedly pursuing their own interests, checked only by their
mutual competition, and controlled in the short run by the impersonal
forces of the market and in the longer run, when the market fails,
by devastating crises … Nature and human labour are exploited
to the fullest to fuel this juggernaut”. The system is collapsing
because its imperialist foundations have collapsed.
Other countries that follow the script of U.S. capitalist system are not immune either. In France, the bailout amounts to €360 billion and forms as part of the €2.7 trillion by the 15 countries that form the Euro Zone. Iceland, the microcosms of a predatory capitalism, has been taken hostage by the International Monetary Fund (IMF) with a bleak future awaiting the people of Iceland. More European countries will suffer the same fate as Iceland.
Finally, it is preposterous to think the U.S. is moving towards Socialism and to call Barack Obama a “Socialist”. There is nothing socialist about U.S. capitalist system. The U.S. is one of the most unequal societies in the world, characterised by massive poverty and rising economic inequality. The U.S. has the lowest socio-economic mobility in the OECD countries. The U.S. predatory capitalist system is inherently pro big business with the accumulation of wealth in the hands of few. Obama is not a socialist. A true socialist is not in the business of defending Wall Street interests. This is just propaganda – led by Murdoch’s Fox News and the BBC propaganda organs – designed to instil fear in the American population and promote the Republican Party religio-fascist ideology.
The U.S. and its Western allies are sinking in deep recession. The bailout is a bogus solution and doomed to fail. However, there is an alternative based on the promotion of human community. Investment in productive activities to create jobs, build housing, schools, healthcare services and vital public infrastructure will lead to lasting economic recovery in a regulated financial system characterised by openness, transparency and accountability, free of greed and corruption. If elected President of the United States, Barack Obama should position himself to the left of President Hugo Chávez.
Ghali Hassan
is an independent writer living in Australia.
