tbenner
Sadly, this myth, one of many will be revived as soon as the evil empire catches it's breath.

The merger of financial, corporations and government is called fascism. Please do not call it socialism.

Alan MacDonald

Sean, right on.

'Free market democracy' is a myth --- a lie that never existed and was made up by the ruling-elite's 'corporatist Empire' to make their economic take-over of our waning political democracy sound more friendly than the truthful term; 'fascism'.

What we're facing is a far bigger battle than the fleecing of this supposed 'bailout'.

What we are facing is the final showdown between the economic empire of ruling-elite financial royalists against the very concept of America's most innovative contribution to the world: democracy --- vs. the chance, with our courage, to finally complete the American Revolution against the rule of empire in all aspects of our lives and liberty.

Today we have the opportunity of finally achieving the successful completion of the American Revolution; where the triumph of real democracy, rather than empire, in how men govern themselves, addresses the inexorably combined power of our indivisible political economy.

The good news of this epic crisis is that the real American innovation of democracy will finally (after 232 years) be applied to both the realms of political and economic self-governance, rather than only to the political sphere --- because empire, left alone in the economic sphere, has been perverting and trying to overthrow democracy since 1776.

This is not a choice between 'free market democracy' (which is only a PR lie told by the 'corporatist Empire' behind the facade of their two-party 'Vichy' government) and the scare term of 'socialism' --- but rather the long-delayed, final battle of the American Revolution, between democratic self-governance in the unified political economy of our country, or an economic empire of their corporatist/fascist elite metastasizing from the economic realm to the political realm and the whole of our society.

LeeAnnG

I hope the myth dies, but there are still some wingnuts out there who believe the problem was caused by excessive government regulation. Jim DeMint (R, South Carolina) was pushing this point of view on CNN this morning. Government interference with the free market, along with student loans and other "Big Government" oversight is, in his opinion, the cause of the meltdown.

He is opposed to the bailout, but for the loopiest, most convoluted reasons I ever heard. At least he wasn't a hypocrite of the "socialism for the wealthy, capitalism for the rest of us" school of thought. He was just plain old nuts.

Pardon my economic ignorance, but if there is "only" $100T of stocks and bonds and $75T of real estate and $500T of derivatives, does that mean that some "investments" have been sold twice (or more)as derivatives? Surely not!

Wow! I can't believe I'm watching this happen. It's gotta rank right up there with the Revolution, the Civil War, WWI, the Great Depression, and WWII. What a show! The collapse of reason, and reality. Massive incompetence. Blatant lying, Unparalleled greed. I sure hope voters are paying attention. I convinced 5 people last week to vote either Green, or at least for the Demos. Going to have to work harder, and find at least one or two borderliners. Wish me luck.

"Could it be that in this prostrate position, enough people will recognize that the unregulated free-market myth is dead?"

I would hope so, but I'm not optimistic. I agree with Webber. Bad ideas always seem to get recycled. We started buying into this bullshit about 50 years after the 1929 crash, and I suspect it will come back to haunt us 50 years from now (or sooner), when people have forgotten what they should have learned, and some right wing "think tank" (an oxymoron) will come along and dress it up in new duds.

RD

It's not really socialism to take taxpayer funds and redistribute them to the wealthiest members of society. It is, however, textbook fascism.

I'm reading Cullen Murphy's book 'Are We Rome' written in 2007 and what I read last night about feudalism and the privatization of government shows we certainly don't learn from history ... let alone recognize a myth.

A quote from the chapter 'The Fixers, When Public Good Meets Private Opportunity:'

"In the end, Rome was heading toward something the Romans couldn't. by definition, have a term for. But we do: it's the Middle Ages." ... "In other words, the public had become private." ... " In 1976 a book was published in the United States called 'The Shadow Government;' its subtitle spoke ominously of ' the government's multi-billion-dollar giveaway' of decision making authority." ..."In the 1980s Ronald Reagan created a presidential commission on privatization to study not how the boundary between public and private might be bolstered but how it could be pushed out the way even further, to give private interests more opportunity to move in. The same idea surfaces in the 'reinventing government' movement of the Clinton administration: 'We would do well,' one expect advised, to glory in the blurring of public and private and not keep trying to draw a disappearing line in the water.' ..."

Our Pres and VP candidates are but cogs in the cycle. But, so are we.

What to do? Wish I knew what would get the attention of us 'already peasants'
Even if we fought to have this book read in every school and placed in every library ...it feels too late.

I'm reading Cullen Murphy's book 'Are We Rome' written in 2007 and what I read last night about feudalism and the privatization of government shows we certainly don't learn from history ... let alone recognize a myth.

A quote from the chapter 'The Fixers, When Public Good Meets Private Opportunity:'

"In the end, Rome was heading toward something the Romans couldn't. by definition, have a term for. But we do: it's the Middle Ages." ... "In other words, the public had become private." ... " In 1976 a book was published in the United States called 'The Shadow Government;' its subtitle spoke ominously of ' the government's multi-billion-dollar giveaway' of decision making authority." ..."In the 1980s Ronald Reagan created a presidential commission on privatization to study not how the boundary between public and private might be bolstered but how it could be pushed out the way even further, to give private interests more opportunity to move in. The same idea surfaces in the 'reinventing government' movement of the Clinton administration: 'We would do well,' one expect advised, to glory in the blurring of public and private and not keep trying to draw a disappearing line in the water.' ..."

Our Pres and VP candidates are but cogs in the cycle. But, so are we.

What to do? Wish I knew what would get the attention of us 'already peasants'
Even if we fought to have this book read in every school and placed in every library ...it feels too late.

Excellent article. You write:

"Could it be that in this prostrate position, enough people will recognize that the unregulated free-market myth is dead? ...the economic reality is: socialism for the rich; capitalism for everybody else. "Compassionate conservatism" for the wealthy. "Market discipline" for the poor."

That myth will not die easily. Rigged trade, corporate welfare, and social Darwinism have been with us for decades, and like frogs we've been slowly acclimated with intense, relentless propaganda to boiling water. Too many of our friends and family are already unconscious and it will take a lot of pain to wake us up from the delusion.

If there is to be any farce-market bailout, rescued banks must yield public equity and have their books aired in sunshine. And those responsible for gross malpractice and malfeasance must pay the price: no parachutes, no bonuses, and retroactive stripping of ill-earned profits. A good number of them should be wearing orange jumpsuits, black hoods maybe, but no fedoras or Club Fed casuals.

I can't wait until these guys are managing our Social Security funds!

That's it in a nut shell.

Lose your 50K house, tough luck. You should've read the fine print.

Lose 89 billion in assets, Uncle Sam writes you a check.

Wake up!

(BTW - I am an investor, an active stock trader. This has cost me. Technically, I should be in favor of a bailout. But I can't stomach this on principle.)

Casino gambling is one of the few vices that I do not have. But I'm familiar enough with what goes on in Vegas and at the local tribes' resort complexes that I'll toss this analogy into the mix alongside Sean Gonsalves' crap game scenario.

If you or I or the ordinary Jane or Joe venture up to the casino for some draw poker, black jack, or even the slots, we ante up to the management with real cash and get face value chips or coins in return. We convert this fake currency back into greenbacks at the end of our escapade - win, lose, or about break even.

As a regular player patron, ever try to get a line of credit to gamble at a casino? Not very likely. Only known, verifiable high rollers get that special courtesy treatment from the gambling house management and staff.

Only the big dogs get to play the game with the house's money, and even for them, it's only for a finite period of time, or up to a certain limit. For the rest of us commoners, it's cash upon the barrel head. And the casio entrepreneurs could care less whether you're betting money that you've earned and saved, a roll found lying on the sidewalk, funds borrowed from a bank or from some silent backer, or even cash that was stolen outright.

Playing the stock market (like my Depression-era grandmother always used to say) is really no different than plain old gambling. Sure, there are serious students and experts with various skill levels at the various games. There are folks who gamble wisely and others who are fools, lucky and unlucky, the rich and poor and middle class alike, all hunkered down shoulder-to-shoulder together, betting their respective stakes one against the other and all against the house. Everybody ultimately relies upon the level-playing-field integrity of the game that's underway.

Wall Street is the casino. The SEC is the government gaming commission outsiders charged with regulatory oversight to prevent cheating. The Glass-Steagall Act said that ordinary financial institutions like your neighborhood bank could not lend depositors' funds (or the bank's own assets) for purposes of gambling it into the stock market.

Prior to the great crash of 1929, Wall Street ran strictly on an honor system. Many banks indeed loaned out money to bet on hot stock tips, upon whatever terms the bankers saw fit. The result was the Great Depression - too much borrowing for stock market gambling on margin (credit), causing first the investor-players, then the Big Casino, and finally the whole banking system to implode upon itself. Only a lucky few (most with insider information, my grandma claimed) emerged from the rubble of the big collapse.

By the 1980's and 90's, a couple of generations of economists and financial big wigs had persuaded themselves and the leaders of the two major political parties at the federal level that we were all much, much smarter, and much more highly sophisticated now. Glass-Steagall was outmoded, inefficient and no longer necessary. It was perfectly safe to put the fox in charge of the hen house over at the Securities and Exchange Commission.

Do away with the evils of unnecessary regulation we were constantly reassured from the Reagan era forward, and the invisible hand of the global market place would work its magic, float your boat, and everybody else's.

The big investment banks emerged as major advisors, money managers and bit time players in their own right at the casino tables (no conflict of interest here to worry about). The high rollers could hedge their bets with a side ante into a hedge fund. Best of all, an outfit like AIG then arose, a brave new breed entity that would actually let the gambler-players take out a policy of insurance to cover some (or all) of their potential risk of loss. Over time, the distinctions between borrower and lender, player and backer, banker, investment banker, investment advisor, and insurer blurred together almost beyond recognition, well beyond the reach of meaningful watchdog oversight.

By all accounts, it was the threat of AIG going under which triggered last week's hysterics and the dramatic "bipartisan" political response in Washington.

At the height of the crisis, John McCain shot from the hip and publicly announced that if he were in charge, he would immediately fire the head of the SEC. For once and one time only, the Bush White House got it right. They staunched this potential media feeding frenzy by issuing an immediate vote of confidence in the SEC Chairman, whose head McCain would have sacrificed and served up upon a platter.

What does this signal to you about John McCain's judgment and temperment and executive style in a time of potential crisis?

To me, when there's rioting underway in the streets, this is absolutely not the time for responsible public figures to demand that the Chief of Police be fired.

Later on maybe, once the dust has settled, if the police department is indeed determined to be in part to blame for the breakdown in law and order.

But not then and there, at the height of the crisis, while the barbarians are marching towards the gates, do you demand a brand new management team, any more than you fire your Fire Chief while the city's ablaze.

Knee jerk reactions like John McCain's two cents' worth last week is the sort of stuff that works only in bad war movies. It is dangerous character flaw.

Bill from Saginaw

Aside from the fact that this year, so far, the Fed has rewarded the Wall Street thieves with $25,000 from each and every taxpayer (the average of whom nets only $25,000 a year coincidentally,) now we're supposed to believe the criminals are also our saviors.

Can the Fed be (don't laugh; screaming is okay) trusted to run the biggest mortgage market in the country AND the biggest "insurance" company in history? (While continuing the failing illegal occupations of Iraq and Afghanistan and unilaterally committing acts of war against Pakistan and Somalia and prepping for an illegal, aggressive war with Iran?)

"A study by the Defense Department's inspector general found that the Pentagon couldn't properly account for more than a trillion dollars in monies spent."

"Reuters reports that the Pentagon could not pass the muster of a traditional audit..."

"The Veterans Administration used flawed techniques to estimate its budget and then failed to inform Congress in a timely and complete manner when the problems were discovered, an independent audit has concluded."

"According to the inspector general, more than a dozen employees of the Interior Department's Minerals Management Service in Denver had accepted gifts from people in the gas and oil industries. Some of them used drugs with and had sex with industry staffers. Two of them allegedly rigged contracts."

"Since Bush took office, the National Debt has risen by nearly $4 TRILLION dollars."

--

Later today, God will announce that he is suspending all blessings for The United States of America until further notice.

bull's eye analysis. thanks.

This full frontal class war attack on US citizens through the front doors of the Treasury should be viewed as no less than a display of callous disregard leading to total cynical contempt for the welfare of 95% of Americans.

Freddie and Fannie were the trial balloons. AIG was the reinforcement. Those fiascos led directly to a "See, I told you they wouldn't complain" attitude that has taken us to Congress approved pillage and rape.

That our political representatives would rush headlong into the CheneyOilCo's plan to cripple the middle class for decades, provides clear indication as to why impeachment has been off the table.

They are all complicit.

Our history clearly defines taxation without representation as an criminality that demands action on the part of all Americans. Perhaps tea isn't the only thing that should be spilled. Maybe we should start now.

No bailouts. Throw them overboard.

As long as "conservatives" can frame a myth as "acceptable" to the public, the myth won't die so easily. Progressives must get into the long term habit of framing and reframing.

Sioux Rose

Last night after an inspired bike ride it came to me intuitively that these numbers prove one thing: the whole concept of money/dollars is now defunct. Indeed the numbers based on these derivatives, utterly divorced from WORTH, actual holdings, incomes of persons and nations, have effectively rendered all accounting systems null and void. It's all playland now, the great con, a casino throw of the dice that uses REAL peoples' livelihoods on those tosses. Perhaps this is the beginning of a universal currency, one that no longer gives the US leverage against all other nations; but sees that our nation is an equal player in the global arena. That is, unless the threat of bombing nations causes them to forfeit their chips.

sorry for the double post!

The federal government doesn't want to issue a national health care system, citing the "evil socialist" component. Yet they bail out corporations left and right, and they value insurance companies over the well being of millions of citizens! Why does the US have disgusting rates of death in relation to birth, cancer, HIV, etc? For being "the greatest nation on earth," this country ranks close (or worse) than so-called third world countries in many categories of basic health care.

Why is it that if the feds help poor people - ordinary workers (i.e. many who have fooled themselves into thinking they are middle class when in reality they are far from it) then it is somehow "not the American way?" And at the same time they will bail out a minute fraction of the population (CEOs and Wall St money mongerers)?

The US is witnessing the culmination of a policy a long time in the making: socialism for the rich and capitalism for the poor. The same morons who constantly cite the "founding fathers" are, in fact, acting much like George III's cronies did in the late eighteenth century.

The federal government doesn't want to issue a national health care system, citing the "evil socialist" component. Yet they bail out corporations left and right, and they value insurance companies over the well being of millions of citizens! Why does the US have disgusting rates of death in relation to birth, cancer, HIV, etc? For being "the greatest nation on earth," this country ranks close (or worse) than so-called third world countries in many categories of basic health care.

Why is it that if the feds help poor people - ordinary workers (i.e. many who have fooled themselves into thinking they are middle class when in reality they are far from it) then it is somehow "not the American way?" And at the same time they will bail out a minute fraction of the population (CEOs and Wall St money mongerers)?

The US is witnessing the culmination of a policy a long time in the making: socialism for the rich and capitalism for the poor. The same morons who constantly cite the "founding fathers" are, in fact, acting much like George III's cronies did in the late eighteenth century.

The US Government should be nationalizing outright any company that requests a “bailout.” Government bureaucracy could not possibly do a worse job than private bureaucracy has done.

Ten years ago I edited some MBA teaching materials on financial strategy. Oh, the arguments I had with the academic authors over derivatives, and other impenetrable financial products, which I thought were dangerous and bound to lead one day to disaster. I don't suppose anyone will promote me to full professor now, but at least I can indulge now in a little smugness and Schadenfreude

Derivitives sound like a child of the practice that used to be called "kiting".

No its not the death of a myth because if its one thing that right wing idiots have going for them (besides a total lack of shame) is convenient lapses of memory.
They will forget about the disaster in a few years and start right back with socialism is evil.
And they will be helped by the Democrats who support the same policies. Only the third parties say it like it really is.