How is it that Alan Greenspan, free-market lobbyist for Wall Street, recently announced that he favored nationalization of America's banks and indeed, mainly the biggest and most powerful? Has the old disciple of Aynn Rand gone Red in the night?
Today's neoliberal idea of "market freedom" preaches neutering government, letting Angelo Mozilo at Countrywide, Hank Greenberg at AIG, Bernie Madoff, Citibank, Bear Stearns and Lehman Brothers loot without hindrance or sanction, plunge the economy into crisis and then use Treasury bailout money to pay the highest salaries and bonuses in U.S. history.
Terms that are the antithesis of "free market" also are being turned into the opposite of what they historically have meant, a government giveaway to our richest citizens.
The Treasury might become the source of new money, replacing commercial bank credit. Hopefully, this credit would be lent out for economically and socially productive purposes, not merely to inflate asset prices while loading down households and business with debt as has occurred under today's commercial bank lending policies.
Modern neoliberal ideologues are public relations experts who depict a "free market" as one free of government regulation, "free" of anti-trust protection, and even of protection against fraud. The neoliberal ideal of free markets matches a bank robber or embezzler, wishing for a world without police, free to siphon off other peoples' money without constraint.
This could be achieved by suppressing knowledge of what Locke, Smith and Mill really wrote. Attempts to regulate "free markets" and limit monopoly pricing and privilege are conflated with "socialism," even with Soviet-style bureaucracy. The aim is to deter the analysis of what a "free market" really is: a market free of unnecessary costs: monopoly rents, property rents and financial charges for credit that governments can create freely.
Instead of industrial capitalism increasing capital formation we are seeing finance capitalism strip capital, and instead of the promised world of leisure we are being drawn into one of debt peonage.
By the end of last year, $20 billion was used to pay bonuses and salaries to financial mismanagers, despite the plunge of their banks into negative equity. These banks continued to pay lobbying fees to persuade legislators to give them more special privileges.
While Citibank and other major institutions threatened to bring the financial system crashing down by being "too big to fail," over $100 billion of TARP funds was used to make them even bigger. Teetering banks bought affiliates that had grown by making irresponsible and outright fraudulent loans. Bank of America bought Countrywide Financial and Merrill Lynch, while JP Morgan Chase bought Bear Stearns and other big banks bought WaMu and Wachovia.
Excerpted from Michael Hudson @ Counterpunch
