I read enough Chomsky in my 20s to find it amusing when anyone in the elite media or in politics froths at the mouth about our "free market economy" and how the market is a great moral arbiter and that the solution to the market's problems is a tiny government with limited regulatory intrusions into the business of business and finance. While spouting this junk, everyone knows that free markets don't work, and there is no greater proof than the actions taken yesterday by Bush and Paulson. When you have free markets you end up with gangster capitalism like in Russia since the Chicago School re-organized their economy, or outright looting like in Baghdad after the neocons re-organized their economy, or total collapse like in Chile under Pinochet after privatization (again under the guidance of the Chicago School)*, etc. Those who profess their admiration for and pledge their committment to free markets nod and wink at each other, because they are planning to bilk what they can and leave the scraps to the rest of us, knowing full well that free market ideology will disappear into periodic hibernation when the inevitable bail-out happens. The investment class will be taken care of, no matter what. Then after the rich have had their pockets lined first by looting and then by a bail-out, the free-market ideologues will re-emerge unscathed by the past failings of their theory, our chirruping cicadas against big government regulation.
Look how quickly Bush and Co. morphed into FDRs, just as Reagan and Co. did after the Savings and Loan crunch two decades back. Funny how Average Jane and Joe can suffer pretty harsh circumstances for two years and nobody gives a rat's ass. But some big-shot investors lose value in their portfolios and then we have a trillion dollar bail-out package that makes EU market manipulations look downright conservative. As Noam used to say: in America it's "socialism for the rich, and the free market for everyone else." Remember that much ballyhooed bailout of Mexico?
Remember all the TV talking heads and policy wonks bemoaning how we bailed out the Mexican currency to prevent a crisis because they couldn't handle their business south of the border? Well, we didn't actually bail out the Mexican currency. The Fed paid investors back who lost their shirts on foolish speculations. Why? Because of socialism for the rich. And that was on Clinton's watch--and at the same time that Clinton and Gingrich were screaming at welfare moms to go back to work or else.
Free markets are bullshit. The free-est free markets have immediately preceded every great crash, including the greatest of them all in '29, and its current runner-up. Businesses are geared to grasp every cent of profit, and will break every rule in order to do so. Without a strong government to audit and check them, they will eventually manipulate the system into total chaos. We just saw it again. Americans however will quickly forget and enthuse over another rash deregulatory nutcase in a few years I'm sure, even if the current collapse worsens (H.L. Mencken taught me about the confounded buffoonery of my fellow citizens. He also told me to take pleasure from observing it. I try.). Governments are at least somewhat responsible to the citizens--corporations are huge transnational organizations now, often monopolies, and citizens have no recourse for protection and redress of grievances other than government regs.
The ideologies of the Chicago School of Economics have been discredited time and again, but still remain the economic theory of choice for Republicans and most Democrats. Hilarious.
I wonder how this trillion dollar bail-out will work. Are we going to throw this money at the very financial institutions whose corruptions have been so well-documented? Are we going to let Bush and Cheney and Paulson hand it over to fat cats so that a tiny percentage might trickle down to the rest of us? Is a subsidiary of Halliburton going to manage it? I don't have much confidence in Reid or Pelosi to handle this business. Schumer I trust a bit more.
My prescription for what ails us? Drown Grover Norquist in a bathtub.
*of course in Chile after the disaster following Chicago school remodeling, the free market/privitize everything idea was tanked and heavy regulation was re-introduced to save the system. But somehow the Chicago School takes credit for the current success of Chile's economy. Hardee-har-har!