In the next couple of weeks, George Bush will prove that the last 30 years of supply side, free market economics was nothing more than a overripe pile of horse manure. In fact, right now, the B-52s are being loaded with pallets-full of freshly-minted hundred dollar bills which will be air-dropped from sea to shining sea.
The emergency bailout scheme is spearheaded by Goldman Sach’s former head-honcho, Hank Paulson. Paulson warns that the economy is slumping “rather materially” and needs massive jolt of capital to keep from sinking altogether.
“We are looking at things that could be done quickly,” Paulson quavered. “Time is of the essence.”
Former Treasury Secretary Larry Summers has recommended a “timely, targeted and temporary” tax rebate “of $250 per tax-filer, and $500 per couple for families with taxable income of less than $100,000.” (WSJ) Some variation of Summer’s plan will undoubtedly be implemented in the near future. The “invisible hand” of the market—which Bush praises ad nauseam—will be used to steer the Fed’s helicopters as they scatter the nation’s wealth like confetti across the fruited plains.
At present, the financial system is so clogged with subprime gunk and other mortgage-backed garbage, the banks can’t even provide loans to applicants with good credit. The gears have simply frozen in place. That’s why the Fed and the Dept of the Treasury cooked up this scheme to hand-out tens of billions of dollars via tax rebates to low and middle income families. It’s the only way they can revive the maxed-out US consumer long enough to get him spending again. If Paulson gets his way, the IRS will start cutting checks in a matter of weeks, which will get the cash registers at TJ Max and Target ringing shortly thereafter.
The Shining City On A Hill Might Be A Poorhouse
30 years of Reaganism has destroyed the country. It’s eviscerated our industrial base, broken the social contract, crushed our unions, savaged our schools and infrastructure, and shifted the nation’s wealth from the middle class to the upper 5 per cent. Wages have stagnated, the dollar is nosediving, the banking system is paralyzed, and subprime poison is surging through the global system shuddering banks and businesses around the world.
Of course, some people will argue that the $250 government checks are a welcome respite and a verification of “compassionate conservatism”. But how does that square with our 7-year experience of GW Bush?
Is this the same “compassionate” Bush who deliberately withheld food, water and medical supplies from Katrina’s disaster victims while they huddled in the stinking, feces-infested Superdome or clung to the roofs of their homes while rescue boats were turned away by FEMA goons?
Bush and colleagues are ideologically opposed to giving working people a break; only, this time, they have no choice. The real estate market is crashing, the stock market is headed into ICU, and the country’s financial giants are stretched out on a marble slab waiting for the cathedral music to begin. Bush knows he has to act fast or suffer the consequences. That’s why he’s abandoned his alleged commitment to “free market fundamentalism” and ordered the Fed to put the printing presses on Full Throttle. To hell with principle; it’s crunch-time!
What Bush is planning is the moral equivalent of exhuming Milton Friedman from his moldy sepulcher and pounding a wooden stake through his heart. Albert Einstein summed it all up succinctly 60 years ago in an article titled “Why Socialism?”: “Nowhere have we really overcome …. “the predatory phase” of human development….The economic anarchy of capitalist society….is the real source of the evil.
Private capital tends to become concentrated in few hands, (creating) an oligarchy with enormous power (that) cannot be effectively checked even by a democratically organized political society….The the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development.”
MIKE WHITNEY lives in Washington state. He can be reached at: [email protected]