Tuesday, September 16, 2008

The Not So Northern Welfare State

Corporate welfare is alive and well in the home of free enterprise, the Deluded States of America. The New York Times reports the feds are prepared to put in place an $85-billion bailout loan for ailing American International Group, AIG. In nationalizing AIG, the feds will acquire an 80% ownership position.

Gee, Russia got rid of state ownership with the collapse of the Soviet Union. Now it's America that is getting into state ownership. Fanny Mae, Freddie Mac, AIG - the question on everyone's lips is "who's next?"

Bush, having largely exempted the rentier class from taxation, gets to place this burden on the remaining taxpayers - the working classes and their kids - who can just add it onto the already enormous tab they'll face for funding the Iraq war and borrowings to support tax cuts for the rich.

Washington Mutual is eyed as the next giant to tumble. That would leave America down to just two independent investment banks - Goldman Sachs and Morgan Stanley. Merrill Lynch was bought out and Lehman Brothers collapsed into bankruptcy on the weekend. Does anyone still remember Bear Stearns?

This devastation has to end somewhere but no one can tell where that is or when the US will get there. Worse yet, no one is taking bets on what will be left when they get there.

Fortunately the White House and then Republican-dominated Congress saw fit to put the thumbscrews to unfortunate individuals who fell into bankruptcy. It simply wouldn't do to let the wee folk get away with the same thing Wall Street is trying to pull on such an enormously grander scale.

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