by JA Daraja

Created on: July 25, 2009

"Using Socialism To Save Capitalism"

Since WWII the US has engaged in a deliberate campaign to equate Socialism with inefficiency at best and moral evil at worst. Any nation that readily adopted socialist government was, by that fact alone, declared an enemy of the United States and of human "freedom". The Soviet Union was "an evil empire" and Cuba was "that imprisoned island nation". - According to the US doctrine, "freedom" was realized in the unrestricted financial marketplace. There, everyone had an equal chance to compete for the goods of society. -

All of that changed when the unrestricted financial markets began to collapse under the weight of over-priced and painfully insecure "securities". The US and western Europe realized that the threat was not only to a few large investment banks in the US, but to the global financial system. The greed that fueled the sub-prime mortgage feast had also consumed the resources needed for recovery from the crisis.

To be fair, it is important to say that this crisis did not come out of the blue. In 2007, US and European banks began scrambling to bolster weakening financial institutions. The common wisdom then was to keep the problem as quiet as possible in order to avoid causing panic. If the public knew how dangerous the situation really was, then consumers would reduce spending and withdraw their funds from banks. That would only make the problem worse. But it was already too late to stop the cycle from completing the "correction" Alan Greenspan had warned about.

Greenspan (former Chair of the US Federal Reserve) had said that the financial markets were operating with an "irrational exuberance" - his code-word phrase for over-valued stocks - and that, sooner or later, the financial markets would experience a "correction" - code-word phrase for being forced to face reality.

In 2008, reality knocked on Wall Street and continued knocking on all the doors that had received financial gifts from Wall Street: the mortgage-backed "securities". Loans that had been made based on these securities, assets that had been valued based on the acquisition of these securities, were suddenly not worth more than their paper. And banks started to fall.

In one week, the investment banks of Wall Street ceased to exist. Gone. - Other large banks in the US and Europe have followed, though the real losses to depositors and investors has been kept quiet. When US bank IndyMac failed, depositors with accounts over one-hundred thousand dollars only received half of their funds, fifty cents on the dollar. That fact has been generally down-played in media reports that focus on the banks rather than the depositors. Again, to avoid panic.

Now the champions of economic "freedom" have turned to the use of taxpayer funds to save the banking system itself from "correction". According to the principles of free-market enterprise, such corrections reward good business practices and punish bad ones. It is the spirit of enforced competition that defines capitalism.

Both Europe and the US have looked the monster of real competition in the face and turned away in horror. - Nationalized banks are the practice of socialist government, like Cuba, the former Soviet Union, and Iraq before the US-British invasion.

Millions of people have suffered and died under the US-European war against socialism. - How different the song when the masters need relief.

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