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After a generation of near totalitarian ideological rule, the fiction of the unfettered free market--which was used as a blunt weapon to weaken or destroy almost all forms of market regulation--and the Bush administration's Coolidge-like economic policies, have brought the capitalist financial system to the brink of a collapse similar to the days before the great crash of October 1929.

The current crisis has forced the Fed to rediscover the need for the firm hand of market regulation and intervention to restore order and trust in a market system collapsing under the destructive weight of laissez-faire ideology. The current crisis has served to pull back the curtain of our political economy to reveal the manipulative wizard hiding behind the fiction of a laissez-faire capitalist ideology that assumes THE MARKET can function free of the structuring hand of human regulation and decency.

The current crisis has forced even President Bush (in his brief statement of Sept. 18) to admit the need for the assertion of a firm governmental hand to keep the global market system from collapsing like a house of cards. Over the last several weeks we have witnessed the arm of the federal government rediscovering its regulatory function in the midst of crisis, as it has reached out to rescue Fannie Mae and Freddie Mac, to orchestrate the orderly dissolution of Lehman Brothers, to nationalize the global corporate insurance firm AIG, and to begin to structure a new regime of regulation to try to reign in the destructive powers of unfettered greed--even as Congressional leaders are now working with the administration to prepare a strategy for taking charge of over a trillion dollars of bad private debt, which will be handed over to American taxpayers to take care of while the CEOs of failed firms continue to walk away with millions of dollars.

Altogether, these actions are demonstrating the gravity of the current financial crisis, which is requiring the federal government to assert a comprehensive financial regulatory power in ways not demonstrated since the years of the Great Depression in order to protect and bring order to a market system teetering on the brink of collapse.

We are, I suppose, lucky that current government financial leaders such as US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke seem to have learned well the historical lessons of the Great Depression, and are therefore not repeating the mistakes (of inaction) of the Coolidge and Hoover administrations that helped to precipitate the Great Crash of 1929 into the disaster of the Great Depression.  Whether this will be enough to avoid the Great Crash of 2008, however, remains to be seen.

If the same kind of incompetence and corrupt leadership were in place at the Fed and the Treasury as have been in place in most other parts of the Bush administration, we might already be talking about the great crash of September 2008. And while we’re not yet beyond the danger of such a collapse, the Bush administration’s rediscovery of the need for the strong hand of regulation to guard the market against the excesses of laissez faire totalitarianism may at least finally begin to reverse the tide of financial and economic disaster.  As with most of the corrective policies of the Bush administration relating to war and finance, however, this policy correction may be far too little far too late to avert disaster.

In the next days, including another busy weekend for the beleaguered Paulson, we shall see whether the reactionary leaders of our current government can make good use of historical wisdom and the appropriate powers of government to fulfill their duty to provide for the safety and welfare of the American people and our economy.  If they fail, we all will suffer the consequences of the elections of 2000 and 2004 that turned our government over to the Republicans.  And even if they are successful at fending off the crash of 2008, we need to work to make sure the election of 2008 does not result in the same kind of gigantic mistake that brought us to the brink of this disaster.  

Originally posted to Policybusters on Sun Sep 21, 2008 at 10:40 AM PDT.

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Comment Preferences

  •  Have you read (0+ / 0-)

    the proposed legislation?  It doesn't involve any regulation.  Or oversight.  Or accountability.

    •  Not surprising (0+ / 0-)

      I'm not surprised, given the way this admin works according to the logic of the shock doctrine, to hear there is no actual regulation contained in the proposed bill--

      The question is whether the Democrats will now act to make sure the bill is not passed without making sure regulation, oversight, and accountability are all added to the bill!

      Satyagraha Now! Einstein: "The release of atom power has changed everything except our way of thinking..."

      by Policybusters on Sun Sep 21, 2008 at 10:50:49 AM PDT

      [ Parent ]

  •  All war, all the time (0+ / 0-)

    So far McCain and Palin have been rattling sabers at Russia, Iran, and North Korea.

    Is there any country they WON'T attack if elected?

    I'm damn sure not going to bitch because some low-life is buying food with my tax dollars Big fucking deal.

    by bonepony on Sun Sep 21, 2008 at 10:57:22 AM PDT

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