A couple of months ago Secretary of the Treasury Paulson told us the sky was falling and convinced Congress to approve the $700 billion TARP (Troubled Assets Relief Program). The TARP would buy up all the toxic mortgages that the banks had created out of their failed attempt to satisfy their insatiable greed. You will recall that these mortgages were given to people who often didn’t have a job and had no ability at all to repay the loans. These loans were provided by the banks at exorbitant interest rates because the geniuses at the banks (they must be geniuses – they make $30 million or more a year in salaries and bonuses) believed that they could either flip the mortgages to some unsuspecting investors and make a huge profit, or they could hang onto the mortgages and squeeze the lifeblood out of the poor homeowners and still get astonishingly fabulous profits. It turns out that the bankers were wrong on both counts and the banks wound up holding stunningly massive amounts of absolutely worthless mortgages (also known as Troubled Assets).
Today, Mr. Paulson advised us that regarding the TARP, he is no longer for it. He was for it, but now he’s against it. The TARP, also known as the bank bailout in Democratic circles, would not be used to buy mortgages after all – sorry Congress. Hey, don’t get mad – it’s only $700,000,000,000.00. Despite Congresses instructions, the money is now nothing more than a gift to the banks who can now do whatever they want with the money. Right now they are sitting on it. Sec. Paulson hopes, but he isn’t sure, that they will lend the money via credit cards or other loan instruments. (I guess, if all goes well, these new loans will be at the usual extremely high, usurious, gotcha interest rates that will punish the borrowers as much as possible without actually killing them – because of course dead people can’t repay a loan.)
Our President and his administration like to think of themselves as pure Capitalists. They put their faith in a banking system that is self-regulating, an economy of no rules, an economy that takes no prisoners and where only the strong survive. Their faith in this is close to a religious faith and they will brook no questions about it. For them this, and only this, is the true spirit of America, and anything less is the road to Communism, let alone Socialism and all the other un-Americanisms. It is Republicanism at its finest – rule of the wealthy, by the wealthy, and for the wealthy.
So, this is where we have landed. The President and the Secretary of the Treasury, our great defenders of Capitalism (Kapitalism?) are acting like closet Marxists. They are using the people’s money to bail out the banking businesses, like Paulson’s old employer, Goldman Sachs, while they imply that this will help the ordinary people. Does anyone really believe that? It’s pretty clear that helping us, the ordinary people, is, and always has been, the very last thing on their minds. In the end we can’t call this Capitalism, we need to call it what it is; it is Socialism for the banks and Socialism for the owners of the banks. It is unapologetic Socialism for the wealthy – at the direct expense of the U.S. taxpayer. The question I have is this: how can our country and the world survive two more months of this selfish incompetence?