I am seldom given to hyperbole of this sort, but this time it's different.
We are at a watershed moment. Future historians will no doubt consider the events that unfold this week to be the defining events of the twenty-first century (and perhaps of capitalism).
Already we have seen the financial system deteriorate into the worst shape it has been in since the 1927 stock market crash and the Great Depression that followed. Many journalists are glibly reporting the demise of the financial services industry, but few seem to realize the epic proportions of this crisis.
We are currently balancing on a pivot-point which has our economy and the American lifestyle teetering between letting the banks go under, or destroying the free markets. Nothing good can come from either of those prospects.
If the banks go under and are not bailed out by the government, the fallout would be devastating to our financial system. Credit would dry up. Many fortune 500 firms, as well as most small businesses, would go belly-up and we would see a depression, the likes of which has never before been seen in this country.
On the other hand, if congress adopts Treasury Secretary Paulson's plan to bailout the financial industry, we will have kissed free markets goodbye and anointed Paulson the King of America.
Paulson and his cronies created this financial mess (he was a partner at Goldman Sachs before becoming Treasury Secretary). They got rich off of the games they played with financial instruments, and now Paulson wants the U.S. taxpayers to subsidize that folly. The crooks will retain their ill-gotten wealth and the taxpayer will foot the bill.
If Paulson's proposal gets approved as it was submitted, he will become, arguably, the most powerful person (elected or not) in America! Section 8 of his proposal reads (italics mine):
Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
You'd better read that again. It is unbelievable! This act would give Paulson absolute authority over the entire US Financial Services industry, a $700 billion budget, and furthermore put him above the law! Under this proposal, there could be no review of anything he does by the courts or by the administration!
Goodbye free markets. Goodbye capitalism as we now know it.
We are at a watershed moment. Future historians will no doubt consider the events that unfold this week to be the defining events of the twenty-first century (and perhaps of capitalism).
Already we have seen the financial system deteriorate into the worst shape it has been in since the 1927 stock market crash and the Great Depression that followed. Many journalists are glibly reporting the demise of the financial services industry, but few seem to realize the epic proportions of this crisis.
We are currently balancing on a pivot-point which has our economy and the American lifestyle teetering between letting the banks go under, or destroying the free markets. Nothing good can come from either of those prospects.
If the banks go under and are not bailed out by the government, the fallout would be devastating to our financial system. Credit would dry up. Many fortune 500 firms, as well as most small businesses, would go belly-up and we would see a depression, the likes of which has never before been seen in this country.
On the other hand, if congress adopts Treasury Secretary Paulson's plan to bailout the financial industry, we will have kissed free markets goodbye and anointed Paulson the King of America.
Paulson and his cronies created this financial mess (he was a partner at Goldman Sachs before becoming Treasury Secretary). They got rich off of the games they played with financial instruments, and now Paulson wants the U.S. taxpayers to subsidize that folly. The crooks will retain their ill-gotten wealth and the taxpayer will foot the bill.
If Paulson's proposal gets approved as it was submitted, he will become, arguably, the most powerful person (elected or not) in America! Section 8 of his proposal reads (italics mine):
Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
You'd better read that again. It is unbelievable! This act would give Paulson absolute authority over the entire US Financial Services industry, a $700 billion budget, and furthermore put him above the law! Under this proposal, there could be no review of anything he does by the courts or by the administration!
Goodbye free markets. Goodbye capitalism as we now know it.
What kind of society isn't structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system. -Milton Friedman, economist.
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