Tuesday, September 30, 2008

$1.2 Trillion Stock Loss

The bailout failed (for now) and the Dow plunged 777 points. Whoa! This is the biggest one-day plunge in market value in the history of capitalism.

The House rejected the bailout 228-205 and the financial industry is said to be in a dire crisis.

Ummmm ok. So for years every capitalist and his sister has shouted about free markets and competition and the resilience of markets to sort out the chancers from the main actors.

Now we are told that the system broke somewhere along the road to capitalized Nirvana and the stuff is hitting the proverbial fan (though please don't say the US is in a recession).

So what does Bush want from $700 billion of taxpayers money? A news article put is this way:

"The legislation ... allow(s) the government to buy bad mortgages and other sour assets held by troubled banks and other financial institutions. Getting those debts off their books should bolster those companies' balance sheets, making them more inclined to lend and easing one of the biggest choke points in a national credit crisis. If the plan worked, the thinking went, it would help lift a major weight off the national economy, which is already sputtering."

What kind of free market capitalism is that? Buying out bad debts and nationalizing banks sounds like, ummmmm state directed socialized capitalism or rather, communism.

And this from an administration that represents a party of mostly white wankers who derive ideological inspiration from the notion that smaller and less intrusive government is a democratic value.

Ahhhhh ... the smell of bullsh*t is in the air as the wheels come off the nonsense that neo-liberal capitalism is a free market system.

Where is the free in a $700 bailout that asks taxpayers to save greedy bankers who did not have their interests at heart in the first place?

I don't expect that Bush will not get some kind of bailout in the next few days. The players in Washington know that this is an existential crisis for capitalism.

In a very real sense though this is the beginning of the end for American style capitalism. And not a day too soon.


Chart Credit and Picture Credit


Rent Party said...

Existential crisis, that's about right.

Dade said...

Excellent big picture analysis, Ridwan. I agree. This thing they have called "capitalism" is really plutocracy. That is, it is government by the wealthy. It only worked when those at the top were smart enough to keep the middle class placated with material goods and leisure. Now, with everything falling apart, the plutocrats are scared sh*tless.

Ridwan said...

Rent Party and Dade thanks kindly for your respective comments.

I am amused by folks in the media who are trying to explain to citizens how the failed bailout will impact their lives.

'Be very afraid and if you are not here is why' ... :)