What could cause Americans and their government to toss aside our fundamental principles of economic liberty, and begin a radical process of socialization of American business? What could cause us to accept trillions of dollars in new public debt to bail out failed industries and businesses? Why would we go along with institutionalizing the privatizing of gains, and the socializing of losses?
As a society we fear the results of a recession more than we fear our loss of liberty. We fear the effects of losing our jobs now, or seeing our 401k balances decline, more than we fear the consequences of massive taxation and/or inflation down the road. We fear what might happen to us now, more than we fear what might happen to our children in the next generation.
Fear is a powerful motivator, and this fact is not lost on those who benefit from it these days. We are told that absent these bailouts and absent this unprecedented deficit spending, the world as we know it will all melt down. It will be a “catastrophe.” The credit markets will “freeze up.” We will have a horrible depression. Etc, etc, etc. Cats and dogs, living together.
Recall that the first massive bailout bill was killed by an outraged public. But after Congress rejected it, the stock markets started falling, and all the Wall Street parasites began screaming for help. They sent their lapdog Hank Paulson back to Congress (he having already completely sold the President on his scheme) to change some minds.
After Mr. Paulson’s secret sessions with members of Congress, enough votes were changed to pass the bill, which of course did nothing to stop the inevitable economic recession, but did put the public trillions of dollars into debt for the benefit of Wall Street.
According to at least two members of Congress, Republican Oklahoma Senator James Inofe and Democrat California Congressman Brad Sherman, Mr. Paulson insisted that unless the bill was passed the markets would drop thousands of points, and, most incredibly, there would be a risk of martial law.
Unless the public caves to the demands of Mr. Paulson and his band of thieves, then the military will take over the country?
Fortunately Mr. Paulson is now gone. No doubt he is somewhere enjoying the hundreds of millions of dollars he made at Goldman Sachs. Unfortunately, he has been replaced by Timothy Geithner, a Paulson protege, and former President of the N.Y. Fed.
No doubt Mr. Geitner, following the lead of Mr. Paulson, will pretend to understand this complex situation in ways that mere Presidents and Congressmen and citizens could never hope to. They, being almost entirely clueless on matters of economics and monetary policy, will in turn endorse whatever he suggests.
In times like these, we do indeed have to fear fear itself.
Appendix: Here is an amazing CSPAN clip of Rep. Paul Karjorski describing Mr. Paulson’s pitch. He insisted that without the immediate bailout the world economies would collapse within 48 hours. http://www.youtube.com/watch?v=pD8viQ_DhS4