AIG Bailout

Now that our government officially owns almost 80% of the American International Group, for all intents and purposes nationalizing a significant portion of the insurance market, can we stop pretending that socialism is the devil? We already have socialism; it's just corporate socialism.

As Steven Brant noted, discussing the use of 'cost plus' contracts by arms manufacturers, in which those businesses are guaranteed a profit regardless of the project's outcome, "There is no Capitalism in the Military Industrial Complex. It's all Socialism, justified by the concept that these weapons are so important to American security that the companies that manufacture them have to be guaranteed a profit, so they don't accidentally go out of business." As Milton Friedman said, the drug war (and the attendant prison-industrial complex) is similarly socialistic.

What we have experienced in America with the subprime mortgage crisis is the "privatization of profits and the socialization of risk." The denizens of the corporate world get to undertake extremely reckless business ventures (i.e. sub-prime mortgages) and when their shortsighted short-selling blows up in their faces, they get massive, taxpayer funded bailouts because they're "too big to fail." The CEOs that piloted these corporations into the ground...they get million dollar bonuses. On the other hand, when people's houses are foreclosed as a result, they get told to 'pull themselves up by their own bootstraps' because they shouldn't have taken on loans they couldn't pay. And this whole time I thought that the American public was "too big to fail."

Finally, a nobel prize winner in economics is willing to admit what every fan of The Boondocks knows already, that Ronald Regan is the devil. Not in so many words, but essentially, the market de-regulation that he presided over led to the current crisis. Joseph Stiglitz said, "During his reign as head of the Federal Reserve in which this mortgage and financial bubble grew, Alan Greenspan had plenty of instruments to use to curb it, but failed. He was chosen by Ronald Reagan, after all, because of his anti-regulation attitudes...Our country has thus suffered from the consequences of choosing as regulator-in-chief of the economy someone who didn't believe in regulation."

I'm not sure what the etymology is of laissez-faire, but I'm pretty sure it has something to do with lay off our profits and get fucked. Take that you Ayn Rand fans.