"I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention", affirmed US President George W. Bush, in his September 24 television speech to promote the biggest corporate bailout plan since the Great Depression. "I believe companies that make bad decisions should be allowed to go out of business."
Then came the big "but".
"Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence, and major sectors of America's financial system are at risk of shutting down.
"The government's top economic experts warn that, without immediate action by Congress, America could slip into a financial panic and a distressing scenario would unfold", Bush said.
Contrary to some media claims, Bush isn't "going socialist". The multi-billion dollar socialisation of corporate losses is not a break from "normal" 21st century capitalist practice but an essential feature of it.
Modern capitalism totally depends on being propped up by public funds, and not only when it goes into crisis. Think of the corporate take from the trillions of dollars of public expenditure on roads and other infrastructure, the subsidies for private health insurance companies and agribusinesses.
The "free market" talk disguised the fact that more public money has been spent on tax cuts for the corporate rich and on corporate welfare, bailouts being only a part of this.
Myths about the economy thriving on individual effort and reward belie the actual history of the capitalist system. Capitalism developed only through the socialisation of human labour. Almost every product is the result of collaboration between large numbers of workers. Without this socialisation there would not be a single capitalist corporation today.
Today, the giant corporations even depend on a sort of tax on wages to amass huge amounts of capital, to take over other corporations and become even more gigantic. They use our superannuation funds for this. You thought it was your money, but they always see it as theirs to play with.
The rational thing would be to put an end to this nightmare born of greed. If the public has to socialise the banks' losses then it should socialise the profits and put the money to addressing urgent social and environmental needs. This isn't just a nice idea, it is what humanity needs.
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