The Paulson Bailout happened so fast, who even noticed that while the "true conservatives" vituperated against this socialist move by the Bush administration, we all bought the political characterization. The negative connotation of Socialism immediately became the framing of the anti-Bush sentiment. We in the left, especially, were eager to tap the Schadenfreude of yet another chance to point out Bush's hypocrisy. Meanwhile, the conservatives call Obama socialist, and presto, they've associated Obama with Bush.
I had a Euripidean Revelation, then, when I stumbled across this nugget: Former Assistant Secretary of Treasury for Reagan and a former associate editor of the Wall Street Journal, Paul Craig Roberts, made the case recently on Democracy Now that the Paulson plan is, in fact, fascist.
AMY GOODMAN: Paul Craig Roberts, the piece you’ve written, one of them, asks, “Has deregulation sired fascism?” What do you mean?
PAUL CRAIG ROBERTS: Well, the original Paulson plan was to give the Secretary of the Treasury $700 billion with no accountability and give him complete control over the financial system. And that, of course, is state capitalism or fascism. If you control the financial system, you control the economy. And so, that was my way of pointing out the dramatic sort of power that was said to be necessary to stem a crisis that, in my view, could be fixed just by refinancing mortgages, like they did during the Great Depression.
Of course, fascism has other necessary conditions, which I'll get to. But it's an important point that the concentration of power in the executive branch is, in and of itself, a fascist move. While the ultimate result of the nationalization of these financial firms might be socialistic (assuming we all share in the upside), the actual administrative move, approved by congress, is, in and of itself, fascist.
Moving on to further conditions that should set our fascism alarms blaring, we can see that the money, power, and control under this bailout is concentrated throughout the upper class, especially the lobbyist class that pulls the executive levers. They are using their power to perpetrate a crime, exhibiting a blatant disregard for the law. If they can't change a law they don't like, they just break it, and dare anyone to do anything about it. After all, what can we do to a runaway executive branch? Arrest them? Aren't they the cops? Don't they have the guns? Who's going to arrest the ones who are supposed to do the arresting?
AMY GOODMAN: Who is driving this? Who framed this bailout? And explain exactly who it is who benefits right now.
PAUL CRAIG ROBERTS: Well, what the bailout does is it takes troubled financial instruments off the balance sheet of the banks and puts them on the balance sheet of the taxpayer at the US Treasury. So it’s a bailout of the financial institutions whose recklessness caused the problem. And as I’ve already said, it does not address the problem. It only addresses the problem of the banks. So the foreclosures and the defaulting mortgages will continue as the economy worsens, and yet nothing is being done to stabilize that default rate or to stop these foreclosures. So the money is essentially being poured into the coffers of Washington’s financial donor base.
This is not a complex problem. Follow the money. First you loosen it up. Then you swap it around. Then you say, "Don't worry!" Then you make it disappear. Then you ask for a refund. So exactly how do you steal the money the first time around?
PAUL CRAIG ROBERTS: [...] In 1999, in the Clinton administration, they repealed the Glass-Steagall Act. This was the Depression-era legislation that separated commercial from investment banking. In 2000, they deregulated all derivatives. And in 2004, Hank Paulson, the current Treasury Secretary, who at the time was chairman of Goldman Sachs, he convinced the Securities and Exchange Commission to remove all capital requirements for investment banks, and thus they were able to drive up their profits by amazing leverage. For example, when Bear Stearns finally went under, it had $33 in debt for every dollar in equity. So this is an amazing leverage. And it’s amazing that all reserves against debt would have been removed by the Securities and Exchange Commission. So, the whole thing is reckless beyond imagination. Now, they claim that they had new mathematical models that assessed risk and that they didn’t need these reserves. Well, that was all a bunch of hooey, as we now see.We were just conned out of yet another generation's taxes and we're supposed to settle for "oops"? Is this power grab more justified because they say it was an accident? We're supposed to think that after the systematic dismantling of regulations, starting in 1999 with the repeal of Glass-Steagall, that they were simply reckless? Asst. Secretary Roberts should be commended for his liberal view of the goodness of man. I don't share his forgiving nature. You don't have to be an expert on the Bush Administration to see what seems pretty clear: a federal prosecutor could make a career out of it. If something is "reckless beyond imagination," then it's likely to be illegal as well.
The religious component of pure corporate fascism is the God of the Market. Nothing rings the opening/church bells like the holy grail of 700 Billion Dollars. When searching for a definition to demonize for the Nationalization of Financial Institutions, the Republican Party once again associated "socialism" with "communism" while the opposite was true. This financial rein-seizing will do little to nothing for society as a whole. It will do everything for society at the Country Club. This is fascist plutocracy.
A unitary executive is one of the necessary conditions for fascism. Another is disregard for the rule of law. Another is hate. The "dirty-fucking-hippie" meme is being whipped up by the standard bearers of the Republican party right now, with their Christian Right zealots right behind, and you have the very model of a fascist system. Sprinkle in some racism, and they get their picture in the fascist textbook.
And yet we go on with the crude caricature that associates the Bush administration with leftist philosophy. Even worse, of course, is that all this framing takes our eye off the Ace in this game of political three card monty. While our heads spin with the dissonance of inaccurate name-calling and right-wing red meat keywords, they pass another trillion dollars in corporate welfare, concentrate more power into the executive branch, incite violence, ignore the law, and steal more money from our children. Anyone who dares to call what they're doing is singled out as a "hater" because they didn't mean to steal this money. They were just reckless.
The snake oil we've been sold was cranked out by computers, but it was just as slimy as what you could get off a wagon a hundred years ago. This isn't the first time that markets and the treasury have been gamed. And it won't be the first time that the guilty parties walk away, probably with presidential pardons.
Another of the right's favorite frames is "Who could have seen it coming?" As in, "Who could have predicted terrorists would fly planes into buildings?" Or, "Who could have predicted that Iraq didn't have WMD?" Or, "Who could have predicted that deregulation would lead to financial trickery?" In The Rise of the Machines, Richard Dooling points out that this latest crime was, of course, predicted.
Dooling goes on to make the case that the entire scheme is essentially one giant computer crime. Keep in mind that Paulson, as chairman of Goldman Sachs, convinced the administration (of which he was about to become a cabinet member) to obliterate the capitalization rule, the lack of which helped create the "crisis." Then, as Treasury Secretary, he engineered a "bail out" that makes us all pay, again. What gall they have to even ask that he have total control of the $700 billion! Well-connected corporate directors perpetrated the fleecing of America by sending their insiders and lobbyists to run the White House, aiding and abetting the crime. Looking at the Bush Administration as a whole, wasn't it obvious where this was leading? When it was said foxes were guarding the hen house, did we trust them in spite of knowing that foxes eat chickens?
Dooling, again, uncovers the crime:
Now these unrepentant financial terrorists sip lattes on the porches of their devalued McMansions, hung-over from their drunken spending spree, and they want us to pay for it all? They complain that Obama wants to take away their Bush tax cuts for the wealthy. They scream about socialism as if it's some evil to which even George Bush has sold out. They propose more tax cuts for themselves, and tax increases on the middle class. They demand cuts in social programs, education, and infrastructure investments. They want the people who stole our future in charge of the justice that protects it? That isn't just fascism. That's an insult.
It was nice to hear Colin Powell stand up for reason and dignity when he endorsed Obama. But in his comments to the press after the endorsement, he said it was wrong to call Obama a socialist. It was a lot like hearing McCain say Obama's not an Arab, as if being an Arab was evil. I'm not sure if Powell understands that the point is not whether socialism is bad, but that after the fascism of George Bush, it's hard not to move to the left, if only because there's no room left on the right.