A Wrest Coast Perspective

Capitalism...Not!

by Frank Darbe
The enduring myth repeated ad naseum in the main stream press is that we are a Capitalist society. Of course, that's a lie. The bailout of Freddie Mac and Fannie Mae, is proof that the US is not now and has not been a Capitalist nation since at least sixties.

As reported in Bloomberg, Freddie, Fannie Failure Could Be World `Catastrophe'. That is big stuff, world catastrophe I mean. What Yu Yongding, former adviser to China's central bank, really said was:

quote:

"If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic,'' Yu said in e-mailed answers to questions yesterday. "If it is not the end of the world, it is the end of the current international financial system.''

But what about the idea that any financial system within a capitalist society must be allowed to react to market forces? Failure of a hot-dog stand on the corner or a major bank occurs within capitalism when they fail to compete. Propping up such institutions would be anti-capitalistic and violate the core principals of capitalism. And, of course, we seem to have been given our marching orders by Communist China that have loaned us vast amounts of money so that we can fight our wars and buy their products. But we, the man on the street, will benefit form this, right?

The beneficiaries are really the big central banks of the countries that have loaned the US vast amounts of money. If Fannie and Freddie fail, the central banks fail. If those central banks fail, there goes the neighborhood. Closer to home, if Fannie and Freddie fail, the stockholders in these 5 trillion dollar enterprises loose their investments. The little guy, who these mortgage giants loaned money to who are loosing their homes aren't affected. Those homes will be sold at auction. Those little people will be homeless. But the new purchasers can got to Fannie and Freddie to get loans, this time right from the tax payers and the pockets books of Americans. And if Fannie and Freddie fail anyway, we will be holding the bag.

No, we are not capitalists. A system where the government and corporations collude is called Corporatism. Corporatism is a fascist ideology, practiced in Italy before World War II. We are a country with a government that bails out big corporations because they are too big to fail and leaves the average citizen to wallow in poverty.

Don't get me wrong. I'm not saying that it would be easy on us to let Fannie Mae Freddie Mac fail. Such a failure will bring incalculable suffering. I am saying that we as a nation and individuals should be aware of what we are.