The Nation: The Fannie Mae/Freddie Mac crisis strips the clothes off the Emperor of Markets

[marmar]

A Conservative Confidence Game
Comment
By Deborah Stone

September 9, 2008



Leave it to Fannie and Freddie to do for American politics what reasoned argument failed to do--strip the clothes off the Emperor of Markets. The fuss over whether government should rescue naughty shareholders was merely a distraction. What this latest financial crisis revealed is that "the government" and "the market" are not two distinct and separate parts of the country. They work together and need each other.

Ever since Ronald Reagan declared in his first inaugural address that "in the present crisis, government is not the solution to our problem, government is the problem," conservatives have been steadily privatizing government functions on the theory that free markets can do everything better. Education, medicine, criminal justice, social services, building and maintaining roads and bridges, supporting an army at war--you name it, it has all been contracted out to allegedly more efficient and innovative private enterprise.

Self-interest, profits and free markets, we have been promised, are the great social engines. Now, as the American housing market collapses and the world trembles before our mistakes, those profit-driven, supposedly self-correcting and perfectly efficient engines are turning against us like Frankenstein. Why did anybody ever believe that CEOs and shareholders whose every incentive leads them to seek greater profits would care about anything else, such as their purported government mission to foster homeownership and stable communities?

Maybe this is the ultimate lesson in why the Republican strategy of privatization and deregulation doesn't work. Markets depend on confidence--confidence that somebody stands behind the currency of exchange, confidence that somebody will hold buyers and sellers to their promises, and above all, confidence that if banks and big businesses crash, somebody will step in to help all the little people who might be wiped out with them. .....(more)

The complete piece is at: http://www.thenation.com/doc/20080922/stone

[mzmolly]

1. Yeah but Obama called Palin a pig.

:sarcasm:

I can't believe anyone is considering four more years?

[DCKit]

2. I trust his judgement. n/t

[mzmolly]

3. Heh.

:hi:

[crickets]

4. "...government is not the problem. Leadership is."

Truer words and all that.