Photo by: Robert Linder

If anything consequential comes out of the Federal Government’s recent decision to spend nearly one $1 trillion of taxpayer money to prop up failing American financial institutions, I hope it’s this: that the word “socialist” is never used by Republicans to describe Democrats again.

Over the past few months on various blogs have I seen Conservatives and Republicans bash Democrats for tending to be socialist, especially when it comes to describing the health care plan of Barack Obama, pumping fear into the minds of middle class Americans, warning them that nobody wants socialist, or government-run healthcare.

Yet now, when the seeds of mismanagement, deregulation, and greed are finally coming to bear and manifesting as the current US “financial crisis,” George Bush, Henry Paulson, and Bush’s economic advisers are injecting an unprecedented amount of money into our financial system to buy out gobs and gobs of “toxic debt,” in a last-ditch effort to right a sinking ship. Don’t get me wrong, there are plenty of Democrats on board with this measure as well, but the entire thing stinks of hypocrisy to the highest degree.

Wall Street types and Conservatives love the free market and want Government out of their business as much as possible. Wall Streeters and other “top-down” economists love to fashion themselves as bootstraps kind of people, wheeling and dealing on the last frontier of free enterprise. Except when they get themselves into trouble, and they come running home to mommy and daddy like a trust-fund baby who wrecked his Lamborghini.

Now the Capitalists and their proxies in Congress and the Government are bending over backwards to send more money their way, only this time it’s our money, your money, going into the market like a firehose to correct their poor decisions. Was there a referendum on this decision? Do Middle Class Americans really have the emergency funds hiding in their mattresses to donate to fat cat Wall Street tycoons in order to give them another try at making an extra million?

A New New Deal?

The important thing to realize here is that this money, this $700 billion, is our money, that we don’t even really have in the first place. In fact, in order to pay for the whole thing, the Federal Government has asked Congress to once again raise the Federal debt ceiling from around $10 trillion to nearly $12 trillion dollars. So let me get this straight: my free-wheeling neighbor has been reckless in his financial decisions and now wants me to lend him money that I don’t have so he can go back to his corner office on Wall Street and sock away millions more that I will never see returned to me? And in order to make this loan, I’ll have to basically write a credit card check out to him but first ask my credit card company to raise my credit limit because I too am currently out of money? In this scenario, my two year old daughter will be paying the minimums on my debt until the day she dies without making a dent in the principal

I certainly don’t have the answer to this problem, but I know this…you can’t solve a problem with the same mind that created the problem in the first place. In other words, the same bunch of economic wizards who allowed this whole thing to happen are the ones coming up with the solution to the problem, using the same manner of thinking that created the problem back at square one. Bush, Paulson, Bernanke, the Wall Street lobbyists, the disgustingly overpaid Wall Street CEOs, all at the table coming up with this latest scheme to empty the American coffers in order to continue to enrich a tiny percentage.

Within about a week, the Government executed a knee-jerk response to a problem that Bush, Paulson, and Bernanke have been denying and hoping would go away for over a year, if not more. How many times have we heard Bush describe our economy as “fundamentally sound?” Even Sarah Palin’s Running Mate has gotten into the “fundamentally sound” game, describing our economy in those words the exact same day the market dropped over 500 points and brought on the conditions that called for the Government’s intervention. If fundamentally sound means that emergency steps must be taken at the tune of almost a $1 trillion without any assurance of success, then I guess they were right. Wouldn’t it have been useful to bring other minds to the table in an attempt to create a lasting solution to this problem that not only helped the markets but also was aimed at providing relief for everyday Americans who have just been along for the terrible ride so far?

When FDR faced a similar crisis, which was more accurately an economic crisis as opposed to the financial crisisthat we currently face, he enacted the programs of the New Deal, which attempted to created lasting solutions to the problems wrought by the Great Depression in a way that not only helped failing financial institutions, but also benefited ordinary Americans. Over the next 80 or so years, Conservatives in Congress and other lobbyists dismantled many of the programs of the New Deal, especially its systems of financial regulation, with only entities such as Social Security, the FHA, the FDIC, and the SEC, still remaining today. Enter our current “crisis,” man-made and entirely avoidable, if not for greed and the short-sightedness of Conservative economic policy.

“Too Big to Fail?”

The common retort to my line of thinking is that these institutions are too large to fail, and that the Federal Government can’t idly stand by and allow Goldman Sachs, AIG, and the others to go under. My answer to that is that the collective financial health of the American people is too big to fail too, but I don’t see any Government agencies rushing in to buy up my debt, or ease my health care payments by initiating Universal health care coverage, or adjust the housing market back to realistic levels by providing affordable government-back mortgages to all Americans, or alter bankruptcy laws to favor ordinary Americans instead of credit card companies.

Don’t get me wrong, I’m not looking for a handout from the Government to correct any mistakes I’ve made either. I’m not in favor of many of these Democratic-sponsored plans to protect homeowners from foreclosures, either. Why is it that I had the common sense to get into a mortgage that I could afford, that I had the common sense to read the rate disclosures, but now would have to spend my tax dollars to bail out somebody else who was less vigilant in their financial decisions? A little more accountability on everyone’s part could go a long way in this whole thing and we consumers share a burden of responsibility in this mortgage mess as well.

Truth be told, while I described this bailout as smacking of socialism at the beginning of this post, the reality is that it resembles fascism more than anything else:

Fascism: “A philosophy or system of government that is marked by stringent social and economic control, a strong, centralized government usually headed by a dictator, and often a policy of belligerent nationalism.” — The American Heritage Dictionary

The bottom line is that while I hope our markets weather this storm and our economy once again stands on solid ground, I can’t help but think that this latest move will ultimately cost a lot of money but do nothing more than continue to support financial institutions and their gigantic payrolls, profit-sharing programs, and exorbitant end of year bonuses, and simply leave the rest of us out in the cold with only the bill to pay for the next dozen or so generations.