Tag: Henry Paulson

Another reason why the omnipotence of “wealth” is more certain in a democratic republic is that it does not depend on defects in the political machinery or on the faulty political shell of capitalism. A democratic republic is the best possible political shell for capitalism, and, therefore, once capital has gained possession of this very best shell…, it establishes its power so securely, so firmly, that no change of persons, institutions or parties in the bourgeois-democratic republic can shake it. — Lenin, State and Revolution

The cascade of financial failures on Wall Street — the sure result of a decade or more of unregulated, unrestrained capitalist speculation — has shaken the world capitalist system with a sudden, shuddering spasm  of fear. But with fear comes opportunity, and the ruling elite now sees an opportunity to cast off the shackles of messy public oversight and control entirely.

If one were looking for the utmost in financial irresponsibility, allowing the system to implode/explode, paving the way for socialist revolution (or failing that, a fall into post-Roman-Empire-like darkness), then you’d put Bush and his cronies, like Treasury Secretary Henry Paulson, in charge of a supposed “bailout” plan for Wall Street. That’s because the Bush-Paulson plan, by turning over unrestricted control of nearly a trillion dollars of a running tab, while handing the gargantuan bill over to an already deficit-weary taxpayer, will totally eviscerate the public sector of the economy, and pave the way for the complete impoverishment of the wide spectrum of the society. (Naomi Klein has described this process accurately in her widely-read book, The Shock Doctrine.)

This morning, Treasury Secretary Henry Paulson formally announced his grand scheme to use America’s economic mess to consolidate power in the hands of the few, the economic pillagers at the Federal Reserve.

Under the guise of “increasing” regulation, Paulson’s scheme seeks to abolish the last vestiges of New Deal oversight on the U.S. economy and complete the deregulation of Wall Street. Paulson proposes nothing less than economic shock therapy to the U.S. financial sector. As The Guardian notes in its coverage of Paulson: “Big banks saw little to fear in the blueprint.”

From The New York Times: White House to Seek New U.S. Power to Keep Markets Stable

The Bush administration will propose on Monday that Congress give the Federal Reserve broad authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.

The proposal is part of a sweeping blueprint to overhaul the country’s hodge-podge of regulatory agencies, which many specialists say failed to recognize rampant excesses in mortgage lending until after they triggered what is now the worst financial calamity in decades.

I think this is precisely what Naomi Klein warned about in her book, The Shock Doctrine. I suspect the Bush administration is going to try to use the shock of the collapsing economy to quickly deregulate the entire economy to make it easier to loot.