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| Home Front Economy |
| America, where swindlers meet liberals |
| 2008-10-02 |
| The idea behind state intervention into the otherwise free market economy is leveling crises. But there is another side: market participants come to expect the crises to be leveled, and swing the market unreservedly. This is especially true for huge companies: they are implicitly assured of the government support, lest they fail, layoff many employees, and send shock waves through markets. Huge corporations can, therefore, assume higher risks: while they succeed, their profits are above average and they grow relative to smaller companies; when they fail, they are assured of bailout. Such a guaranteed status brings to them customers and investors who seek government-like safety with market returns. They are basically a fraud: the government subsidizes customers and shareholders of very large companies with taxpayer money. Fannie Mae and Freddie MacÂ’s operating profits ran into tens of billions of dollars during the years of the real estate bubble; its top officers received hundreds of millions of dollars in bonuses. The taxpayers are left with two to five trillion dollars in bad debt. Here the interests of liberals and swindlers meet. Liberals want businesses to embrace social agenda rather than pursue profits. Such agenda is by definition unprofitable, or it would have been taken on and solved by free market already. Unprofitability can be solved by rising prices or lowering risks. In the American phantasmagory, liberals tax the commoners to increase the big businessesÂ’ profits by providing them with government guarantees. |
| Posted by:g(r)omgoru |