“What do we do? Exactly the opposite. We forget about the debt, let it explode. We reduce interest rates to zero to stimulate the economy. We pour money into the economy to get even bigger debts. We don’t privatize; we nationalize, except we don’t call it nationalization. We give it some other name, like “bailout” or something. It’s essentially nationalization without control. So we pour money into the institutions. We lectured the third world that they must accept free trade, though we accept protectionism.
Take the “too big to fail” principle, which the House committee is discussing today. But what does “too big to fail” mean? “Too big to fail” is an insurance policy. It’s a government insurance policy. Government means the public pays, which says, “You can take huge risks and make plenty of profit, and if anything goes wrong, we’ll bail you out.” That’s “too big to fail.” Well, that’s extreme protectionism. It gives US corporations like Citigroup an enormous advantage over others, like any other kind of protection.
But we don’t allow the third world to do that. I mean, they’ve got to privatize, so that we can pick up their assets. Now, these are happening side by side. Now, here’s the instructions for you, the poor people; here’s the policies for us, the rich people. Exactly the opposite. Is there any reason to think the IMF is going to change it?”
See Also: Three Possible Financial Narratives for the Obama Administration, Ideas and interests, Goldman CFO Viniar “Mystified” by Probes into Relationship with AIG, Taxpayer Funded GS Profits, Punishing The Successful Update, Democracy and Capitalism, The Quiet Coup, The Nationalization Argument, U.S. Taxpayers Raped Again, and The Banks’ New Business Model.