By Tom Eley
15 October 2008
The breakdown of the US financial system and the government bailout of Wall Street have seriously discredited the ideological justifications of capitalism.
Worship of the “free market” has long been something of a secular religion in the US. Capitalist ideology has proclaimed that the market’s “invisible hand” will best advance the interests of historical progress, that taxes on the rich and regulations on big businesses must be reduced because only the “risk-takers” know where resources can best be allocated, that any sort of government intervention to improve the living conditions of workers, the poor, the elderly and jobless youth creates a “climate of dependency,” that government cannot simply “throw money” at problems, etc., etc.
All these shibboleths now stand exposed as rank hypocrisy, as the biggest financial institutions belly up to the public trough. Yet amidst this historic crisis of the capitalist system, some of those opposed to Treasury Secretary Henry Paulson’s Wall Street bailout have claimed that the measures employed are “socialist.”
Suddenly—17 years after the Soviet Union’s collapse and the supposed “death of socialism”—the “S” word is being bandied about by American politicians and media pundits.
Charges that the Wall Street bailout is socialism have come most frequently from the far right wing of the Republican Party. To note a few examples, Congressman Jeb Hensarling, a Texas Republican, claimed that Paulson’s plan may put the US on, “the slippery slope to socialism.” Representative Sam Johnson, also of Texas, warned, “As a relentless supporter of free enterprise, I fear we are rushing headlong into socialism.” Senator Jim Bunning of Kentucky called Paulson’s measures, “financial socialism” and “un-American.” Congressman Thaddeus McCotter of Michigan even compared the bailout to the Bolshevik Revolution of 1917.
The claim that the Wall Street bailout is a socialist measure is absurd on its face. Paulson, the former CEO of Goldman Sachs, who has an estimated personal fortune of $700 million and is a member of the most right-wing administration in US history, has authored a bill that will ultimately divert trillions of dollars to the coffers of the biggest banks in the land. This is socialist?
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