AL wants to know if the current economic crisis was engineered:
I’m not normally one for conspiracy theories, but expansion of a socialist government usually involves nationalizing major industries, right? But it wouldn’t fit the American model of socialism to do it by fiat. Instead, it would be done Hollywood style: Run a monetary policy that causes the industry to go off the cliff so that Super Fed can “save” it by nationalizing the biggest players.
Is this plausible, or am I going too heavy on the sauce?
No, this is merely the result of the long, ongoing shift from a free market capitalist model, in which the private owners bear the risks and rewards of business ownership to a managed market corporatist one where the elite owners and managerial reap the rewards while transferring any losses to the taxpayers. This naturally has the effect of creating a strip-mine mentality, wherein the elite must make hay while the sun is shining. As anyone versed in Keynesian economics knows very well, the model isn’t a sustainable one but it is justified by those who benefit from it because in the long run everyone is dead. Unfortunately for today’s Americans, the long run is arriving at last. As Spengler has repeatedly pointed out, this crisis no surprise and anyone who understands the demographic basis of American finance knew it would happen sooner or later. The babyboomers were always bound to break the system, that they should so richly merit the concomitant suffering from its collapse is merely the icing on the cake.
These bail-outs – and there will be more – are not intended to be long-term fixes nor is the transference of corporate ownership to the American people the long-term goal, they are instead the equivalent of propping up artificial lighting so that the hay can be harvested as long as possible. The inevitable collapse will be delayed until the harvesters can safely head for the exits. What comes next is unknown. History suggests a conventional strong-man dictatorship in one ideological form or another but it would appear that the structure of the North American Union is intended to prevent that from happening.
The reason AIG, Fannie, and Freddie were bailed-out while Lehman was not is because the Lehman failure would not end the harvesting. Merril Lynch wouldn’t have been bailed out either, even if it hadn’t been purchased for quarters on the dollar. But the three other failures might have brought about the end game due to the nature of the investments they were supporting. Don’t worry, it will happen soon enough, although not tomorrow, next month, or even next year. The market forces take time, especially when powerful organizations are desperately trying to stave them off, but they always win in the end.