Does a Financial Oligarchy Run Our Country?
Simon Johnson, an economist and a former Chief Economist for the International Monetary Fund (IMF), recently wrote a great article called The Quiet Coup. In the article, he compares our current economic situation to past economic situations he encountered at the IMF with emerging market countries such as South Korea and Argentina. The situations are strikingly similar. The IMF’s advice to the emerging market countries: break the financial oligarchy that is blocking essential reform. Why are we not doing the same?
Instead, The Treasury Department and the Federal Reserve is doing what it can to get back to the status quo - to essentially preserve and protect the financial oligarchy. The financial oligarchy is dedicating policy right now. Just consider this: Bank of America complains about something and gets more bailout money; AIG threatens to collapse the financial system and gets more money. The financial oligarchs tell Treasury and Fed to jump and Treasury and Fed respond with “how high”.
Contrary to what President Obama is saying we are not meeting this financial crisis “head-on”. Doing so would require inflicting some level of pain on financial conglomerates and the financial oligarchy. Instead, Treasury and Fed are doing what they can to rid the balance sheets of the financial conglomerates of the “toxic asset” that they created and bought. We have a situation where, if (big if) Secretary Geithner’s plan is successful, financial conglomerates, and the financial oligarchy the operates them, is allowed to go back to operating like nothing every happened. The only lesson learned is that the government will always be there to bailout the financial oligarchy and the financial conglomerates. This is a perverse form of socialism: privatize the gains and socialize the losses.
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