BUSH AND MARKET SOCIALISM IN AMERICA

President Bush spoke yesterday at an unscheduled press conference. His hand was forced by increasingly bad news coming out of markets, and declining consumer confidence. How bad is it, you ask? Bad enough for President Bush to say with a straight face that providing bailout money to Freddie Mac, Fannie Mae, and IndyMac did not constitute a break from free market principles.

So let’s take a look at what President Bush increasingly believes a free market economy looks like.

GOVERNMENT INSPIRED CONFIDENCE … After telling us throughout his increasingly torturous tenure as president that the government is the problem President Bush told America yesterday they didn’t have to worry about losing their money to the problems that plague America’s largest banking institutions, like IndyMac. Why? Because the financial institutions adhere to sound business practices? Nope. Americans can remain confident about their money because “their deposits are protected by our government …”

GOVERNMENT SUBSIDIZED INVESTMENTS … And what about President Bush’s assertion that poor market performance and incompetence would eventually lead market players to discipline bad behavior? Forget about it. The president wants Congress to give the Treasury Department the authority to lend money to Freddy Mac and Fannie Mae which, together, hold or guarantee almost half of America’s $12 trillion mortgage debt. That’s the easy part. Then he wants to bailout private stock holders by having the American taxpayer purchase their collapsing stocks (presumably at “fair market” price).

FAVORABLE LEGISLATION … Then we have Sen. Richard C. Shelby (R-AL) claiming that there is a silver-lining because the banking system entered “into this episode extremely well-capitalized” and “extremely profitable.” Nowhere did Shelby mention that part of the reason for their healthy portfolios is that Congress long ago wrote the banking industry very favorable credit card and bankruptcy legislation that has worked to keep consumers on a debt-laden treadmill. And let’s not forget how abolishing the Depression Era Glass-Steagall Act in 1999 allowed private investors to get into the insurance and housing industries.

GOVERNMENT PROVIDED CAPITAL … Oh, and let’s not forget that the federal government made over $100 billion in credit and loans available to our nation’s financial institutions over six months ago, which they drew upon (at rock bottom interest rates), but neglected to lend out.

Let’s recap. When things go bad, the government (1) provides the security, (2) subsidizes investments, (3) will write favorable legislation that generates and props up profits, and then (4) provides capital to troubled financial institutions.

Somehow “market socialism” doesn't seem strong enough. With market bailouts, and the fact that President (Comrade?) Bush seems bent on tearing down our Constitution (with his FISA legislation), he and his republican friends in Congress seem hell-bent on creating another U.S.S.R. that only they benefit from … The United States of Socialist Republicans.

Bring your own Vodka. But don't worry. In Bush's U.S.S.R. the government will eventually subsidize the purchase.

- Mark