15 March 2008

What we want

Greg Palast published a great post yesterday highlighting the connection of the Eliot Spitzer fiasco to the sub-prime mortgage catastrophe that has destroyed the US economy.

I'm not an apologist for politicians that get caught violating their own public moral code, Democrats are as guilty of this as Republicans, however the timing of this revelation is quite suspect. On the face of it it seems simply designed to damage Hillary Clinton through association, as Spitzer is a strong supporter and had been mooted as potential VP material.

Palast draws a more interesting link between Spitzer's history of prosecuting banks involved in shady sub-prime deals, and Bush's Federal bail-out of a bank supporting the suddenly bankrupt Carlyle group, in debt to the tune of $16.6B as a result of the sub-prime crises and whose members include Bush Snr, the Bin Laden family, James Baker and John Major. The same day that Bush orders the bail out, the Spitzer scandal hits the news, and the one person in a position to ask tough questions about the bail out, and with a history of asking those questions, is conveniently neutralised. Jon Stewart on Wednesday commented on how angry Spitzer looked and sounded when issuing his apology, highlighting how odd that behaviour looked considering what he had just been caught doing. While Spitzer knew what he did was inexcusable, perhaps his anger stemmed from his understanding of why the story was leaked now, and by whom.

But then again I love a good political conspiracy theory.

One thing that is worth mentioning is that the Federal bail-out yet again demonstrates the huge hypocrisy that surrounds modern Republicans. For a president and a party that is anti-big government, anti-state intervention, and anti-public spending in general, they seem to do an awful lot of all three. Freidman would be turning in his grave at the thought of federal intervention in an ailing private bank; such destruction is an inevitable and natural part of a free market. The market will over time recover, and other groups will arise to take Bear Sterns' place. The thousands of individuals whose lives would be destroyed by its collapse are of no consequence to Freidman, such is the way of the market.

It seem that neo-conservative economic dogma is as flexible as conservative religious and moral beliefs for many Republicans, a set of clothes to be worn in public but not to be used in the privacy of their own home.


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