Republican Capitalism Is Dead

Trickle-down economics is a myth, a fraud, and it's dead. Arianna Huffington seconds that emotion.

"The collapse of Communism as a political system sounded the death knell for Marxism as an ideology. But while laissez-faire capitalism has been a monumental failure in practice, and soundly defeated at the polls, the ideology is still alive and kicking.

The only place you can find an American Marxist these days is teaching a college linguistic theory class. But you can find all manner of free market fundamentalists still on the Senate floor or in Governor's mansions or showing up on TV trying to peddle the deregulation snake oil."

Let's end what Ronald Reagan started and Bush finished us off with. Arianna continues:

"It's time to drive the final nail into the coffin of laissez-faire capitalism by treating it like the discredited ideology it inarguably is. If not, the Dr. Frankensteins of the right will surely try to revive the monster and send it marauding through our economy once again.

We've only just begun to bury the financially dead, and the free market fundamentalists are already looking to deflect the blame.

In a comprehensive piece on what led to the mortgage crisis and the subsequent financial meltdown, the New York Times shows how the Bush administration's devotion to unregulated markets was a primary cause of our economy to ruin. But the otherwise fascinating piece puts too much focus on the "mistakes" the Bush team made by not paying attention to the warning signs popping up all around them.

"There is no question we did not recognize the severity of the problems," claimed Al Hubbard, Bush's former chief economic adviser. "Had we, we would have attacked them."

But the mistake wasn't in not recognizing the "severity of the problems" -- the mistake was the ideology that led to the problems. Communism didn't fail because Soviet leaders didn't execute it well enough. Same with free market fundamentalism. In fact, Bush and his team did a bang-up job executing a defective theory. The problem wasn't just the bathwater; the baby itself is rotten to the core.

Even more sinister is the Federal Reserve. While unregulated markets will tear themselves limb from limb, the Fed sets up the bubbles to acerbate the pain. Throughout history, from the 1929 crash, to 1980s stagflation, to the S&L scandals of the 1990s to Greenspan's sub-prime scam we're living though now, the Fed is at the bottom of it.

Remember, the Federal Reserve is no more federal than Federal Express and was set up as the central bank in 1913 by the banks themselves. Maybe it's time we start looking at changing those 90 year-old institutions.

Source: HuffPo