The People’s Republic of Wall Street

October 2, 2008

The financial crisis may be the number one issue on US voters' minds, but there seems to be no leadership at work in Washington, comments Pepe Escobar. The Wall Street bailout rejected by Congress and then approved by the Senate may not be the solution. It's up to foreign analysts and economists to tell it like it really is. What is in fact being saved - capitalism or a banking oligopoly?

The financial crisis may be the number one issue on US voters' minds, but there seems to be no leadership at work in Washington, comments Pepe Escobar. The Wall Street bailout rejected by Congress and then approved by the Senate may not be the solution. It's up to foreign analysts and economists to tell it like it really is. What is in fact being saved - capitalism or a banking oligopoly?



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Story Transcript

PEPE ESCOBAR, SENIOR ANALYST, TRNN: I just came back from the People’s Republic of Wall Street—well, not quite, and not yet. Right behind me are the mercenaries at the service of finance capital. They’re busy finding ways to proclaim it, this People’s Republic of Wall Street. The national approval of these guys right behind me is now around 10 percent. There is no leadership in this town, economic and political. Don’t expect it from former lame-duck, now dead-duck, George W. Bush. As for John McCain, after charging his cavalry into the bailout negotiations, he started spinning that Obama politicized the whole thing, thus the collapse. Now McCain calls the whole negotiation a rescue. Obama was tepidly in favor of the bailout to begin with, then he said in action it would be catastrophic, and then he started to position himself as offering a new deal without actually putting a new deal on the table. Neither McCain nor Obama acted as leaders—they are so busy destroying each other as they both stand and deliver US taxpayers’ money to the usual financial suspects. But when investment banks are about to be turned into commercial banks to invent out of nothing and then loan money, no wonder ordinary Americans, they stage a revolt, even though most of their so-called representatives, and corporate media, for that matter, they tried their best to ignore them. But is there an alternative to Wall Street casino-socialism? If only America listened to a bunch of foreigners. Take economist Nouri al-Rubini. He was born in Turkey of a family of Iranian Jews and educated in Italy. He says the Bush-Paulson plan, even remixed, is a ripoff. It rewards the corrupt and it does not punish shareholders or management. Roubini warns that, I quote, "The shadow banking system is unraveling." Considering that the US is now run for the benefit of banks, as Roubini stresses, one can imagine the consequences. Ah, those pesky Europeans. [inaudible] another one. We should listen to Slovenian political scientist Slavoj Žižek—very respected in Europe, but in America he is only respected in academic circles. Žižek is saying that the main job of the dominant ideology is to impose a narrative that does not blame the capitalist system in itself, just the secondary and accidental deviations, like the crisis we have now. We should listen to German sociologist Robert Kurz. Kurz says that the last stage of state capitalism is now. That’s the end of the US as a global superpower, and that’s no more financing of preemptive wars with dollars that the US doesn’t have. And Kurz, he also stresses how state capitalism and free market capitalism are in fact two sides of the same coin. What has challenged in this crisis is not a model, as he says, to be replaced by another model, but the current mode of production as the common foundation of the global market. So what’s left of this bailout, or "rescue," as John McCain is calling it, whether the rejected Congress version or the remixed, Senate-approved version? Well, it’s about saving the current banking oligopoly; it’s not about saving capitalism. Corporate welfare rules in America and will continue to rule. The federal government spends over $100 billion a year subsidizing businesses. According to the Institute for Policy Studies, with a net of tax and accounting loopholes, the US spends no less than $20 billion a year subsidizing managers of hedge funds and private equity companies. They pay ridiculously low taxes—all this while, according to the inestimable Chalmers Johnson, the system spends hundreds of billions of dollars every year in fabulous payoffs to the military-industrial complex and very powerful senators and congressmen, embedded, all of them, with the Pentagon. Socialism in America, yes, but socialism of financial risk. The remixed Bush-Paulson-Pelosi-McCain-Obama bailout does not even touch campaign finance. Whenever a big corporation gives a few bucks to the right candidate, he will collect a few billions back in state protection, tax breaks, and subsidies. Are there other options? Yes. Check mega-capitalist George Soros. He is saying US banks should be recapitalized, and crucially that would cost even less, it would be much less costly, to taxpayers. That’s also exactly what Uwe Parpart, the chief Asia strategist for Cantor Fitzgerald Hong Kong, told Bloomberg. And Parpart goes beyond, in terms of earth-shattering global repercussions. In his own words, the Asian model is dead. That’s the model where Asia’s manufacturing with cheap labor, they ship everything to the US, they collect tons of money, and then they ship the money back to the US and Wall Street plays with it. Anyway, the US establishment is about to rubber-stamp the Bush-Paulson-Pelosi-McCain-Obama-Wall Street bailout—oops—rescue. No wonder an overwhelming majority of Americans are mad as hell and can’t take it anymore. Paraphrasing Shakespeare, the mood is: first thing we do, let’s kill all the bankers. But who’s to lead the revolt? Well, maybe sooner rather than later the Wall Street canyons and the green, green pastures of Washington, they will hear the mighty roar: we want a true American leader.

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Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy.

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