Not Just Wall Street … Corrupt Government Is At Least Half the Problem
Because government policy is ensuring high unemployment, it is not surprising that the Americanprotesters are angry at the Federal Reserve and other government institutions, and not just the big Wall Street banks.
Remember, Bush and Obama’s economic policies are virtually indistinguishable. Indeed, Obama actuallylikes high unemployment.
And as I noted in 2009, the government created the giant banks:
As MIT economics professor and former IMF chief economist Simon Johnson points outtoday, the official White House position is that:
(1) The government created the mega-giants, and they are not the product of free market competition
(2) The White House needs to “regulate and oversee them”, even though it is clear that the government has no real plans to regulate or oversee the banking behemoths
(3) Giant banks are good for the economy
Of course, the government has also made it policy to cover up fraud and protect the fraudsters, and so the free market has no chance to punish fraud or cleanse wrongdoing from the system.
Without government-created moral hazard emboldening casino-style speculation, corruption of government officials, creation of a system of government-sponsored rating agencies which had at its core a model of bribery, and other government-induced distortions of the free market, things wouldn’t have gotten nearly so bad.
Indeed, the government is so corrupt that the head of the economics department at George Mason University says that D.C. politicians are worse than prostitutes … they are “pimps”, since they are pimping out the American people to the financial giants.
And while co-option of government by the big banks is a huge problem, it is also true that corruption in government leads to corruption in the private sector. See this and this. The U.S. has truly become abanana republic, just like the worst Latin American countries.
So anyone who thinks that government would solve all of our problems if it were only freed from obstructionists is only seeing half the problem, and is falling for the oldest trick in the book … the ole’divide and conquer strategy.