The Verdict on Free Market Capitalism

Here is Dean Baker's verdict on "free market" capitalism:

The media are busy perpetuating a myth that the United States has been a beacon of "free market" capitalism. This is a lie. The United States never had free market capitalism and certainly the system in place over the last three decades hardly qualifies.

The U.S. put in place policies designed to transfer income from the poor and middle class to the wealthy. This is most evident now with the hundreds of billions of dollars being spent bailing out the banks. For the last three decades, the banks and their top executives, made vast fortunes using a free government insurance policy called "too big to fail," under which bond holders and other creditors could lend money to the banks knowing that the government would honor their debts if they ever got into trouble.

It is an outright lie to call this a "free market." This is a huge government handout. This insurance policy is enormously valuable and the banks did not have to pay a penny for it. The banks are ardent opponents of free market capitalism. None of them have advocated that they be allowed to collapse.

Of course he is right. But there is an eerie silence in the media in the US. You don't see this discussed. Instead you find rantings about "nationalizing" the banks and how that is so un-American. You find the Republican party demanding that the "socialist" Obama back off and stop taxing the rich because it is the rich who will "save" the country. This is pathetic. Sadly, I don't see any groundswell against this idiocy preached by the media in the US. I guess the right wing propaganda has been drilled in so deep that nobody notices anymore.

What happened to the populism of the early 20th century that put a leash on the big trusts via anti-monopoly laws? Where did the popular agitation under Roosevelt for more government solutions to the complete collapse of the "free market" capitalism of Hoover?

Sadly, the American people are like members of Jim Jones' Peoples Temple. These members had listened to Jones' ranting for so long that they were willing to quietly drink the Kool-Aid and die. Similarly, Americans have listened to the propaganda of the Cold War about the wonders of "free market" American capitalism versus the evils of "socialism" that it has left the American people blind to their propaganda. It is funny, Canada is just across the border and it has a major social democratic (read "socialist") party. Europe has major social democratic parties that occasionaly gain power. These societies seem to work perfectly well. But Americans believe that harnessing the government to social movements is dangerous, "undemocratic", and ungodly. Just like those Peoples Temple members were convinced that the only option left was to drink the Kool-Aid.