Wall Street Socialism Revisted

(Wall Street Socialism has a new heroine; image found on website of Tsega Dinka, here).

When I wrote about Wall Street Socialism earlier this year earlier this year I little thought how far it would go. The bailout/buyout of Bear Stearns, it turns out,  wasn’t so much a solution to the current crisis as a prototype for future action. Now we have the re-nationalization of Freddie Mac and Fannie Mae, and the bailout of AIG (and can the auto industry be far behind?). No wonder  Matthew Yglesias was reminded of Lenin’s New Economic Policy in “which a market economy exists on small scales while the state controls the ‘commanding heights’ of heavy industry and finance.”

In the spirit of the new order, I thought I’d share this delightful mock-poster, which captures the mood of the moment quite well. (I haven’t been able to track down who did the image, which appears on a number of websites). Fortunately, if we need more socialist realist art (and statues of Lenin), they can still be bought at discount rates from many nations in the former Soviet Union.

Lessons from the Current Crisis

I’ve gathered together my thoughts on Wall Street Socialism, developed as squibs on this blog, into a National Post op-ed, available here. As they say in the vulger jargon of the blogosphere, this is the money quote:

The current crisis is pregnant with political and economic lessons. The problem with Wall Street Socialism is not just that it’s hypocritical but that it doesn’t go far enough. The Federal Reserve has already tossed a trillion dollars into the market in a futile attempt to stop the current crisis from spreading; much more will be spent before financial health returns. 
 
If we can afford socialism for the rich, we can certainly also have socialism for the poor. If government is needed to bail out the rich in times of crisis, let’s have a more sharply progressives tax structure, so that the beneficiaries of the current system who are so sheltered from risk pay their fair share. If the state is so willing to intervene to protect the financial status quo, there is no justification for the increasing income inequality that has characterized contemporary capitalism.