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article imageOp-Ed: Saving the whole US private sector – Fed goes to work

By Paul Wallis     May 19, 2020 in World
New York - “Too big to fail” has returned as an expression. Now it’s being applied to America’s insufferable private sector, which hates big government and regulation of any kind. The Fed is saving the bacon, but the irony is unmissable.
The rather battered United States economy’s switching between crisis mode and maniacal demands to “Reopen!” is an indicator of how confused the situation is. As usual America’s political identity crisis is proposing both the right and wrong ways of doing everything.
As The New York Times reports, the Fed is shoring up the bulkheads between the financial market and Main Street, protecting investors by softening the impacts from the pandemic.
Before getting too sarcastic
• This approach is unequivocally the right way to reduce the otherwise massive financial hits of a big contraction of the economy.
• The financial sector has every reason to be scared to death of a sudden gigantic downturn. For a change, they’re not being hypochondriacs. A financial crash would take a large chunk of the US economy into the Badlands, fast. Recovery could take even longer than the GFC.
Now, some sarcasm
The financial sector single-handedly trashed the US economy in 2008. The sub-primes were one of the biggest scams in America’s less-than-squeaky-clean financial history. The banks, which should have been hit with multiple breaches of law, were bailed out. Not a word of acknowledgment from the private sector ideological skanks on this subject has ever been said.
Like the pioneers on the frontier, the financial sector went it alone – According to them, if not to a database of numbers similar to NASA. The calls for an end to big government and free enterprise continued, long and loud. The big hand-hewn log cabins in Manhattan are still there, too. Add a few coonskin hats, and you can see the sector’s image of itself.
Corporate America, that famously sensitive, humane, caring and downright altruistic culture, is also currently receiving help from the Fed. St. Francis of Assisi has nothing on the corporate guys, when it comes to caring. This is the same culture where some guys stood on top of a McDonalds throwing job applications (the modern equivalents of the Inquisition) into the street during the GFC. These are also the guys who’ve been demanding for decades that the minimum wage be as low as possible. These are fun people, always good for some more domestic poverty when you need it.
The ultimate irony is that these adorable woodland capitalists have been bitching about “socialism” for so long. America has never experienced anything like real socialism. What it did get, during the Depression, was the New Deal, Keynes, and FDR’s building program. You know - The one that gave America the infrastructure to fight and win World War 2, and become a super power. All Federal money.
Then there’s the “big government” thing. America has 320 million people. It’s no longer the 13 colonies, and believe it or not, basic administration for half a continent and so many people does require adequate governing. …Or would you prefer utter chaos? Can you fight a war with penny-pinching corporate bureaucrats? How about basic infrastructure, like that thing you drive on, water in the taps, etc.?
This national bailout is similar, and arguably bigger than the New Deal in terms of money. This is “big government to manage big things”. The idea that anyone or anything private or corporate can whip out their six-shooter with trillions of dollars to do these things is beyond absurd.
The Fed is saving America from itself and its worst, most self-destructive, delusions. This government reach is why the “United” States works at all. A national approach, not mere buzzwords from the deluded and shameless liars. Without it, this pandemic would be an un-disentangle-able multi-train wreck.
Don’t expect to see any acknowledgement of this process. Yet again, the guys in the penthouse log cabins and coonskin caps will have done it all themselves. How heroic can you get? Guess.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
More about Federal Reserve pandemic crisis measures, bailing out the private sector pandemic 2020, America's identity crisis, GFC bailouts, keynes
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