(Our series on bailout transparency continues with economist Rob Johnson, formerly a managing director at Soros Funds Management and chief economist of the Senate Banking Committee. Please welcome him in the comments — jh)
The myth of the free market as distinct from the government has just crashed and imploded. So has the myth of Horatio Alger that one can ward off fear by just putting your head down and keeping government out of your hair. Government has not, even now, erected adequate boundaries vis a vis taxpayer money for the financial sector and the excesses of the financial sector have exploded Horatio Alger. Alger has been blown off his moorings due to no fault of his own. Yes Horatio, you can be destroyed by the actions of others and it is the role of government to set up a context which maximizes your "freedom to" while giving you the most "freedom from" harm by others.
Wall Street has not just spilled all over onto our economic well being. The harm is enormous. The interest on the debt on 2.5 trillion of losses could pay for national health insurance forever!! Wall Street firms were the architects of the rules that fomented the explosion. A look at the role of money in politics, the actions of Congress and successive White House inhabitants, both Democrat and Republican, and the army of scholars who have confected visions of economy that resemble marketing programs for Wall Street rather than analysis of the financial economy suggests a conscious strategy to unshackle finance from the government, all the while maintaining the downside protection of the taxpayers.
So now the question has changed. It is not what happened. It is what, as citizens and activists, do we do about it?
And don’t forget to sign the petition: No More Dough Til We Know Where It Goes