Capitalism and Racketeering 101

President George Bush in the lead up to the G20 meeting in Washington on November 16th grandiloquently lauded his defunct administration’s disastrous war on terror and made-in-USA global economic melt down. His speech came with a warning: Don't disturb capitalism.

Bush said: "In the wake of the financial crisis, voices from the left and right are equating the free enterprise system with greed, exploitation and failure. It is true that this crisis included failures, by leaders and borrowers, by financial firms, by governments and independent regulators. But the crisis was not a failure of the free market system. And the answer is not to try to reinvent that system."

Bush of course is right. The crisis is not a failure of the free market system. It functioned superbly, just as it is designed to do, to rip off and exploit workers and the poor and transfer the stolen wealth to the wealthy and powerful elites of the world. Capitalism 101!

Bush delivered his remarks with his trademark smirk and swagger in the full knowledge his insider cronies were listening and appreciated the in-joke that they had just put another one over on the capitalist world. The routine is; first create chaos in the system and then pass legislation to make the taxpayers pay for the mess so it can be done all over again. Global racketeering 101!

Right on cue Finance Minister Flaherty supported Bush on all counts stating; "The open market system did not fail in this crisis. However, some forgot Adam Smith’s maxim that the invisible hand needs to be supported by an appropriate legal and regulatory framework.”

There was a regulatory framework; the artful handiwork of Allan Greenspan former Chair of the US Federal Reserve and Henry Paulson former CEO of Lehman Brothers and now U.S. Treasury Secretary who actively promoted changes in the rules of the US Securities Exchange Commission that permitted investment insiders without oversight to trade quasi-legal derivatives and hedge funds, (betting with borrowed stocks and leveraged money) many times global GDP.

The global Ponzi scheme was promoted globally enmeshing Canadian banks and the Canadian Pension Plan Investment Board. Underpinning the whole stratagem was the hard work of the U.S. people attempting to buy homes they were encouraged to purchase at sub-prime rates. When working class families confronted high rates of interest, hidden like time bombs inside the sub-prime contract, millions couldn’t pay. Many others who could pay lost their jobs. The whole system began to crumble.

What is the penalty for global insider investor racketeering? Capitalist governments that give billions from the public purse to the same investors and banks so they can do it all over again.

Left Turn Canada!