In short, the horror story collapses as soon as anyone gives it any serious thought. The Wall Street gang can hardly be faulted for trying cheap scare tactics for pushing its agenda; after all, it worked so brilliantly with the Tarp (troubled assets relief programme), two years ago. At the time, the plot line was that unless we immediately gave all our money to the Wall Street banks, with no questions asked, then the whole economy would collapse.
The government turned over not only the $700bn in Tarp money, the Fed also made trillions of dollars of secret loans to the Wall Street banks, as was revealed last week. This support, including guarantees that may have been even more valuable, allowed giants like Citigroup, Goldman Sachs and Morgan Stanley to survive the financial collapse that they had helped to create. As a result, bank profits and executive bonuses are higher than ever.
In short, Wall Street has a proven winning strategy. Come up with an end-of-the-world horror story, get the Washington Post, National Public Radio and other media outlets to hype it endlessly, and then watch the politicians rush to hand over the taxpayers' money. Their next horror story will, no doubt, be the most frightening yet.
Dean Baker, Guardian
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