New York Times columnist David Brooks explains the history:
…In the 1980s, the old power structures frayed, even on Wall Street. Corporate raiders took on the old business elite. Math geeks created complicated financial instruments that the top executives couldn’t control or understand. (The market for credit-default swaps alone has exploded to $45.5 trillion, up from $900 billion in 2001.)
Year followed year, and the idea of a cohesive financial establishment seemed increasingly like a thing of the past.
No more. Over the past week, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and Tim Geithner of the New York Fed have nearly revived it…
Professor Nouriel Roubini clearly did not fancy USSR too much:
…So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America ; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion…This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs. But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed – untempered by fear of loss or of punishment – leads to credit bubbles and asset bubbles and manias and eventual bust and panics…
Larry Elliot at Guardian expresses:
…Ben Bernanke, chairman of the Federal Reserve, and Hank Paulson, the Goldman Sachs tycoon who became US treasury secretary, have done more for socialism in the past seven days than anybody since Marx and Engels…
Willem Buiter at Maverecon reflects:
The end of American capitalism as we knew it… I almost decided to go back to bed, convinced I must be dreaming... From financialisation of the economy to the socialisation of finance. A small step for the lawyers, a huge step for mankind. Who said economics was boring?
Bankers, beware Captain Capitalism:
...I want to kill the bankers.
I don't mean that in a funny, ha ha, way. I don't mean that in a sarcastic way. I mean that in an old school American, wild wild west, you killed my father-prepare-to-die, deadly serious way. I literally want to grab my gun, get a lot of bullets, find some bankers, hunt them down and kill them. I even know the bankers I would hunt down. I know their names and where I can find them. I would do with a smile on my face. I would enjoy the action of it, I would savor it. I would go home and pour myself a well-earned drink and sleep just as soundly as I ever have, if not, probably better. I would not have one pang of guilt.