ZeroHedge says Dubai never even remotely resembled capitalism and makes some telling points, detailing what led to the imminent Dubai default on debt:
A total discount of the importance of institutional strength
A deleterious disregard for even the most basic fixed cost analysis
U.S. levels of entitlement accounting delusion
Something approaching a wholesale overappreciation of local construction and engineering competence
An oddly willing embace of perpetual growth valuations
The only real question anymore is: Why was anyone surprised?
They quote Finemrespice, and their “Redefining capitalism to suit anti-capitalists.” (Golly, these libertarians are just so darned touching in their belief that real capitalism is wondrously good and what happened was an abomination and distortion of that. But then, it’s been libertarians who have doing the digging into the real estate crash, Goldman Sachs, the banksters, and our corrupted financial system in general. The left sure hasn’t. So, despite my mild snarkiness, I applaud what libertarians have been doing in exposing the evils of the current system.)
It defies explanation how a state with debtors’ prisons, no bankruptcy proceedings to speak of, slave labor punctuated by the seizure of workers’ passports and brazenly broken employment contracts left unenforced by local authorities, almost non-existent freedom of the press, arbitrary and draconian drug enforcement, a ban on homosexuality punishable by lengthy prison terms, government filtering of the internet, rank favoritism in the form of selective enforcement against non-citizens, massive subsidization of the Emirati caste for everything from housing to education, labor laws that make it near impossible to fire a citizen but that grant effectively no rights at all to expatriates, academic oppression by the secret police, no religious freedom of any kind, no woman’s suffrage, no men’s suffrage, massive, unchecked deficit spending, and, to top it all off, a totalitarian monarchy with what amounts to unlimited power, could even remotely be described as “global” “liberal” “neo” or “capitalist,” much less a poster state for “global neo-liberal capitalism.”
Dubai in the 1980s and early 1990s became the Gulf’s principal dirty-money laundry as well as a bolthole for some of the region’s most notorious gangsters and terrorists
Modern capitalist banksters don’t care where the money comes from and will do deals with anyone, thugs or otherwise, if it generates short-term profits and they get their cut. And they have no interest in the long-term and if their greed and plunder blows up a few countries and economies along the way, oh well. So, it’s goodbye to Dubai. They wanted to play with the big boys and blew it.