Richard Becker of PSL contrasts the US government’s response to Hurricane Katrina with their response to the subprime debacle. In the aftermath of Katrina, the poor and middle class were left to fend for themselves, yet in response to the subprime crisis, the Fed immediately cut interest rates, a move widely interpreted as bailing out investment banks.
Most of those in the relatively small section of the establishment that opposes corporate bail-outs fear that they will lead to a greater and deeper crisis further down the road. Their fears are well grounded. But for the typical corporate CEO, what matters is this yearâ€™s bottom line.
The latest bailout reaffirms that far from “free enterprise,” what we live under today is a system of state monopoly capitalism.
Meanwhile 1 in 5 working families, about 41 million people, can’t afford basic needs like health care and housing.