The Passion for Free Markets, by Noam Chomsky

http://www.chomsky.info/articles/199705–.htm


Who then ends with the profits and the assets? Lenders.
Who ends up with the debts, the broken lives, the drained-out savings accounts, and the sham of government assistance? The middle class.
Who winds up paying the bills and sweeping up the mess? The taxpayers.

The banks presumably already knew that the US real estate bubble would burst eventually, but they probably also knew from prior experience that when push comes to shove, the Fed and the US taxpayers would pick up the pieces.

It is exactly what Chomsky has said: profits remain private, but the losses are passed on to the public.

People ought to stop referring to the American system as a free market system. It is not.

It’s always politically expedient to use tax money to bail out the wealthy.

It is what has long been happening in my home country, the Philippines, also. Take the Philippine real estate industry. Somehow all the middlemen, realtors, mortgage brokers, appraisers and con-artists have slithered away as the entire country has been sold grossly-inflated real estate that they were told they would ONE DAY, SOMEDAY afford. Most of the middle class homes are still in tact as the Filipino middle class have been less aggressive with unrealistic long-term mortgage amortization periods. But our banks have long been suffering being tied so heavily to American paper/monies. I think the Philippines has come to an economic doom for the longest time though, as we’ve long ago mortgaged away an impossibly un-afforadable future for the next generations to come.

In fact, the whole world is REALLY going to feel this one, this big hit. In the last decade, the US has been financing the last, what, ten years on foreign capital. And so now that it’s time to pay back their debts, Uncle Sam is going to turn his cartoon-character pockets inside-out to reveal them completely empty. He will have a big frown on his face, and he will shrug, and then he will dare the the rest of the world to sue.

It’s not the way capitalism is "supposed" to work. But it’s probably the way it’s designed to.

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How Klassy got her groove back.

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