As the Credit Crisis morphs into the second great depression, there’s a big picture concept that a lot of people seem to be missing. I want to make a very simple point.
The Bush administration’s financial policy is exactly the same as its military policy. The people in Bush’s cabinet who are responsible for any given area are the people that used to be in charge of an industry leader in that area. The revolving door between big business and government is the same with bankers as it is with military contractors. The people in Bush’s cabinet represent the companies that they used to be in charge of, not the American people. They do what is best for their former companies, not for the country.
People have no problem understanding the connection between Dick Cheney and Halliburton in relation to the Iraq war. Cheney used his position of authority to funnel massive amounts of government money to the company that he was once the CEO of. The same thing is happening now with Henry Paulson in relation to Goldman Sachs, the company that he used to be the CEO of. Paulson, like Cheney, came through the revolving door between government and big business. Cheney became Vice President, Paulson became Secretary of the Treasury. Guess which company is benefitting most from the bailout? The man that Paulson appointed to administer the bailout program is Neel Kashkari. Guess who Kashkari used to work for?
In essence, the US Treasury has been privatized and its management has been handed to Goldman Sachs. Forgive the primitive graphics skills and allow me say this a little more clearly.
I’ll repeat the headline at the top of this post; Credit Crisis=Iraq, Paulson=Cheney, Goldman Sachs=Halliburton. To carry this analogy forward, you can look at what happened in Iraq to get a sense of what is likely to happen next to the US economy.