Wall Street is no longer, in any real sense, part of the private sector. It’s a ward of the state, every bit as dependent on government aid as recipients of Temporary Assistance for Needy Families, a k a “welfare.” I’m not just talking about the $600 billion or so already committed under the TARP. There are also the huge credit lines extended by the Federal Reserve; large-scale lending by Federal Home Loan Banks; the taxpayer-financed payoffs of A.I.G. contracts; the vast expansion of F.D.I.C. guarantees; and, more broadly, the implicit backing provided to every financial firm considered too big, or too strategic, to fail. Money for nothing 'New York Times', 26 AprilNext time your acquaintances speak disparagingly of people on welfare, it's worth recalling that much of the corporate sector in every western economy is equally dependent on government. As well, families on welfare don't typically subvert the financial system or the environment, or manipulate the regulatory system, to suit their aims.
28 April 2009
The Corporate-Welfare State We're In
Thank you, Paul Krugman, for putting this so plainly: