By Jeff Fecke • 10/9/08 • So, we’re nationalizing the banks.
Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.
Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.
The Treasury plan was still preliminary and it was unclear how the process would work, but it appeared that it would be voluntary for banks.
Now, smarter people than me think this is a good thing, and frankly, I find it hard to disagree with the logic; indeed, it makes a great deal of sense, and would be more transparent than puttering in the background. And, of course, it takes us closer to the way Sweden does things, and I’m all in favor of that, except for the herring.
But I do think it’s fascinating that this meltdown has completely eliminated the last fragmentary claim that the GOP ever was a party of smaller government. I mean, if Robert Reich had suggested nationalizing the banks, there would have been armed insurrection — I mean, beyond what Tim McVeigh managed. The right would have gone berserk. We would have been one step closer to the communist dystopia that the Republicans always say the Democrats are trying to usher in. And yet here we are, and the GOP is spearheading the largest government intervention in the economy since the Great Depression, and…well, it’s all okay, because if we don’t intervene, the rich will be hurt. (The poor, too, but the GOP doesn’t care about them.)
In the end, the GOP had a chance to walk their talk for the past three decades. Instead, they did what they always do: they did what was best for corporate America. Because the GOP has never been the party of small government. It’s been the party of the rich, and of corporate greed. (I’m all for intervention if needed, but I’m a liberal; I don’t pretend that the government has no role in society.)
If you’re a true-blue libertarian who thinks this is disastrous, fine — at least you’re consistent. If you’re a true-blue libertarian who’s voting GOP in the fall because they’re the “party of small government” — you may just want to vote for Bob Barr, and send the GOP into the wilderness. Because while the Democrats will spend money on health care and education, we’re open about it. The GOP will spend far more making sure that the rich stay rich — and then lie that they’re doing nothing of the sort. They’ve earned their time in the wilderness. Send them there.