Bailout rage: “Socialism in America ... Welcome to the Third World!”

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Backlash against the unprecedented taxpayer bailout for banks is building, with critics ripping recent U.S. economic policy as ‘punch drunk,’ ‘casino capitalism’ and ‘socialism in America.’

‘The free market for all intents and purposes is dead in America,” said Sen. Jim Bunning, R-Kentucky, the most vocal bailout critic in the Senate. “The action proposed today by the Treasury Department will take away the free market and institute socialism in America.’

‘Dear United States, Welcome to the Third World!’ wrote Los Angeles Times columnist Rosa Brooks. ‘It’s not every day that a superpower makes a bid to transform itself into a Third World nation.’

Housing and economic blogs again crackled with rage against the Bush administration’s emergency plan to purchase illiquid assets from the nation’s banks and lenders.

‘I am livid,’ commenter ‘Jenna’ wrote on L.A. Land. ‘Words fail to express how angry I am. I didn’t get million dollar bonuses, I didn’t use my home like an ATM, I didn’t buy a home I couldn’t afford. Nonetheless, I am going to have to pay for sgovernmentomething that was completely avoidable. It isn’t brain surgery to know that selling homes to people who can’t afford them was a bad idea and that someday they would have to pay the piper.’

‘We are doomed,’ wrote another commenter on L.A. Land. ‘I am fresh out of outrage.’

Another commenter asked, ‘How can they do this? The financial system will start the party over again tomorrow. It is so unfair and crooked, stealing from our children to pay for this.’

Mutual fund pioneer John Bogle said the U.S. government appears ‘punch drunk’ in its stumbling efforts to rescue the financial system. “We’re playing a game of casino capitalism, interfering with the way the market is working,” Bogle told Bloomberg News. “The seems punch drunk. It doesn’t seem systematic.”
Historian Allan Meltzer called the bailout plan ‘social democracy at its worst.’ He told Bloomberg News, ‘
“If they remove financial losses from the financial institution,” the government should ensure that “the financial company will still owe the money,” he said. “Civilized countries like Chile do that.”

-- Peter Viles

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Photo Credit: Bloomberg News photo shows, from left, Federal Reserve Chairman Ben Bernanke, President Bush and Teasury Secretary Henry Paulson.