Foreclosures Compel USA To Move Towards Nationalization
Foreclosures are compelling USA to move towards nationalization – a move that smacks of Marxism in a haven of capitalism. Is Marx laughing? More than a century and six decades ago he had said that socialism would take over the controls of even the most fanatically industrialized countries. Perhaps he was not far from the truth if we look at what is going on in the foreclosure-ridden America of today.
It is not well to openly talk about in the streets of Washington and New York because socialism continues to remain a dirty word. Except for few pockets along the east and west coasts, talking along these lines will invite derision and abuse.
But words cannot hide the truth of what is happening. The country is reeling under the foreclosure crisis that has affected not only the humble borrowers but also giant financial bodies. Last Tuesday (16th September) the government of USA in effect nationalized the American International Group (AIG) by purchasing 79% of its stock. A loan of $85 billion was given to AIG. The amount came from the pockets of the taxpayer. The giant government owned insurance body has to repay it in two years. A parallel can be drawn with what Fidel Castro did with private property about fifty years ago in Cuba.
Only a miracle can turn around the properties of AIG within two years to enable it to pay back this jumbo loan. Everybody knows that. The only way out is for AIG to sell its subsidiaries. But what if there are no buyers for it? In all probability there will not be. Then AIG will just become an appendage of the government.
Only a week ago the USA government nationalized Fannie Mae and Freddie Mac by taking over their stock that was worth conservatively one billion dollars at that point of ‘nationalization’.
One can clearly notice the slow but sure descent into a controlled economy. USA is following the path laid down by the central states of Europe, which had a ‘goulash’ type of socialism in Hungary, Yugoslavia and Poland about ten to twenty years prior to the fall of communism.
Till the other day the leaders of America were shouting from the rooftops about free market for the world at large. Today foreclosure related housing crisis are making them sing another tune as they dribble with the return to the shareholders.
Related Posts
November 3rd, 2008 at 9:22 am
[...] external investments. It is the last resort when your economy is in trouble, and a growing number of people see it on the cards for the USA (admittedly, with not much credibility). But who will be [...]