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The power of finance in the anglosphere

I wrote the other day of the importance of insurance to the American 'tort model' of rights which now characterises the political behaviour and outlook of many American citizens. So I understand the importance of AIG to the American economy, and society. As one of the co-founders of the campaign for public ownership here, I understand that sometimes governments have to act, and would argue that sometimes society is protected by collective economic action.

I am stunned by what has happened this week, however, and by the blase contempt of those who have done it. The only possible justification for it all is that it has held off another Depression.

But we all know that the goal is to remove the risk that the super-rich and financial institutions always said justified their wealth, even if that required straining the chains of the media-political class they own and exposing who runs things to the citizens.

Many of those involved couldn't care less about the people they view as the lower reaches of the food chain. That's why they saddled the poor with sub-prime debt and now saddle the taxpayers with the consequences.

In pursuit of socialized finance, seven hundred billion dollars has been allocated to the American financial system by the American government. The national debt ceiling of the United States has been raised to 11.6 thousand billion dollars. The power to allocate funds has been allocated to the Treasury Secretary. The Treasury has been authorised to act subject to no court, no congressional committee, and virtually no oversight.

Since the secret service was formerly wholly made up of Treasury Agents, and is now part of an unaccountable Homeland Security department, I suppose that the day of the Praetorians has arrived. How long before a Lenin's Mausoleum is erected on the Potomac, with the cadaver of Hamilton moved from New York and placed inside?

Taxes have become statins in the veins of finance capitalism, to be injected and maintained at the behest of the patient; the American treasury, power and the lives of workers are now just the elements of a banker's defibrillator.

Yet that's not all. Alongside this stunning expansion of state power, which will have to be paid for with future taxes, banks across America have sold themselves to sovereign wealth funds owned by foreign governments. These funds come mostly from Asia or from those parts of the world drunk on the profits and corruption of oil. From citigroup , UBS and Barclays, down to the smallest bank and even, one of my readers notes, football clubs, sovereign funds have been consuming the ownership of institutions.

Is this the domestic legacy of the past eight years? An America which looked like it could have got out of budget crisis (whether because of a Democrat President or a Republican Congress), and which could have tried to rein in the super-rich and high finance, is now either in hock to its own government or foreign ones.

All this when the Department of Defense has requested 515 billion dollars for the next year alone. Pretty soon, the US budget will consist of debt payments, money for the war machine (official and mercenary), and a hollowed out social security commitment--with scraps for the poor as a sort of chicken-skin window dressing.

This is what the Republican Administration and the Democrat Congress have done to the United States. I loved it, when it was great, and walked its streets and ate its food until well past dusk. I rested in one of the monasteries behind the cathedral of immaculate conception, I drank with its former soldiers, I taught its children and its elders too.

All on the edge of being experiences of a past empire, on the edge of a fall.

I had dinner with some American student lawyers this week. One, who had worked in the White House, spoke approvingly of Mayor Bloomberg of New York. She had heard him ask, privately, in response to questions like mine, 'yeah--who is gonna ask the USA to pay the money back? Who's gonna threaten us?'

Who would have thought that the answer might have been 'your own citizens, and barring that, your owners in their time?'

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