It’s official..US on road to socialism

By: ispeculatornew
Date posted: 03.30.2009 (4:00 am) | Write a Comment  (1 Comment)

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communist_usa-flagOver the past few months, the US government through the Fed, the Treasury and other federal entities, has been buying up companies, gaining control of entire industries and all along it has downplayed 2 words: Socialism and Nationalisation. Of course, both words spark huge fear not only to the markets but also to its own population. The government insisted it did not want to run any of these businesses but rather simply let them survive. And for a while, it looked like that might happen…

But in the past few weeks, the US government has gotten on the road to invalidate contracts signed by AIG and has now asked GM CEO Rick Wagoner to resign. I’m not saying these were not the right picks, or that they were. But it is still interesting that the US government is now clearly calling shots in the insurance business as well as the US automakers. And with control over several big banks, it is becomming clear that the US government is calling some shots in that industry as well. And all of this happened in a matter of months. So let’s not try to imagine where it will get if things do not improve in the next few months.

Now many questions will arise from such a role of the government. First off, as these institutions become “political”, can the government actually let them fail? Or does it become too much of a political liability to have a “public failure” of a federal rescue? And also, when will the government actually step back and let the private sector take over? We all know that the government is generally far from effective compared to the private sector and that has been proved in the US more than anywhere else. But it is also known that once the government gets involved, it has a difficult time letting go and that is what I am personally more worried about.

The Obama administration has already been criticised for not coming up with enough clarity and answers… imagine what it will be when they will start writing insurance policies, designing new cars and developping new “green cars”. Oh and there are many, many companies waiting in line to be managed by Washington.. no end to this tunnel in sight.

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1 Comment

  1. Comment by Dan K. — March 31, 2009 @ 10:14 am

    Out of curiosity, did you vote for Obama?

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