Deregulation, American Style

Dear George,

“The Land of the Free.”

I’m sure that phrase brings as big a lump to your throat as it does to mine. Granted, we’re not too sure what that lump is, whether its laughter trying to break lose or vomit. Whatever it is a, lump is a lump and thoughts of freedom bring it to the surface.

Yes, we are truly the land of free enterprise in which deregulated financial institutions enjoy the heady liberty once enjoyed those pioneers of deregulation, the pirates of yore.

However, when we speak of deregulation, we mean deregulation, American style.

Technically speaking, there is no such thing as deregulation. A corporation is never deregulated. Instead, it exchanges a benign regulator, the State, for a harsh regulator, the marketplace. The marketplace decrees that if you screw up, you fail.

God bless Ronnie, he cut the paternalistic ties that protected corporations and threw them, naked, out into the cruel pit of the market.

And all was happiness in the Land of the Free until May 17, 1984. That was the day the Continental Illinois National Bank and Trust Company came crawling to the FDIC for a bailout since it was about to go under. It was the largest bank failure in the history of the FDIC. It was so big, that the FDIC ended up buying into the bank and making it history’s first deregulated, government-owned bank.

But it gets even better. Not only did the FDIC buy the bank and bail it out with public funds, it also “affirmed the notion that certain banks were ‘too big to fail.’’ (Emphasis mine.)

The message was clear, George: Screw the market, if you’re big enough Uncle Sam will bail you out. It was a lesson not lost on the Savings & Loan industry.

One of the advantages of having a Congress that is a corporate employee is that when the shit hits the fan, all Congress does is slather deodorant on the shit without disturbing it. No one suggested it might be a good idea to reregulate banks. This taught banks that there was a profit to be made in failure.

The reason we don’t have to remember history is that it keeps repeating itself. And it is certainly doing that with the subprime meltdown. Once again, our deregulated financial institutions are jumping on the bailout bandwagon as they look to their congressional employees to bail them out, and once again, in the heat of a presidential campaign, there is no talk of reregulation.

Reregulation would be a disaster since it would make it impossible for financial institutions to profit from their incompetence.

All while, the Dow continues its with its spasmodic instability. The Dow is like a fourteen-year-old’s pecker: When a pretty girl smiles at him, it goes up; when she ignores him, it falls. Neither condition bears any relationship to reality. It’s all in his imagination.

So, keep your tax cuts in place as you prepare to pick the taxpayer’s pocket to bail out another set of financial retards. Let us continue to show the world what free enterprise is all about.

Your admirer,
Belacqua Jones