Just how socialist is America ?

I'm not sure what the "Freedom Index" is based on, but where else in the world does the government grant itself the power to run financial markets ?

And this is despite the restraints clearly spelt out by their constitution, which forbids government from doing just about everything it gets away with today.

This bail out will be the nail in the coffin for American liberty. You could call it the New New Deal, a profound change in the nature of American markets, a severe blow to the principles of free markets, the emergence of widespread moral hazards, corruption and conflicts of interest in Washington.

Reason Magazine has a devastating summary of what shall come to pass once the bail out has been approved, and the sheer recklessness of the current crop of American politicians who are backing it, including both Obama and McCain. This first paragraph alone will have you reeling in shock:

The Senate is overly fond of referring to itself as the “world’s greatest deliberative body.” Barely 48 hours after the House rejected the Treasury’s bailout plan, the august body took a previously passed House bill mandating that insurance companies cover mental health benefits, added in the core $700 billion bailout, laced in money for rural school districts and disaster relief, expanded FDIC deposit insurance coverage, and topped it off with over $150 billion in old and new tax breaks for businesses, individuals in high-income states, individuals living in states without an income tax, and various interests such as wooden-arrow makers and film production crews. GOP Leader Mitch McConnell, almost choking back tears after the Chamber passed the 451-page monster, said it was the Senate “at its finest.”

The Age of Pericles this ain’t.

Now I'm usually the last person to claim conspiracy and corruption behind unwise or unpopular government actions, especially in Western democracies. I would have typically suggested incompetence, inability and a misunderstanding of economics is behind the abysmal state of public education and health.

But the banking and finance industry has no right to call itself a free market. It is a cartel, operating through lobbying efforts, political favors and by institutionalising their interests and profitability in government (see The Fed, the Community Reinvestment Act, the FDIC, the SEC, the NRSRO).

We are definitely approaching "peak insanity":

Let’s remember, this is one of those rare cases where the “victims,” the bankers and investment bankers, are the very people who made the mistakes. It is possible that, absent government intervention, we can get through this upheaval with no one else actually getting hurt. This isn’t like the former Enron employees who lost their life savings through no fault of their own. This is financial institutions failing because of the very specific mistakes they made.

....

Remember, wrongdoing at Enron wasn't uncovered by regulators. It was uncovered by the market, as analysts realized that much of the company’s story was fiction. Markets with free flows of information are the best guard against meltdowns. The slightly less free market we are entering will make them more common.

Also, while I have no real reason to question Hank Paulson’s motives in his rampant cheerleading for a bank bailout, I would feel a whole lot better if he weren’t sitting on a few hundred thousand options to buy shares in Goldman Sachs.