Other People's Money (Alan Farago)

  (CounterPunch) -- The air is escaping from the little multi-hundred billion dollar balloon Bush administration floated to resolve sunken credit markets. Meanwhile, news on the economy, in the past week especially, has been massaged within an inch of its news cycle life. We're not getting the whole story, by half.

Lifting the housing industry from its sharpest contraction seems to be the primary political focus of both Democrats and Republicans. The news media appears to be having difficulty parsing the differences.

Let's start with a simple explanation. The first step of the free-market acolytes within the Bush administration involves nationalization.

That is what Federal Reserve chief Ben Bernanke did, authorizing the use of derivative debt tied to mortgages as collateral for loans to banks. US Treasury Secretary Paulson has said, the unprecedented step is "temporary", an "emergency response" to avert a financial meltdown, but journalists need to measure the two hundred billion against the ocean of toxic derivatives whose owners now have reason to come calling for charity. It is on the order of trillions.

Taken as a whole, the US financial system was turned into a chop shop where stolen property is taken to be dismantled and sold off piecemeal. That Republicans, the party of fiscal conservatism and limited government, presided over the unravelling of fiscal common sense is astounding.

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