STATE INTERVENTION TO PROTECT CORPORATE INTERESTS

Apart from American homeowners, who were drawn into unprecedented debt by a Federal Reserve policy of driving down interest rates and allowing house prices to soar (thus decreasing the cost of debt and increasing the collateral available to homeowners), much of the world's financial system depends on these two companies staying afloat. Almost half of America's deficit is contained in those two firms. Much of its banking system is heavily exposed to the housing market. In other words, the stability of the empire is at risk. It has nothing to do with protecting vulnerable homeowners, since the government is quite ready to see them expropriated both legally and - as in New Orleans - illegally. But it just goes to illustrate one of the profound paradoxes of American politics, namely the coexistence ultra-free-market ideologies among the political and economic elites with a constant orientation toward heavy state intervention to protect corporate interests.