America and China Joined at the Hip

By DAVE LINDORFF

18/9/08 "Counterpunch" -- - With the government now having spent over $800 billion in less than a year shoring up tottering financial companies that had become little more than casinos (and rigged ones at that), America is looking increasingly like China, a country where the state has been gradually getting out of the business of directly owning companies.

At this point, with the US government owning 80 percent of the world’s largest insurance company, AIG, and essentially owning mortgage firms Freddie Mac and Fannie Mae as well as bankrupt Lehman Brothers, and with the nation’s two largest automakers in line asking for $25 billion in government loans, one would be hard-pressed to spot the difference between the two systems.

The essential point of commonality is that big enterprises—especially banking enterprises—are being allowed to operate as fail-proof yet operationally opaque adjuncts of the state. Their business decisions—whom to lend to, what risks to take, etc.—are made with the goal of enriching the key managers and shareholders, and probably also key government officials and bureaucrats—with no thought to the impact on the larger economy or the larger population of the respective countries.

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