Stockholm Syndrome

Krugman writes:

On Olbermann a few minutes ago (that basement classroom with the heavy paper over the windows and camera sure has come in handy lately!) a phrase popped out of my mouth: “Stockholm Syndrome”, with regard to the bailout rescue.

...I think that Congressional leaders know that it’s a bad bill, but feel compelled to defend it, because they’re (rightly) scared of the financial consequences of a second rejection. And to some extent economists like myself are in the same position; I think I called it the “hold your nose caucus.”

So am I for the bill? Yuk, phooey, I guess so. And I’m very angry at Paulson for putting us in this position.

But as he admits, he knows the financial consequences of a second rejection will be another one day stockmarket tantrum, and the financial consequences of passing the bill will be far worse and longer term and are coming anyway. It's like he's incapable of really identifying the source and nature of the fear. Which is all about the Bush regime and its clique. Because really there are numerous reasonable things the US government could do to alleviate the global financial crisis and many more things it could do to alleviate the problems of the real economy. But everyone knows there's an intent to defraud the public, and says it obliquely, but then lapses into this irrationality of the spectacle, that is to say: well we know what they will do with this legislation is not the stated intent, but they will take advantage of loopholes and flimsiness of the bill to engage in a racket to strengthen a small group of financiers; if they do that, it will be disastrous. But - (shifting invisibly to the spectacle now) - we know if they were to proceed with the plan as advertised, as we are with fausse naivété to pretend now to believe, and buy up lots of illiquid but valuable assets from all those who have been promised such relief, then it may have some small effect but we can't be sure, but the belief that it might means passing the bill is also uplifting theatre to affect the sentiment of financiers, while rejecting it at this point, after dangling the goodies in front of their noses, is, as theatre, a downer. So we must pass the bill even though we know they won't use it to enact the advertised plan which may be "better than doing nothing" but will assuredly use it either a)to do nothing or b)to enact the scam which is certainly worse than doing nothing.

To say that the numerous reasonable programmes of socialism for the rich, capitalism for the majority, which were always expected of the State, and undertaken on large scales as recently as the S and L bailout, are now "politically impossible" is to covertly acknowledge there is a radical aggressive agenda here the nature of which we dare not even contemplate, and to admit we are at the mercy of a lawless, ruthless, armed, wholly unscrupulous ruling class of whom we are in very serious terror. This would fit in with the other meme of "third worldisation" of the exceptional US of A, where things like this are not supposed to happen; where the influential educated indoctrinated elites of the lower bourgeoisie are not supposed to be terrified of displeasing the most powerful bloc of the ruling class when performing their usual function of reproducing the status quo.