The Treasury Department yesterday named Neel Kashkari as interim assistant secretary for financial stability. Will Kashkari be working for the Ministry of Truth? And who was Mr. Kashkari’s last employer? None other than Goldman Sachs. As Arnold Kling points out:
Instead of thinking of the pending bailouts and financial regulation as a new era of government supervisions of markets, think of it as preserving the system in which a Harvard elite controls other people’s money. In fact, very little is likely to change. Reading the news stories about how Secretary Paulson plans to implement the bailout, it seems as though the same people will be in charge of the money. Print some new business cards, change the logo on the front from “Goldman Sachs” to “U.S. Treasury,” and everything else continues as it was. It’s just that it becomes a lot more difficult for ordinary people to opt out of using the elite’s money management services.
Kashkari’s title reveals the hidden goal of the big government/big business nexus – maintaining the status quo. Capitalism is a dynamic, creative destruction driven machine. The system we have today abhors change and attempts to limit or eliminate creative destruction. The Paulson plan is not about bailing out Main Street as so many have claimed. It is about maintaining the existing power structure.