Monday, September 8, 2008

Left Is The New Right - So What's Left?

Prof Q says the collapse of Fannie and Freddie spells the end of neoliberalism (whatever that is). Here's my comment:
The supreme irony? The Chinese socialist government is now fretting about how much exposure they have to the US capitalist meltdown.

In mid-2007 China owned around $376 billion of debt issued by U.S. government agencies, principally Fannie and Freddie. Do they now walk away, or follow Uncle Sam down the hole? As one Chinese analyst frets:

"For China, whether or not you buy the new treasuries, there will be losses: if you buy them, you're getting deeper in the hole; if you don't buy, your existing holdings will lose value."

Or as Vice-Premier Wang Qishan put it:

"If we don't buy U.S. treasuries and ABS, what else we can buy? China just has no way to avoid the risks. Whatever we do, we have to bear the losses."

The old dictionary definitions of "Left" and "Right" just don't seem to be holding up too well for discussion purposes in this Brave New World. Maybe it's time to dump the corporate stock financial model?