Kevin Rudd's plan to rescue capitalism

KEVIN Rudd has declared a new era of financial reregulation and government intervention in world markets to restore confidence and stop capitalism "cannibalising itself" as a result of the global financial crisis.

The Prime Minister has vowed to use the "greatest market failure" in 75 years to commit his Government to sensible new market regulation and intervention to stabilise the economy and save jobs.

"The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes," Mr Rudd says in a lengthy essay for The Monthly magazine, to be published next week.

"Ironically, it falls to social democracy to prevent liberal capitalism from cannibalising itself," Mr Rudd says.

In a sweeping 7000-word essay, Mr Rudd argues strongly for new government intervention in banking and financial markets, not only in Australia but worldwide, and says the 30-year era of neo-liberal free marketeering is over. As he and Treasurer Wayne Swan work on a new economic stimulus package to boost spending, which is expected to be announced within days, Mr Rudd's philosophical essay does not put forward any specific measures to deal with the worsening global financial crisis.

While Mr Rudd advocates new regulation and government intervention for financial markets, he warns that the advantages of the free market should "not be thrown out with the bath water". The federal Government has already intervened to provide a bank deposit guarantee, a ban on predatory share speculation and a higher limit for government bonds, and it injected $10billion into the economy before Christmas.

Mr Rudd draws on the experience and policies of Depression-era US president Franklin D.Roosevelt and hopes for the newly elected Democratic President, Barack Obama, to argue that governments should "reconstitute properly regulated markets and rebuild domestic and global demand".

More: http://www.theaustralian.news.com.au/story/0,24897,24987293-601,00.html
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Obama and the Congressional Dems would do well to read this essay....