As a response to the “junk-debt”- inspired, global, economic crisis, governments, with supra-national organizational approval, have appropriated billions of taxpayers’ dollars for bail-outs, have set-up special funds and under-written depositors’ savings in the desperate hope of alleviating the threat of rapid, economic decline and systemic destruction of value. Whether these governments have a democratic mandate for such unprecedented action is debatable. More importantly, though, is whether such decisions amount to good re-regulatory policy.
First, it is known that some of the bail-out money to large corporations has been squandered by oligarchic recipients and appropriated by them in their own interests. Secondly, special funds, set-up supposedly to support particular industry sectors from liquidation, have been attacked on the basis that they have only served to support crony-capitalism and to attract oligarchic rent-seeking writ large. Thirdly, Australian banks, for example, which have government, depositoraccount-guarantees have made windfall gains. The worst-case scenario is that governments have used taxpayers’ funds with a flagrant disregard for the consequences, including abusing inter-generational utility, and have actually committed economic, state crimes.
Public policy in Neo-liberalism is fraught with crisis vulnerability. Crises, as “created” opportunities, compound the situation. From U.S. congressional “earmarks”, to “Yankee and Met owners” scams siphoning billions in public funds (Johnston, 2007), policy discourse around the world has been “high-jacked” by opportunistic Neo-liberalism. This paper seeks to deconstruct some of the hubris associated with corporate capitalism’s creation of a new financial sector based on fraud – junk debt, credit default swaps and derivatives. How has it come to pass that that fraud has become the basis of corporate performance and leadership remuneration? Is criminal fraud the heart of global capitalism and a criminogenic Neo-liberalism? This paper explores these issues, qualitatively, through a “forensic” examination of emerging re-regulatory policies in the U.S. and Australia. The conceptual framework of the paper is located within, the notion of economic, state crimes against democracy (E-SCADs) (Kouzmin, Johnston and Thorne, 2009; 2010).
- Economic SCADs,
- hubris; commercial-in-confidence,
- bail outs and GFC