"There is no new thing under the sun" - the rest of us had to bail out the rich in 1932 as well!

So, the Italian goverrnment has decided to bail out Europe's oldest bank, the 540-year old Banca Monte dei Paschi di Siena SpA, to the tune of 3.9 billion Euros  - well below the going rate, I'd have thought. Yet again, a financial institution is to be propped up with taxpayer's money. This reminded me of one of the many fascinating insights in Isabel Paterson's The God of the Machine (which I recently wrote about here) concerning the American government's response to the Great Depression.

Two parallels between what happened in the US in the 1930s and what's happening right now there and across Europe struck me as  borderline spooky (the italics are mine):

And who went on Federal relief first [in 1932]? By no means the "have nots."... The first measure of "relief" was the Reconstruction Finance Corporation; and the first money paid out from it went to J. P. Morgan & Co. It was the non-productive rich who first went on the dole...  

Vincent Astor, drawing a large inherited income from ground rents, sold slum property which had been exploited till there was no income left in it, to the Federal government. Owning shipping, he got shipping subsidies... To "save them [the non-productive rich] from the consequences of their own gambling, everyone who had not participated in the game was penalized. Laws were passed against "hoarding," so that the only action punished was prudence. By this means the normal reserves of cash which normally restore production were dissipated.  

Like-wise, thrifty, competent, and solvent farmers, who managed to get their living from their farms, were penalized with quotas and quota taxes to subsidize speculative farming. One man in Montana drew $30,000 of government money because he had persisted in wasting seed wheat on arid land during a drought, while  a poor widow in New England was forced to pay a "processing tax" because she raised a couple of pigs and turned them into bacon!

Maybe we, the people, are doomed to bail out the rich whenever they've gone through one of their periodic psychotic episodes, because recovery would be impossible without the silly sods.  Or maybe, as Tory MEP Daniel Hannan and many other right-wingers have advocated, we should simply have let the idiots who gambled away our money go the wall, with all the suffering that would have meant for employees and investors.

Then and now, we seem to have ended up rewarding the feckless (by bailing out their banks in the first place and by printing money to try to convince the bankers to keep on lending rather than use lavish public subsidies to reward themselves for their incompetence) while punishing businesses and individuals who have acted wisely (with rock-bottom interest rates and devaluing the currency and keeping inflation high by printing money for the banks to lend).

The real reason I despise the Occupy movement is that it made it impossible for the rest of us to vent our anger at goofy financial institutions without inadvertently identifying ourselves with a bunch of infantile, half-witted, workshy nihilists who evidently want to destroy financial systems that - in between bouts of lunacy - have created so much wealth and liberty and happiness.

I'm sure any number of brilliant economists will tell me that the only hope of keeping our heads above water is to take money away from sensible people and hand it to wreckless fools - and I do appreciate that life is often unfair - but I just can't believe that the only effective solution to our woes has to be so bloody annoying!