Wall Street: Three cheers for socialism

Driven to ecstasy by news of worldwide bank nationalizations, the investor class celebrates. The Dow surges.

By Andrew Leonard
Published October 13, 2008 2:16PM (EDT)

In the first 10 minutes of trading on Monday, the Dow Jones industrial average rose over 420 points.

What could possibly explain this? Have investors been driven to unthinkable heights of delirium by Paul Krugman's Nobel Prize for economics?

Let's recap. On Friday, Treasury Secretary Henry Paulson announced that the U.S. government would begin buying stock in financial institutions. On Sunday, the 15 countries that make up the "euro-zone" came up with an agreement to guarantee bank loans and encourage bank recapitalizations by governments. Monday morning, the United Kingdom and Germany both announced huge plans to inject billions of dollars of cash into troubled banks. Also Monday morning -- in yet another move aimed at increasing liquidity in the global banking system -- the Federal Reserve announced that it was lifting the cap on the amount of dollars that European central banks could borrow from the United States.

There is really no other way to interpret the ensuing burst of euphoria on stock markets across the globe other than as a resounding vote of confidence from the investor class in the principle that government should own Wall Street. The means of financial production have been secured by the state, comrades. Hip hip hooray!

One caveat: Half an hour after trading began, the Dow was only 300 points up, and given the astonishing volatility we witnessed on Friday, there's no telling where the day is headed. Still, for now, socialism never smelled so sweet.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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