Bailouts

[Geiseric]

Can anybody explain exactly what this means? I know that it means that the banks aren't doing well, so the state "invests," public funds in them, hoping that they will pick up. However I would appreciate a more concise definition, and what this means for us as marxists.

[jookyle]

Bailouts is really the wrong term. They are, technically speaking, loans given by the federal government. The idea is to essentially give these banks an ultimate bottom so that they can't go bankrupt or go under completely.

As a marxist, one may view this as a fantastic example of when Marx refers to the state as the executive branch of the bourgeoisie. The bourgeoisie screw up and use the state to maintain themselves/keep the capitalist system intact. This is also one of the three major contradictions of liberalism that one learns when first studying political economy; that the private and public sectors are supposed to be completely separate entities in theory yet, in practice, the private sector relies on the public for security and survival.