Smaller government and free markets

Republicans love them? Yeah, right. OK it seems like it had to be done but this is essentially a line of credit for $200 BILLION dollars secured by my children’s tax dollars.

I long for the days when Clinton’s sex life was the scandal and we had budget surplus. I wonder if there will be one again in my lifetime. I can’t help but think that the government will end having to help Freddie Mac at least (Fannie may be more financially healthy).

This is interesting:

Standard & Poor’s estimates that the People’s Bank of China held $340 billion of these agency securities at the end of June, but has been unable to estimate Asian holdings over all because the data is too unclear.

So we are guaranteeing these companies to preserve American’s ability to get mortgages they can’t afford so that China’s investment is guaranteed? I understand from my reading that the money is structured so that those who currently own would have to lose a lot before the bailout kicks in, but we just saved Morgan Stanley, Citigroup, China, and all the other institutions and governments that bought these bonds.

STOP KIDDING YOURSELF: This is not a free market. How about regulation as we go instead of taxpayers bail out the companies when they really tank but after the big investors have already made their money. Why? Because we prefer “free” markets. That’s just nuts. I think we just socialized our housing market. I’m not sure that is a bad thing (and it was already substanitally protected by the government/socialized), but let the scales fall from your eyes, free marketers — there is no such thing! (that oughta get koolaid going – not to mention my dad who has NEVER made his presence known. will he now??????)

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4 Responses to Smaller government and free markets

  1. laurabethnielsen says:

    So in further proof that I am a tree falling in the woods with no one there to hear, I am the first commenter on my own post, but also, read this at crooked timber (and the outgoing link in this post) about how this represents a shift in who bears the risk in a neoliberal economy from business to indviduals. Very, very interesting. I found that I had to stop and shout, “yay baby!!” a couple of times.

  2. robertlnelson says:

    I tend to think these macroeconomic issues are pretty complex, which adds to my typically present caution. But, basically, LB probably has this right. I watched the Newshour tonight and Judy Woodruff was interviewing the poor young Acting Undersecretary for the Treasury who was trying to answer questions about, isn’t this a fundamental transformation in the U.S. housing/financial markets, and, how much is this going to cost the U.S. taxpayer? The guy did the best he could but could not really answer those questions. It was like, “Well, we hope taxpayers will understand that we are acting in their best interests.” Then Margaret Warner interviews the economic journalists, and they say, yes, we tried a market approach, and it didn’t work.
    I wish our Democratic candidates were better in talking about this. It is another major catastrophy that has occurred on the watch of W. At least the Treasury has enough professionals to figure out they could not let this go that far south.

  3. laurabethnielsen says:

    Well, it is in the interest of the tax payers in some ways — hopefully this will lead to a continuation of good mortgages, bolster the housing market and therefore slow the rapid descent of home values. And, many homeowners also have mutual funds on their own, in a 401(k) or 403(b) that likely own stock in the financial institutions that are invested in these bonds. that’s the whole, “well, I guess we had to do it.” But how did it get this bad? and, I don’t think it is just W. It is that whole neoliberal crowd that likes to push off social responsibilities (housing, health care) onto the individual and the “free” market and then claim we are “lazy” and “whiners” when huge numbers of us can’t make it work. 6.1% unemployment. largest drop in home values since the Great Depression, huge deficit, and now this.

    Oh, and the CEOs of these companies — On NPR they said they each received retirement packages worth $15 Million. I should be such a “failure”

  4. vickywoeste says:

    Yes you should, Bob, and I would then expect a nice slice of that retirement deal to keep quiet about all the skeletons in your ABF closet . . . not too big, I’m fair and understanding, I’ll just take enough to put 4 kids through college . . .

    but on the substance, did you all have a look at Bob Herbert’s withering attack on the Rs for their attacks on liberalism’s accomplishments of the past 80 years? http://www.nytimes.com/2008/09/09/opinion/09herbert.html?hp
    No liberalism, no medicare, no fair housing, no women or blacks running for President this year, no America looking the way it does in 2008–why are liberals running away from that, he asks? The answer is we’ve been shamed into it–and we are afraid of latent racism because we haven’t figured out how to confront it. That is my biggest fear this election.

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