When Mexico was in serious financial straights the US said the (Mexican) government needed to stay out of the way – the market knows best.
When Russia was on financial brink, again, the US said government intervention should never happen – you should be like us.
When Thailand was….nevermind…you get the idea.
We are real good at telling other governments they need to stay out of their country’s “free market” affairs even when the result includes joblessness and domestic turmoil. The economic system will correct itself…well, unless it happens to us – then the rules change.
The Federal bailout is approaching (and will pass) the Trillion-Dollar mark. What is on the table so far?
$300 billion for failing mortgages.
$200 billion loans to banks
$200 billion to buy Fannie Mae and Freddie Mac
$87 billion to JPMorgan for financing Lehman trades
$85 billion to buy (79%) of AIG
$29 billion to JPMorgan to buy (failed) Bear Stearns
Is this a glimpse of a US move towards Socialism? Well, the government will now basically control the lions’ share of mortgage lending (Fannie Mae and Freddie Mac) and Insurance (AIG).
I think Sen. Jim Bunning (R-KY) summarized it pretty well. “The only difference between what the Fed did and what Hugo Chavez is doing in Venezuela is Chavez doesn’t put taxpayer dollars at risk when he takes over companies. He just takes them.”
Think about it. The US, with taxpayer dollars, has taken over failing companies for billions of dollars. If they are right, and companies rebound, the government has serious intervention into the once private sector. If they are wrong, and the companies fail, taxpayers deal with more loses and ongoing repercussions. Sounds like a no-win situation to me.
I don’t think we should have bailed the companies out. Yes, I know jobs would have been lost. I know the economy would have suffered as it worked its way back to manageable levels. But I also know that “just print more money” is not the path to recovery.
Fine, I suppose this is where you look for some witty insights to my mind. A "bio" of sorts. Here is the deal... I ride motorcycles, smoke cigars, golf, kayak, fly, race my car through the mountains, write (a lot), and travel extensively. I am almost old enough not to care what other people think about me...almost. ~Godfadr
it’s hard to object to the government’s mass bailouts since similar debt-producing methods were put into action to bring the U.S. out of the Depression; maybe socialism is what we’ve been been headed for this whole time…
Correct me if I’m wrong but didn’t they also create the situation which allowed for more mortgages? I know that there are a thousand reasons for foreclosure, but doesn’t it seem like those of us that pay our bills on time are being penalized.
Maybe the government should donate some mula toward my mortgage as well.
Why should we, as taxpayers, pay for the results of corporate greed and mismanagement? I certainly didn’t see a check for my share of the profits when things were in the black!
As a small business owner, I know that there is no one to bail me out when things get tight. I think it is time for some corporate tough love (i.e. suffer the consequences of your actions). This would of course impact many sectors of finance, but how long can we go on propping up a three legged table?
Right you are! I’m glad that somebody else sees things so clearly. A lot of good it will do, though!
In essence “we” are paying ourselves back with money that “we” do not have because “we” are already in such huge debt. Beyond that “we” are doing it with money that has no actual value except the good faith that people put in it, which is dwindling fast.
The biggest problem of all is debt–individual debt and national debt. It is prompted by greed and covetousness.
Great Post! This one should be required reading!
What’s interesting is that they are rushing to bailout the corporations that created this mess but NOT the general public who are losing their homes.
What really burns my butt though is that the masses seem to be sitting back and accepting this without question; YET those same people will bitch and scream about paying an additional toll on roads they drive on everyday to keep them in good condition. Those same people bitch about an additional 10cent tax to help fund a useful program in their community.
These people don’t realize that ANY government funding IS TAXPAYER MONEY and their taxes will have to be increased for this funding.
excuse me while I go bring up my breakfast *now I know why I don’t read or listen to any news on weekends or days off*
We are going in the wrong direction even with bailouts. I am not sure anything can help at this point and spending a Trillion dollars of taxpayer money doesn’t make it better.
Since the American taxpayer is now broke, I say we outsource our politicians jobs to India. We can’t afford the affluent politicians anymore, so I think we should outsource them to India and give our current leaders the pink slip. If only that were possible. I wish it were easy to immigrate to Europe, I’d be on the next flight. Its embarrassing to be part of a nation run by crack whores for the super-wealthy. We could have given free healthcare to every american citizen for less than the cost of these bailouts. Its obvious the american citizens best interest is no longer a part of our government.
Why don’t we pay off peoples mortgages instead of giving money to the already rich? I’d be for paying off the mortgages before just handing over the money to billionaires so they have no risk. They have no risk at all. They can continue to get millions in bonus money, and when times get tough, they will just call their friends in government to get a few hundred billion taxpayer dollars.
What Trillions? We have no trillions. We have no billions or even millions. We are broke. We were broke before the bailout. So what now? What are we changing. Nothing. We still sit back in our chairs sipping on lattes with our heads in the sand. We won’t wake up until we attempt to slide the plastic at Starbucks only to find that visa and mastercard have gone bankrupt and are no longer bankrolling your life which exists beyond your means.
How would that be for a dose of reality. I’m afraid it’s coming folks and it’s coming fast. Are you ready?
Now, I must leave you to sip on my french press.