I know we’ve covered this before, but I can’t resist linking to stories were economists point out the fact that, even though the wealthy are often the most rabid and vocal critics of welfare, they don’t seem to mind so much when the U.S. government comes rushing in to bail out inept and/or greedy corporate management and their shareholders who should have known better. Here’s a clip from Reuters:
The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron’s in Sunday’s edition.
Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said — at least $1 trillion and more likely $2 trillion.
The banks will become insolvent because of mounting losses as a result of the housing bust and because they have only written down their subprime loans so far, he said. Still in front of them are their consumer-credit losses, for which they lack the reserves, Barron’s reported….
“The regulators should investigate themselves for bailing out Fannie Mae and Freddie Mac, the creditors of Bear Stearns and the financial system with new lending facilities. They have swapped U.S. Treasury bonds for toxic securities,” he told Barron’s. “It is privatizing the gains and profits, and socializing the losses as usual. This is socialism for Wall Street and the rich.”
He said that sometimes it is necessary to use public money to rescue institutions, but in a way that does not bail out the people who made the mistakes. “In each one of these episodes, the government bailed out the shareholders, the bondholders, and to some degree, management,” Roubini told Barron’s…
If we could just stop the television, the drugs, and the porn – even for just one day – I’m confident that we could have a revolution in this country. The ground is ripe for it.
10 Comments
I’d rather just behead the entire Bush and Cheney families !
Finally, something worth concern and worthy of discussion …
Except for the fact that it is too late. If anyone had any doubts about global climate change … there should be NO doubts we are headed for a global depression.
Banks in Europe are failing. Housing in Europe is collapsing. No one is immune. And the clock is already ticking down.
Barring what the traders call a “black swan” event … a one in a thousand sudden and unexpected event that would send us into a tailspin … the one blessing is that this will be a long, slow, grinding down of financial assets world-wide. I chart the dollar, gold, oil and the NASDQ every day … have been for years … and the decline is inexorable.
The FTSE, the Euro and other world bourses are not faring much better. The fastest growing market for the moment in the world in the Nablus stock exchange in the Palestine territories. When you’re hot you’re hot.
Not much we or anyone can do now. What the governments are doing at the moment is called “pushing on a string.” Freddie and Fannie are broke. Their common stock is literally worthless. Ford is under $5 and headed for $1 … as is GM. (GMAC is broke.)
Hang on. Spend less. Save. Plant potatoes. The sky is not falling. We’ll survive. But it will not be pretty. McCaion hasn’t a CLUE what to do. And should Obama raise taxes … we most certainly will take a dive.
At this point, the only solution is to wash ALL debt away … a total or near total collapse … and then a long recovery.
If the Barron’s writer is correct … 18 months of this slow grind will be very very nasty. I’d opt for a crack in the egg so we can get on with a new day.
Sweet dreams.
I don’t see how McCain expects to be able to afford a continued presence in Iraq. Isn’t it time to get fiscally responsible?
On the “bright” side, the war profiteers are doing well in today’s economy, relatively.
This is the unintended bad consequence of governments intervening in the marketplace. Government intervention is supposed to protect us against the Mr. Burnses, but the Mr. Burnses can afford to buy public figures and we can’t. Now the Mr. Burnses can use public moneys, lawmakers, and uniformed guys with guns to do their greedy bidding, and we have very little if any recourse.
Too late now and it doesn’t make his followers less crazy and annoying, but the now re-marginalized Ron Paul has been warning Congress about this for years. I blame the Republicans for not listening when they had the chance to actually uphold their principles for once, and I hope they get what they deserve.
This morning’s WSJ exposes how corporate execs are dumping their excess pay and pension benefits into employeeee plans so they, too, can get write-offs. This jeapardizes the legality of the employee plans and is simply blatant cheating.
I am absolutely befuddled why there has not been a worker revolt long before these last two years of economic stealing by the corporations and executives. Ken Lay and Gary Schilling got off easy. Few others have been prosecuted, although they have lost jobs and some money. The American workers just sit back and take it.
Amazing.
There were days in our historu when the railway workers, miners and dock workers, auto workers took to the streets … and, of course, were met with the Army’s canons and bayonets. I am NOT advocating violence. But neither the unions, whose hands are also in the till since Doug Fraser got a seat on Chrysler’s board, nor congress has acted. Hearings get us nowhere. And even the Elliott Spitzers are corruptible. It is a sad state.
May we collapse in peace.
I guess it’s time for your readers to take another look at Ralph Nader.
None of this is new and Obama won’t do a damn thing about it. McCain, of course, will encourage it.
votenader.org
I could easily pine on for thousands of words but I won’t. The fact is nothing will change until millions of voters divorce themselves of the fear of voting for non Dem/Rep candidates.
There’s only one reason I’m not voting for Ralph Nader…
…Ralph Nader.
well, while everything is falling to hell in a handbasket at least we haven’t lost perspective in Ypsi.
If we get rid of those urban goats and chickens at least we’ll have done something — and feel like we haven’t lost control over things. Who cares if we don’t have any good sources of local food? who needs it?
Robert – That’s TWO reasons.
I keep returning to this post, checking to see if publius or ytown have commented yet…and, nope.
They’re still standing in a corner, facing the wall, twirling their finger in their hair and repeatedly reciting a nervous, manic mantra.