Just to show how much of a socialist scam our entire monetary system is, stocks SOARED today on NEWS that the all powerful Federal Government was going to step in and fix the banks.
Here's what Secretary Paulson said:
"What we are working on now is an approach to deal with the systemic risk and the stresses in our capital markets," Paulson said. "As we've said for some time, the root cause of the stress in the capital markets is the real estate correction. So again we're coming together to work for an expeditious solution which is aimed right at the heart of this problem." And, that is bad debts— or "illiquid assets" — on financial institutions' balance sheets, he said.
Translation: "A bunch of our banks made under collateralized loans to people who could not and will never be able to pay them back and now they don't want to carry those loans anymore, because...well they're worthless. For some reason, now they can't sell those loans to anyone and because of this they've lost a bunch of money. So obviously the Government should step in and help."
And our government responded:
"It will be the power — it may not be a new entity — it will be the power [for the government to be able to] to buy up illiquid assets," Rep. Barney Frank, D-Mass, said.
Frank said there was "virtually unanimous agreement" among lawmakers in attendance that such legislation was needed.
Translation: "We'll just use taxpayer money to purchase these worthless notes. We'd hate to see our biggest campaign contributors go out of business for something as silly as blind, militantly ignorant greed. So instead we'll make a law that allows the government to spend money on NOTHING!!!!!"
I think Glenn Beck also has a good explanation of it, check it out.
So I wonder how this will work?
Since the government is purchasing these assets, I would assume that the government would be trying to collect on them as well. With the new bankruptcy laws the stupid people who took out these bad loans don't have many options anyway, and now they are going to have to negotiate these debts with the Federal Government instead of with the business that loaned them the money. That sounds like fun, and it sounds fair too. I mean we had to do this to save the economy, we can just let it fail? Can we? I mean we can't just let stupid people be punished by reality for doing stupid shit? Can we? Our big brother has to protect us, we can't handle this on our own. Thank goodness for Congress and the Federal Reserve.
The more I think about this, the more it just seems like a tax on the people in an effort to fund big business. I mean the government purchases all these bad debts using tax payer money, and then goes after those same taxpayers to collect on the debts.
This is terrible. It's a condemnation on us as a population that we are allowing this to happen with out a revolt...our country is in very sad shape.
[UPDATE] Sept 19, 2008: WORLD Markets Soar!
8 comments:
Dax,
I think you're right and wrong. I think that some kind of "bail out", but it needs to be followed by pretty severe restrictions on the banking industry. I'd go so far as to say that we should nationalize home finance.
Well then your wish was granted earlier this year when Big Brother took over Freddie Mac and Fannie May, effectively putting the liens on the titles of 50% of the homes with mortgages in our country in the name of the Federal Government.
We spent $325 billion bailing out Freddie and Fannie, and now we are on the verge of spending a cool trillion more, I think that will about wrap up the entire mortgage industry into the purview of the Federal Government.
You know Nehemiah did a mortgage bailout back in his day (Nehemiah 5:1-13). However his concerns seemed to be less with the lenders and more with the people. I don't know that the situation exactly translates to what we are going through now, but it is interesting to consider.
Well, what I want to see is a system of lending that is much more just. I don't want to see anyone abused by high interest rates or terms that will only lead to their losing their home, property, livelihood, etc.
I don't think that nationalization is something that should be used in all times. But, given the current circumstances we're in, it's completely necessary. It's been less than eighty years since the economic crisis so bad that the world called it The Great Depression crippled nearly every nation in the world. What precipitated that? Bad lending practices, extreme wealth brought on by extreme greed and no or little regulation of trade. We're headed down the same road now. I think the "bail out" should be used to give the people more ownership and control of these things. Home ownership and personal property are better off under public scrutiny.
As far as I can tell that is not what the president wants to do. A lot of people who did wrong and took advantage of a lot of people are going to get off and keep their jobs. That's certainly not right. It looks as though the government's response to this will be the same that it had to Abu Grahib, just letting the people to blame keep their jobs (and in this case money).
I agree that most of the people who were loaned money in this situation ought not to have gotten the loan to begin with, but the brunt of the blame goes on the people who loaned them that money. In many cases they did all they could to suck people with bad credit in. And my beef is not just with shitty mortgages that shouldn't be. There are auto finance companies, payday loans and credit cards all helping to make the ownership society a reality.
This whole situation is fucked up. We live in a country that spend, spend, spends; and when that comes back to bight us in the ass because most of the money has drifted away from the vast majority of the people, and the whole damn thing collapses... Now we're mad, as we should be. We can't afford our own great healthcare, homes, cars or food. How is that an ownership society?
Here's the way I see it. We got too close to the pure forms of capitalism Ron Paul, et al seem to think are so great and guess what: wages are stagnant, healthcare's too expensive, our government's in debt and our infrastructure's in shambles. I think we need more government intervention, not less. We need to ask what people have a right to, what government ought to ensure and then make it so. Medical attention, food, education, employment with living wages; these are all things that people ought not have to live without. Wealth, assurance to too much personal property and power are things that ought not even be considered as protected. Both lists should be longer but I have to run.
I think it's just the opposite, the Community Reinvestment Act made banks have to lend money to people that obviously couldn't pay it back, then Sarbane's Oxley made it so the banks that were holding these notes had to value them way below what the real estate they were collaterized with was worth thus lowering their credit rating and freezing the credit markets basically making the only solution a government bailout. If you ask me this is nothing more than a well planned raid on the US Treasury by the Federal Reserve. It wasn't pure capitalism, it was a bastardized capitalist/socialist strategy that ultimately left the vault doors wide open.
If pure capitalism were at work then the money wouldn't have flowed to a part of the market that is traditionally risky in the first place, at least it wouldn't have flowed there without provisions for a market balanced prospect for the appropriate return. However that risk was artificially reduced by the imposition of the Federal Government, and then law was written such that the money basically had to flow there.
I still say let em fail. Because I'm sure the guys who were lobbying for the new credit and lending laws were the same guys ultimately loaning the money.
I think we differ on what capitalism looks like. This, Dax, is the rality of capitalism. You can say that there is a pure form os capitalism, but there isn't. There's never been pure capitalism anywhere you or I, or anyone else for that matter, want to live. Look to Pinochet's Chile, Russia in the early nineties, Asia in the mid-nineties and a host of other places to see what real, pure capitalism looks like, and how it comes about. Privatization, abolishing price controls and the economic reconstruction philosophy of the Chicago school of economics have only been implemented to the detriment of the average people living in the above nations. Ron Paul said that socialism always fails because his understanding of the world only has two economic frames with which it can be understood: capitalsim and socialism. The problem is when you go to a completely deregulated "hands off" form of economics, there is nothing at all to stop the insanely wealthy from going even more insane. Once you reach get to a point where the wealthy are capable of protecting their assets from the advances of the impoverished, that's the only relationship those two groups have to one another.
Why do you think that Marxism was such a plausible historical methodology to so many Europeans for so long? It took Soviet imperialism to shake them out of that fever. Nevertheless, there are other planned economies than socialism. In fact the early fifties saw the birth of Developmentalism in much of Central America. It was popular and it was succeeding. But the US saw it as too "Pink" for their liking and didi everything they could to undermine it. We're finally seeing a resurgence of this thinking not. But it's shrouded in the Communist rhetoric of leaders in Venezuela and Ecuador.
Long story short, I wasn't saying that what we had in this country was "pure capitalism", of course I don't think that. We're not living in a police state. And that's the only place you'll find pure capitalism. I said we'd gotten too close. The problem isn't that we're perverting capitalism, it's that we're using a system of thinking in which making money is considered a morally good end in the first place.
Capitalism, not its perversion, is one of our many problems.
Grace and Peace,
Jared
I think there's another issue here and that is simply one of scale. When our local savings and loan's coffers were raided via the 401k tax law in the 1980's to fund wall street's exponential expansion we basically went to a federalist capitalism which really leans closer to the police state you mentioned. Whether your looking for pure socialism or pure capitalism neither will work on the large scales that we are dealing with. The people are just to disconnected from it to have a voice. The real issue here may not be so much one of ideology but one of the improper consolidation of power. I guess that's fairly obvious, and I've noted before that I think pure capitalism is as idealistic a proposition as is anything else, both tend to exclude the nastier sides of human nature from the equation.
My new working theory is "small self sustaining communities of people that can and will defend themselves".
I hear what you're saying, but you still end up with a world in which people see themselves as having to defend themselves from something.
The ideal that you and I are to shoot for is one in which people are free o live together, without having to consider threats or evils. This world centers around Jesus. In it the needs and (good) desires of our humanity are fulfilled in and because of Jesus. Unfortunately for those of us born and bread in a modern or postmodern world this is not a world that fits any models or methodologies we have to grasp this. The only model or methodology that can be used to get it is Jesus himself. And Jesus is not a model or methodology, he is fully God and fully man. I know you know that, but it always needs to be said.
This is not something in which a capitalist can accumulate wealth, nor is it something beneath which a marxist can find the slightest hint of class struggle or revolution.
If you think about the needs of humanity to continue and picture those needs met in generosity and joyfulness, that is as imaging that is held firmly aloft by the pillar that is Jesus.
Now, I ask you, given that rubric: what is the answer to the current crisis? 'Cause it's fuzzy to me.
Grace and Peace,
Jared
Now your talking! I agree, but the world you are describing is called heaven, or the new earth when Christ returns to finish off sin and death for good. Until then we have to deal with it. So we have to build systems that can live under His lordship without ignoring the fact that ignorant, unreasonable evil still exists.
I think a big part of the answer is simple and it's the same answer for many of the problems in the American church...get smaller. Love God and Love your NEIGHBOR. Let's focus on our families and our neighborhoods. Make those work, and then go share with other families and neighborhoods in what ways you were successful.
Let's stop focusing on changing entire cities or nations, we are incapable of doing that. The direct realm of influence of a human being is a radius of around 30 ft from your body. Let's be the priests and ministers of that, and let God then use our collective efforts to do what He does and redeem cities, states and nations, even the whole world.
Post a Comment