Corporatist/socialist state continues to grow, federal government planning broad new bailout
Posted on September 19th, 2008 by bile Tags: bailout, Ben Bernanke, CNN, fascism, federal government, Federal Reserve, Federal Reserve System, Fox News, Glenn Beck, Henry Paulson, Jim Rogers, MSNBC, Peter Schiff, real estate, real estate correction, Ron Paul, Senate, Stanford Group, state socialismThe federal government, in what will be its most far-reaching attempt yet to contain the financial crisis, is poised to establish a program to let banks get rid of mortgage-related assets that have been hard to value and harder to trade.
Leaders from the House and the Senate were briefed on Thursday evening by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke.
“The root cause of distress in capital markets is the real estate correction and what’s going on in terms of the price declines in real estate,” Paulson said at a press briefing after the meeting. “So we’re coming together to work for an expeditious solution aimed right at the heart of this problem, which is illiquid assets on financial institutions’ balance sheets.”
Many details of the plan remained unclear, but it is likely the government would take on tens of billions of dollars in mortgage assets - if not more.
One way the agency under discussion could work is by setting up bulk auctions to buy mortgage assets from financial institutions. The auctions would be for set dollar amount purchases. Companies that want to offload the hard-to-sell assets from their balance sheets bid to sell to the government at a huge discount. The company willing to sell at the lowest price wins.
The government would then be able to sell the assets back into the market when it wanted.
According to policy research firm the Stanford Group, such a setup would allow the government to refinance borrowers in the loans owned by the government, thereby lowering the risk of their defaulting and eventually boosting the price of the mortgage security in which those loans are packaged.
“Lowering the risk” = artificial stimulus = another bubble.
These people just don’t learn. A single school of economists have predicted this and warned against all this for nearly 100 years and yet every time something happens they are ignored. I watch Ron Paul this morning on CNN describing the Austrian position on this crisis and the host shakes his head in agreement. Glenn Beck has him on all the time to weigh in as does MSNBC and Fox, Fox Business. His TV appearances have shot through the roof relative to when he was running for president and yet his words fall on ear unwilling to accept reality. The ocean of fascist/socialist diatribe nearly drowns out one of the only people speaking intelligently on that moving picture box.
Frustrating.
UPDATE: Paul on CNN this morning
3 Responses to “Corporatist/socialist state continues to grow, federal government planning broad new bailout”
Leave a Reply
You must be logged in to post a comment.
September 19th, 2008 at 8:57 am
Why is it that when you talk with someone one-on-one, you’ll hear
1 - That none of the mainstream candidates are addressing any of the problem
2 - Third party / non-mainstream candidate speaks the truth about topic X.
Beyond that limited conversation, everyone seems to resort back into red team / blue team politics. I had the conservative radio on the other day (96.9 wtkk) on my way home, listening to a supposed Libertarian, Jay Severin, go on and on about some ticky-tack issue he had with Obama. (I think it may had been something about not knowing what “AIG” stood for.)
Mainstream media can be boiled down into: Whine whine whine about people picking on my candidate. Booo booo the other guy. He or she is an out of touch commie. And that other third party guy, yeah he was right, but he’s a moon bat, so whatever, we can’t stop paying attention to him when this all blows over.
For fuck’s sake, we are completely beyond name calling politics here. The financial industry is blowing up around us and Congress is out to fucking lunch while the Fed and Treasury carry on activities that would make Soviet Russia blush. And radio and TV shows are still airing playground politics? Frustrating is an understatement.
September 19th, 2008 at 9:28 am
I’ve sortof come to terms with the market imploding. Now I’m worrying about the aftermath. We can safely bet that nationalisation will stay and perhaps continue. My hope is that Paul and others who are truly providing solutions are heard to some extent. I’m not asking for a sea-change but even if only 1-2% of the population becomes better educated as to what happened here perhaps down the road things could be changed for the better. The fact that I’ve had 3 people ask me to borrow The Case Against the Fed in the past week is somewhat promising. Even if you don’t completely agree with Rothbard I think it’s hard to deny many of the points and in the least opens up the dialog. The power of a central bank is grossly underestimated or considered and the topic really should be on the table again.
September 19th, 2008 at 10:17 am
I feel as if the pendulum is swinging fast to nationalization and increased gov’t intervention while the population at large continues to focus on partisan politics. People may look at their quarterly 401k statements and gasp, but in the end, it’s Obama’s choice of lapel pins that provokes them to call into talk shows. Grumble, grumble about the Wall Street bankers and the Fed, but any kind of reform is labeled fringe at best.
Ron Paul has every right to say, “I told you so,” but he is more tactful than that. It would be nice if the Barney Frank’s and Harry Reid’s of the world, who have publicly stated that they “Do not know what to do… let’s adjourn,” get out of the way and let people who understand the issue work to solve it.
Instead I have grown to understand politics like religion. There is little sense in trying to debate something when most employ faith based arguments. The emotional appeal of red/team blue team trumps logic. The market will implode and everyone will be affected. I guess we can only hope that then a few pull their heads out of their asses and wake up.