Saturday, September 20, 2008

Government Intervention

So, the Bush administration's failure to pay attention and regulate the mortgage business to keep risk levels reasonable means that the taxpayers are now on the hook for the $85 billion buyout of AIG and for bailing out Fannie Mae and Freddie Mac.

Now the Fed is asking for $700 billion - that is not a typo - to buy bad mortgages. This is the cost of not regulating. Isn't it amazing how quickly even Republicans think government is the solution, not the problem, when the economy and the financial health of the nation is on the line? Why didn't they figure this out a few years ago, when this mess could have been prevented?

And keep repeating to yourself: privatize profit (and don't tax it sufficiently), socialize losses.

6 comments:

Paul H. Muller said...

Those with a predilection for conspiracy would say that the Republicans are intentionally trying to bankrupt the US government by committing future tax receipts to solve the current crisis.

They want a sort of New Deal in reverse and believe it will take a 1929 style shock to provide the necessary environment for their radical changes.

The same ideology was at work in the run up to the Iraq war, so you can guess how this is likely to turn out.

A.C. Douglas said...

Why didn't the Republicans figure this out before? Because the current Republican power elite are all ideologues -- you know, idiots as are all ideologues (ideologue is practically a synonym for idiot). If there's anything worse than a leftist ideologue (and that's a tough act to beat in the worse category), it's a right-wing ideologue. Those people are total loonies.

ACD

Lisa Hirsch said...

Paul, I hope there is no conspiracy of that type. Of course, I believe that the No Child Left Behind Act is part of conspiracy to destroy public education, so...

ACD, yeah.

Daniel Wolf said...
This comment has been removed by the author.
Daniel Wolf said...

Above and beyond the price tag, the legislation gives the Treasury Secretary unlimited authority to carry out the act (regulations, appointments, etc.) and the execution is immune from judicial review. This isn't anti-New Deal legislation, this is more like the Reichstag voting itself out of business.

Lisa Hirsch said...

Sadly, yeah.