WE LIVE IN BUSH'S ECONOMY NOW
So, I was running by the newsstand the other morning and came across a headline in the LA Times titled IndyMac Bank seized by federal regulators. It starts off this way ...
The federal government took control of Pasadena-based IndyMac Bank on Friday in what regulators called the second-largest bank failure in U.S. history.
It then goes on to say ...
The takeover of IndyMac came amid rampant speculation that the federal government would also have to take over lenders Fannie Mae and Freddie Mac, which together stand behind almost half of the nation's mortgage debt.
Welcome to the Republican economy, ladies and gentlemen! If you're a large corporation, feel free to do whatever you want to make a profit. And -- should you fail -- no worries: the government's got your back. If however, you're just an average American, don't complain to us about your economic struggles. Because -- as McCain's chief economic advisor, Phil Gramm, said -- you're all just a "bunch of whiners." I think these recent financial events were summed up nicely by Newsweek's Daniel Gross ...
Should Washington intervene and explicitly do what has been implicitly assumed all along--backing Fannie Mae and Freddie Mac's debt--critics on the left will correctly claim that it's another example of privatizing profit and socializing risk.
Yep, that is in fact exactly what I'm doing right now. And this whole banking fiasco also got me thinking about the airline industry. Here's a quote from a recent article on the subject ...
US Airways Group Inc. is among a consortium of 12 U.S. air carriers asking the U.S. Congress to address the actions of oil speculators, whom they blame for escalating fuel prices ... The airlines’ chief executives say regulatory oversight of market speculation has declined in recent years, and the industry sees a need for reform to ensure speculators do not overheat the market to a point that hurts the consumer.
Is it just me, or do you interpret this as the airline industry basically begging the government to regulate more? All of a sudden DemocratIC principles seem a little more attractive, huh?
Labels: fannie mae, freddie mac, indymac, regulation
posted by Trekking Left @ 1:04 PM
6 comments
6 Comments:
Not sure what your point is about the airline industry TL. This industry was ruined by deregulation. It was speculators that wanted to poach the low hanging fruit (high profit routes) from the legacy carriers who had vast amounts of money tied up in infrastructure to support nation wide systems that were mandated by the feds. Now that infrastructure has been destroyed and the result is the chaos you see today.
It's also the fault of the bargin hunters that whine about airfares and save $30 dollars by using the fly by night wannabies so they can blow the savings on $10 beers at the airport bars.
Jet Blue was the worst thing that happened to the airlines. A paper company built on cheap money from Soros and new, free airplanes from Airbus. All their maintenance is done by illiterate non english speaking Salvadorans. Now that they actually have to start paying the real cost of heavy maintenance(after five years) you can see their stock price has plummeted along with the health of the legacy carriers.
Hopefully with the raising cost of airfares maybe the riff raff shorts wearing, baby carrying, baseballcap wearing non showering cheapskate public pukes will stay home and leave us pros fly in peace and comfort for a change.
sa1 said "Not sure what your point is about the airline industry TL. This industry was ruined by deregulation ..."
My point is exactly that ... The Republican philosophy is to deregulate everything and let the free markets take care of the rest. I'm just finding it ironic to see -- now that the economy is tanking -- everyone is demanding more regulation.
I wasn't really making a statement about the airlines per se. However, I'm sure many of them were all for deregluation when it suited their needs, but now they are asking the government to regulate the oil industry.
The neo-con motto: "Steal with impunity". I could make a list, but you know it better than I do.
P.S. Wanna buy some rust bucket refineries? No? Too bad, Mr. Taxpayer, your gubbermint will probably buy them out for top dollar so the pukes don't have to spend their billions in profits updating. They can unload everything that sucks on J.Q. Public and start over with free pyramid scheme money. That's okay, I'm on a buyer's strike, they are going to have to steal twice as fast now. BWA AH AH!
As always, Robert Reich marshals the historical perspective on voo doo economics, as well as pointing toward sane solutions.
"But now we have to rethink safety nets. Right now, nets are being spread for the wrong people. The giants of Wall Street along with Fannie and Freddie get bailed out but there's still no relief in sight for most homeowners who can't pay their mortgages. Corporations that don't deliver on their pension obligations are helped but there's nothing for retirees and small investors whose savings are drying up because of Wall Street's decline. Small investors are losing their shirts but the Fed stands by to help the biggest.
"Yet I have to believe the end of the Great Moderation will eventually result in a broader safety net. Maybe not the old forms of social insurance, but new ones like universal health insurance, earnings insurance, and savings accounts in which the dollars you put away are supplemented by government dollars."
There's a good post on Huffington today about this (titled The Real Legacy of the 'Reagan Revolution') ==> http://www.huffingtonpost.com/robert-scheer/the-real-legacy-of-the-re_b_112994.html ...
Here's a quote:
'Hows about some "tough love" for those bankers suddenly in trouble? You know, the sink-or-swim approach of "welfare reform" that Gramm and Clinton applied to poor people to end their addiction to government handouts. Or, perhaps a heavy dose of "faith-based" personal responsibility initiatives to get those knaves who messed up our entire housing market back on the straight and narrow. Sounds ridiculous I know, because nothing but the bleeding-heart, big-government, throw-money-at-the-problem approach will do when it comes to salvaging corrupt corporations.'
I agree that the bailouts are helping the executives (Republicans) at the expense of the shareholders (pension funds and 401k's: Democrats). The CEOs walk away and play golf, or get onto some more corporate boards. I guess Republicans know about teamwork.
But, letting these companies just fall flat would just make things hard for the depositors (Democrats too, most of them), won't help the shareholders, and probably won't hurt the CEOs.
How about bailing out the companies, and putting the CEOs into jail too? Where's the US Justice Department on this? (Unh... oh, yeah).
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