8
   

Socialism on Bush's watch?

 
 
McTag
 
Reply Sun 7 Sep, 2008 01:03 pm

Giant mortgage firms Freddie Mac and Fannie Mae to be taken over by the government to stabilise the economy?

Isn't this a damned pinko liberal exercise in socialism?
 
cicerone imposter
 
  1  
Reply Sun 7 Sep, 2008 01:36 pm
No. It's actually a bailout for the rich investors who Bush doesn't want to tax.
0 Replies
 
hawkeye10
 
  1  
Reply Sun 7 Sep, 2008 01:40 pm
@McTag,
bush has always acted like the fed government is an ATM for his group of friends, the pay out to FMac and FMae is par for the course. Not scoicalism, robbery of the public till
0 Replies
 
Ramafuchs
 
  -2  
Reply Sun 7 Sep, 2008 03:19 pm
@McTag,
The word Socialism and communism is anethema in american culture.
Consummption,
patriotism
banal arrogance
barbarism are the words one should get used to do .
sorry had i forgotten the basic human word
civil courage?
0 Replies
 
georgeob1
 
  2  
Reply Sun 7 Sep, 2008 04:30 pm
@McTag,
McTag wrote:


Giant mortgage firms Freddie Mac and Fannie Mae to be taken over by the government to stabilise the economy?

Isn't this a damned pinko liberal exercise in socialism?


In the first place I don't think the economy is seriously threatened by them. However, these two quasi government corporations have long been potentially dangerous hermaphrodites strangely combining capitalist investment and an implied government guarantee. Their managements have abused the public trust placed in them, and the first steps in the takeover have already involved the dismissal of their CEOs.

"damned pinko liberal exercise in socialism" ? Possibly, but far more likely is their organized dismemberment.
Steve 41oo
 
  2  
Reply Fri 12 Sep, 2008 02:53 am
@georgeob1,
but aren't you embarrassed George? The US government should be.
georgeob1
 
  2  
Reply Sat 13 Sep, 2008 08:37 pm
@Steve 41oo,
Steve 41oo wrote:

but aren't you embarrassed George? The US government should be.


No, not at all. These corporations are an excellent example of "progressive" American liberal political/economic innovations. They were created to facilitate the capitalization of home mortgages and, by attracting capital through the implied, but unstated, government guarantee, promote individual home ownership -- a noble goal. Moreover it all worked very well for a while.

Eventually both corporations took on the worst features of both government and the private sector - driving out all the good ones. Senior executive positions became political plums (Franklin Raines, a political advisor to Bill Clinton, took over Fannie Mae in the late 1990s and very quickly raised executive compensation to rather astronomical levels, and built a rather lavish new headquarters building in Fairfax Virginia.) Modern financial devices, particularly the packaged securities based on portfolios of individual mortgages, very quickly diluted any sense of accountability for loan qualifications, creating the home price bubble we experienced in the past decade.

It is time now to dismember these degenerate relics of a once good idea. Government programs tend to continue long after any need for them has passed and long after the bureaucracies involved have thoroughly corrupted their intended purpose. It is always a good thing to see one of these relics actually taken apart.

Were you embarassed by the UK government's bailout of Northern Rock?
Steve 41oo
 
  3  
Reply Sun 14 Sep, 2008 03:48 am
@georgeob1,
georgeob1 wrote:

Steve 41oo wrote:

but aren't you embarrassed George? The US government should be.


No, not at all. These corporations are an excellent example of "progressive" American liberal political/economic innovations. They were created to facilitate the capitalization of home mortgages and, by attracting capital through the implied, but unstated, government guarantee, promote individual home ownership -- a noble goal. Moreover it all worked very well for a while.

Eventually both corporations took on the worst features of both government and the private sector - driving out all the good ones. Senior executive positions became political plums (Franklin Raines, a political advisor to Bill Clinton, took over Fannie Mae in the late 1990s and very quickly raised executive compensation to rather astronomical levels, and built a rather lavish new headquarters building in Fairfax Virginia.) Modern financial devices, particularly the packaged securities based on portfolios of individual mortgages, very quickly diluted any sense of accountability for loan qualifications, creating the home price bubble we experienced in the past decade.

It is time now to dismember these degenerate relics of a once good idea. Government programs tend to continue long after any need for them has passed and long after the bureaucracies involved have thoroughly corrupted their intended purpose. It is always a good thing to see one of these relics actually taken apart.

Were you embarassed by the UK government's bailout of Northern Rock?
No, but then I'm not the one advocating laissez-faire capitalism. I was annoyed though to think that a perfectly good UK bank was brought down by the US sub prime lending fiasco.

It amazes me that the US Treasury has to nationalise US banks to prevent a total collapse, at enormous cost to the US taxpayer...and everyone carries on as if nothing had happened. The fact is the arch-capitalists themselves have brought the capitalist system to the brink of disaster, knowing that however much they screw up, they will be saved from themselves by the government. They walk away with their billions $ free to do it all over again, whilst the tax payer is left with the wreckage. Surely you can see there is something wrong here.

georgeob1
 
  1  
Reply Sun 14 Sep, 2008 09:04 am
@Steve 41oo,
Steve 41oo wrote:

No, but then I'm not the one advocating laissez-faire capitalism. I was annoyed though to think that a perfectly good UK bank was brought down by the US sub prime lending fiasco.

It amazes me that the US Treasury has to nationalise US banks to prevent a total collapse, at enormous cost to the US taxpayer...and everyone carries on as if nothing had happened. The fact is the arch-capitalists themselves have brought the capitalist system to the brink of disaster, knowing that however much they screw up, they will be saved from themselves by the government. They walk away with their billions $ free to do it all over again, whilst the tax payer is left with the wreckage. Surely you can see there is something wrong here.


Did I advocate "laissez faire" capitalism ? I strongly suspect that I favor far less government interference in economic matters than perhaps you do. However, that is not to say I favor none at all. It appears you leave a great deal of room on your right.

It may be convenient for you to blame your political, social, and economic problems on the United States. However the act of doing so marks you as a rather credulous and unthinking consumer of popular fantasies. The securitization of consumer loans is a widespread phenomenon - every bit as much a part of the City of London financial operations as those in New York. Indeed the housing bubble in Britain (and Ireland as well) is by many measures relatively worse than that here.

I'm not aware that Northern Rock was brought down by U.S. mortgages or securities based on them. Precisely the same phenomenon was occurring in the UK. To the extent that it was the case. it is clear that Northern Rock was itself part of the self-delusion behind the bubble.

Fannie Mae and Freddy Mac are not ordinary banks. They were the creation of "progressive" Democrat politicians which operated with a government charter and a strongly implied government guarantee of their financial operations. Though initially they did some good, flaccid government oversight, and some serious mischief on the part of government appointed executives eventually brought them down. It would have been politically impossible to destroy these institutions before their evident financial failure because of the Democrat firestorm that would surely follow. Now that = on their own - they are on the brink of collapse, it is politically possible to do the long overdue deed.

Does the UK have any problems that are not caused by the United States?
0 Replies
 
 

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