The coming financial crisis

[rjs246]

True fiscal conservatives everywhere should be outraged with this.

Why qualify it like that? Everyone who benefits from the merits of responsible capitalism should be outraged.

[ice grillin you]

g dub better not get a farging library

[Cerevant]

[rjs246]

Just caught part of Paulson's press conference and it's making me face smachingly angry. Irresponsible business practices leads to failed companies leads to panic leads to a panicked government response leads to a new unnecessary government agency (which both McCain and Obama are backing, farging tools) leads to higher taxes to pay for the mistakes of massive evil corporations leads to NO ACCOUNTABILITY FOR THOSE IRRESPONSIBLE ACTIONS.

farg that. Spend my taxes on fixing the farging roads or improving our educational system. Not on bailing out, and ensuring the future bail outs, of massive soulless make-money-at-all-costs corporations. farg.

[ice grillin you]

did barry really come out and support the creation of a new agency...yesterday he was leaning against it and this morning he was uncommitted and wanted to meet with paulson and bernake today before he fully formulated his own plans

[rjs246]

I just saw his speech and he was backing Paulson's request for "the authority to address the situation". Paulson has come out and said that his plan is to form a new agency to handle this... which is of course what the SEC is supposed to be there for. So now what? We have two agencies that are in charge of regulating our financial caretakers? Are they going to dissolve the SEC and create a new set of regulations that actually attempt to create a level playing field and encourage responsible business practices (which would be fine with me)? Who knows, but Obama appears to be backing Paulson's plan...

[ATV]

How does our government pay for the Iraqi occupation when we can't even afford to rebuild our roads? Magic money. How does it pay for all these bailouts? Why more magic money, of course.

When is the magic money fairy going to want her money back, and who are going to be the ones that will pay for it?

[Phanatic]

$700 BILLION to bail out the financial market... The US government might just devalue the dollar to shtein so there's nothing left. We're farged...

[rjs246]

The thing is that this asinine plan will work, short term. People will see that the Dow is going up and it will make them feel better because they don't know shtein about shtein and everyone will think that everything is hunky dory.

But ultimately that's where we've gotten ourselves. Everyone is talking about confidence in the marketplaces, but no one is addressing the real problems. They're making people feel better about everything because this awful plan makes the speculators that control wall street happy so the Dow goes up. Yippee skippee! The Dow goes up so things must be good! Imbeciles.

If they would address the real problems and let these hideous failures fail as they should the markets would not recover so quickly, but will end up being healthy in the long run. These panic-stricken quick fixes do nothing other than guarantee that this shtein will happen again.

I can't be the only one who thinks this, right? There have got to be people who didn't drop ECON001 at Penn State who can see that this is a bad idea, right? RIGHT?

[Diomedes]

Hey, I'm on board.  New, redundant federal agencies: bad.  Bailouts for irresponsible behavior (whether corporate or individual): bad.  Printing money to cover gaps in the system:  bad.  Borrowing from China: bad.

But what do you expect?  The fox been in the henhouse for decades now.  The pigs are at the farmhouse table.  The circle of life is unbroken.

[Father Demon]

Whatever.

I invested $500,000 in a Dow index fund, and plan on clearing 20% in a month's time.


Well, I would have if I had half a mil to do that with.

[ATV]

I can't be the only one who thinks this, right?

Nope. I never took Econ 101, but it seems pretty obvious that this is a bandaid approach, in my view intended to limp the economy along to the November 4th finish line.

[SD_Eagle5]

I can't be the only one who thinks this, right? There have got to be people who didn't drop ECON001 at Penn State who can see that this is a bad idea, right? RIGHT?

Taxes haven't been raised since Bush took office, that would be fine if he didn't spend frivously and push the national debt up to 9.4 trillion. Inflation/money in circulation/taxes/debt is such a balancing act that regardless of who the next President is they're walking into a mess. The bailouts were sort of necessary to rebuild confidence in the marketplace, so short term it was a good move even though we're flipping the bill.

[Phanatic]

Creating yet another government agency and more bureaucracy usually causes more problems.

[Seabiscuit36]

How we became the United States of France

This is the state of our great republic: We've nationalized the financial system, taking control from Wall Street bankers we no longer trust. We're about to quasi-nationalize the Detroit auto companies via massive loans because they're a source of American pride, and too many jobs — and votes — are at stake. Our Social Security system is going broke as we head for a future where too many retirees will be supported by too few workers. How long before we have national healthcare? Put it all together, and the America that emerges is a cartoonish version of the country most despised by red-meat red-state patriots: France. Only with worse food.

Admit it, mes amis, the rugged individualism and cutthroat capitalism that made America the land of unlimited opportunity has been shrink-wrapped by a half dozen short sellers in Greenwich, Conn. and FedExed to Washington D.C. to be spoon-fed back to life by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson. We're now no different from any of those Western European semi-socialist welfare states that we love to deride. Italy? Sure, it's had four governments since last Thursday, but none of them would have allowed this to go on; the Italians know how to rig an economy.

You just know the Frogs have only increased their disdain for us, if that is indeed possible. And why shouldn't they? The average American is working two and half jobs, gets two weeks off, and has all the employment security of a one-armed trapeze artist. The Bush Administration has preached the "ownership society" to America: own your house, own your retirement account; you don't need the government in your way. So Americans mortgaged themselves to the hilt to buy overpriced houses they can no longer afford and signed up for 401k programs that put money where, exactly? In the stock market! Where rich Republicans fleeced them.

Now our laissez-faire (hey, a French word) regulation-averse Administration has made France's only Socialist president, Francois Mitterand, look like Adam Smith by comparison. All Mitterand did was nationalize France's big banks and insurance companies in 1982; he didn't have to deal with bankers who didn't want to lend money, as Paulson does. When the state runs the banks, they are merely cows to be milked in the service of la patrie. France doesn't have the mortgage crisis that we do, either. In bailing out mortgage lenders Fannie Mae and Freddie Mac, our government has basically turned America into the largest subsidized housing project in the world. Sure, France has its banlieus, where it likes to warehouse people who aren't French enough (meaning, immigrants orAlgerians) in huge apartment blocks. But the bulk of French homeowners are curiously free of subprime mortgages foisted on them by fellow citizens, and they aren't over their heads in personal debt.

We've always dismissed the French as exquisitely fed wards of their welfare state. They work, what, 27 hours in a good week, have 19 holidays a month, go on strike for two days and enjoy a glass of wine every day with lunch — except for the 25% of the population that works for the government, who have an even sweeter deal. They retire before their kids finish high school, and they don't have to save for a $45,000-a-year college tuition because college is free. For this, they pay a tax rate of about 103%, and their labor laws are so restrictive that they haven't had a net gain in jobs since Napoleon. There is no way that the French government can pay for this lifestyle forever, except that it somehow does.

Mitterand tried to create both job-growth and wage-growth by nationalizing huge swaths of the economy, including some big industries, including automaker Renault, for instance. You haven't driven a Renault lately because Renault couldn't sell them here. Imagine that. An auto company that couldn't compete with a Dodge Colt. But the Renault takeover ultimately proved successful and Renault became a private company again in 1996, although the government retains about 15% of the shares.

Now the U.S. is faced with the same prospect in the auto industry. GM and Ford need money to develop greener cars that can compete with Toyota and Honda. And they're looking to Uncle Sam for investment — an investment that could have been avoided had Washington imposed more stringent mileage standards years earlier. But we don't want to interfere with market forces like the French do — until we do.

Mitterand's nationalization program and other economic reforms failed, as the development of the European Market made a centrally planned economy obsolete. The Rothschilds got their bank back, a little worse for wear. These days, France sashays around the issue of protectionism in a supposedly unfettered EU by proclaiming some industries to be national champions worthy of extra consideration — you know, special needs kids. And we're not talking about pastry chefs, but the likes of GDF Suez, a major utility. I never thought of the stocks and junk securities sold by Goldman Sachs and Morgan Stanley as unique, but clearly Washington does. Morgan's John Mack calls SEC boss Chris Cox to whine about short sellers and bingo, the government obliges. The elite serve the elite. How French is that?

Even in the strongest sectors in the U.S., there's no getting away from the French influence. Nothing is more sacred to France than its farmers. They get whatever they demand, and they demand a lot. And if there are any issues about price supports, or feed costs being too high, or actual competition from other countries, French farmers simply shut down the country by marching their livestock up the Champs Elysee and piling up wheat on the highways. U.S. farmers would never resort to such behavior. They don't have to: they're the most coddled special interest group in U.S. history, lavished with $180 billion in subsidies by both parties, even when their products are fetching record prices. One consequence: U.S. consumers pay twice what the French pay for sugar, because of price guarantees. We're more French than France.

So yes, while we're still willing to work ourselves to death for the privilege of paying off our usurious credit cards, we can no longer look contemptuously at the land of 246 cheeses. Kraft Foods has replaced American International Group in the Dow Jones Industrial Average, the insurance company having been added to Paulson's nationalized portfolio. Macaroni and cheese has supplanted credit default swaps at the fulcrum of capitalism. And one more thing: the food snob French love McDonalds, which does a fantastic business there. They know a good freedom fry when they taste one.