Socializing Loss, Privatizing gain; Part 2,218,250

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1. mike w. says:

   August 18, 2008 at 2:01 pm

   Great, they’ve got companies that are dismal failures and their plan is “let’s throw money at them.”

   It’s profoundly stupid regardless of whether those involved have a “D” or “R” next to their names.

2. Not Brian says:

   August 18, 2008 at 2:37 pm

   The Fannie/Freddie debacle is not about privatization or free markets. It is not about government management of the economy. This is about unchecked greed and bi-partisan raping and pillaging of our pocketbooks.

   Government sponsored oligopolies with politically connected boards and no oversight are designed not to work – (except for the wall street firms who got to dump exposure to the housing market on Freddie/Fannie, the extravagantly paid management, and all the pols who took campaign contributions from the firm they should provided quality oversight)… These GSEs were worse than government programs… yes, anything the government runs is inefficient, but this crony capitalistic nonsense is open to outright theft…

   I wonder if every rep/senator is going to give back the hundreds of millions of dollars the quasi-governmental agency they oversaw gave them in political contributions in its guise as a privately held corporation… they are all theives (the Obamessiah included)! The Republicans and their version of capitalism (which looks a lot more like crony socialism lately) and the democrats pandering to the financial firms are all complicit… it is criminal.

   Projected potential obligations for the taxpayer: $1.4 TRILLION

   This may end up being over $20K per household added to the national debt… whether you see it in your tax bill or not, nothing is free, and we are all going to pay.

   This is where we are robbed… while we all discuss the pedestrian and predictable red state vs blue state polemic arguments this crime goes on and no one seems to care. This may cost us more than the Iraq war has to date… this is a massive transfer of wealth from the have-nots to the haves, the housing bill has done nothing to help the people who need help to keep their homes, the bill legalized theft.

   Not that I have strong feelings on the subject…

3. Steve Newton says:

   August 18, 2008 at 3:06 pm

   Tell me with a straight face that President Obama would have let Fannie and Freddie fail….

4. mike w. says:

   August 18, 2008 at 3:09 pm

   Neither side would. It would piss off too many voters, and it’s easier to just throw money at the problem. It’s not like it’s their money.

5. Not Brian says:

   August 18, 2008 at 3:31 pm

   Both parties have been taking moey from them and both parties knew what is now happening would happen and they are all complicit.

   You can go back to 2001 and find articles in financials about finance professors and people from banks commenting on the post 9-11 interest rates creating a huge market for alternative types of bond-like investments (the ortgage backed CDOs being a primary one)… as the dollars rolled in it was obvious there was going to be a bubble – there was no oversight, no check on capitalization requirements, no accounting requirements that the banks recognize their potentioal obligation. No one was minding the store.

   The need for places to park money at better than 2.5% began a cycle of the mortgage industry doing anything to get loans providing liquidity where it made no sense…

   Last year when Fannie and Freddie began to accept jumbo loans and alt-A paper it was the beginning of the end. The move basically let banks start dumping some of their riskiest garbage on the GSE’s – the GSE’s did not maintain their capital ratios and this is the obvious result. By this point everyone in the industry knew what was going down… they stole from the treasury by allowing this.

6. Nancy Willing says:

   August 18, 2008 at 3:51 pm

   Tell me with a straight face that President Obama would have let Fannie and Freddie fail….
   *
   Steve, that’s not the point, IMHO.

   Our august beltway’s K Street Sluts atmosphere has allowed the deregulation of these markets’ safeguards.

   Most blame falls on GOPers but not all.

7. Nancy Willing says:

   August 18, 2008 at 3:53 pm

   oh, and what Not Brian said.

8. Not Brian says:

   August 18, 2008 at 3:57 pm

   And to answer the point of DBB’s post –

   No, McCain would have done the same thing – but so would Obama.

   And I really do not buy that they have to because voters would be mad, they have sold it that way – the bill was like 1% consumer protection and 99% bailout.

   I think it is insane that this happened… I am to the left of Marx and between this and FISA why would I vote for Obama?

   Change? What is changing? The dems seem to be diving right to the bottom with the Republicans… what is going to change when he takes office?

9. edisonkitty says:

   August 18, 2008 at 4:12 pm

   This is a giant turd sandwich and every taxpayer is going to take a bite. Obama could not fix this in any other way, and will not. It’s political suicide for either party to attempt to. However, the point of this post was to assign blame for preparing the meal. The Republicans claim that big government doesn’t work. Then they get elected and prove it. This is a case in point.

10. meatball says:

    August 18, 2008 at 4:58 pm

    I blame Dave Burris(seriously) and his ilk.

11. Glenn S. says:

    September 23, 2008 at 11:19 pm

    The point is to be preemptive and preventative, not reactionary and try to spread the blame (and bailout payments!) around. Then the real question becomes: would this have happened under an Obama (Liberal) presidency vs. a McCain (Conservative) one? I doubt it would be to the same extent.