by Eric Martin
Actually, it's not socialism when you do it like this. This is the magic of the free market:
As Lehman Brothers careened toward bankruptcy in 2008, the New York Federal Reserve Bank came to its rescue, sopping up junk loans that the investment bank couldn't sell in the market, according to a report from court-appointed examiner Anton R. Valukas.
The New York Fed, under the direction of now-Treasury Secretary Tim Geithner, knowingly allowed itself to be used as a "warehouse" for junk loans, the report says, even though Fed guidelines say it can only accept investment grade bonds. [...]The Valukas report found clear evidence that the New York Fed knew that Lehman was sending it garbage that it had no intention to market. In other words, the baskets of assets were created for the specific purpose of selling to the Fed for far more than they were worth.
Also, we really need to end this class warfare and increases in social safety net spending which is as unfair to the uber-wealthy as it is destructive to our society - creating a moral hazard and encouraging laziness and other bad behavior. Also, bankrupting us.
Only in America do working class people rise up in anger at the thought of government regulated/subsidized health insurance, but nary a peep about the abuses of massive corporate welfare and giveaways.
(via)
it's not polite to criticize your betters. and we Americans are a polite people.
Posted by: cleek | March 22, 2010 at 04:38 PM
Because we don't really understand corporate welfare. The people need someone to explain it in simple terms. By the time I got halfway through figuring out the bailouts my head hurt.
Posted by: Wayne VanDerwood | March 22, 2010 at 04:40 PM
" but nary a peep about the abuses of massive corporate welfare and giveaways."
Nary a peep? Really? It is the only issue that may cost the Democrats seats in the next election. I think the middle class has been pretty clear on TARP and GM.
Posted by: Marty | March 22, 2010 at 04:40 PM
I think the middle class has been pretty clear on TARP and GM.
Not if they blame the Dems for TARP by voting for Republicans. TARP was a Bush admin policy, and if there's one thing that the GOP stands for, it's less regulation on finance. And more tax breaks for finance too, from cap gains to hedge fund manager loopholes (Chuck Schumer too on that one).
Posted by: Eric Martin | March 22, 2010 at 04:45 PM
if there's one thing that the GOP stands for, it's...
that libruls are evil and therefore must be opposed no matter what they do.
Posted by: cleek | March 22, 2010 at 04:49 PM
"Not if they blame the Dems for TARP by voting for Republicans. "
I am not clear why we went from the middle class objecting to corporat greed to it's the Republicans fault, but Obama has, just like in executive powers, continued the Bush administrations policies.
Posted by: Marty | March 22, 2010 at 04:50 PM
Not if they blame the Dems for TARP by voting for Republicans.
I'm betting on Republicans campaigning heavily on a populist "Obama is the friend of Wall St" theme this fall.
It doesn't matter if it makes sense or not. The slogan will be "that Democrat took your money and gave it to a rich guy!"
It will actually be hard for Democratic incumbents to argue against. The TARP thing started under Bush, but most of folks' memory of it will be under Obama.
Tag, you're it.
Posted by: russell | March 22, 2010 at 04:52 PM
I am not clear why we went from the middle class objecting to corporat greed to it's the Republicans fault
It's about how to address the problem. Who to protest, who to vote out, who to blame. My point is that if the middle class is upset about corporate abuse, their only options are to:
1. Vote for more and better Dems (Feingold, Frank, Sanders); or
2. Vote for Ron Paul Republicans.
Voting for centrist Dems or any other Republican is a protest vote that will actually make things worse.
I mean, it's a democracy right? So the whole point is finding out who to blame, and voting for lawmakers that will do better.
That's how we got there.
Posted by: Eric Martin | March 22, 2010 at 04:54 PM
Adding, Marty and Russell, that the handling of financial regulation from Dodd and the Obama admin thus far has been pretty crappy.
And yeah, Geithner is up to his eyeballs in it. Even the linked article says so.
But, again, voting in protest in favor of Republicans that are deeper in the bankers' pockets is the kind of insanity that I'm lamenting.
Getting primary challenger to Chuck Schumer is fine, though.
Posted by: Eric Martin | March 22, 2010 at 04:56 PM
Obama has, just like in executive powers, continued the Bush administrations policies.
And he hasn't ended the Iraq War or closed Guantanamo, so clearly the Democrats are more to blame for those things than the GOP.
Posted by: Mike Schilling | March 22, 2010 at 05:29 PM
The weird thing is that the wild eyed right/left political discourse thing makes no sense, considering how much like the Bush administration, the Obama administration is. Considering the decibel level, one would assume we would see also a corresponding wild swing in policy initiatives, which clearly is not the case. I think its safe to say that the mainline consistency and trajectory between the two poles can best be characterized broadly as, corporatism. Bush and Obama are both corporatist, as was Clinton, because all pursued policies that colluded business and political interests in a mutually reaffirming circle that precludes both socialist, or libertarian alternatives to the (long developing and) ongoing crisis of capital. The central problem with this mutually reaffirming circle is that grip tends to tighten its grip as the major institutions of society consolidate into a singular vision of a one party system.
Posted by: anna missed | March 22, 2010 at 11:43 PM
Whoops, that should read excludes not precludes socialist, or liberal alternatives.
Posted by: anna missed | March 23, 2010 at 01:33 AM
It is the only issue that may cost the Democrats seats in the next election.
Because the governing party usually does really well in midterm elections when unemployment is at ten percent.
Posted by: Hogan | March 23, 2010 at 10:22 AM