Saturday, August 18, 2007
From a great blog, Politicsplus.blogspot.com --Think though -- the DemocRATS knew this was coming. Some leadership, forget THEM doing anything about this!! - V
Socialism for the Rich; Free Enterprise for the Rest of Us
The Federal Reserve, saying for the first time that the recent disorder in the financial markets has raised the risk of an economic downturn, took the unusual step yesterday of encouraging the nation’s banks to borrow directly from the Fed, particularly to support home mortgage lending.
The early morning announcement of a drop in the so-called discount rate, made even before the stock market opened, sent Wall Street soaring as relieved investors celebrated the Fed’s tacit acknowledgment that it had made a mistake last week in playing down concerns over the spreading distress in the credit markets. After falling for six straight days, the Dow Jones industrial average shot up 233.30 points, to 13,079.08, a 1.8 percent increase.
The Fed, while not yet cutting a rate that wields more influence over the economy, moved to stimulate lending in part because it recognized that even well-to-do families with good credit ratings were having difficulty getting mortgages. That problem, radiating through the housing market and then the broader economy, had “the potential to restrain economic growth,” the Fed said.
The sudden action also suggested that the nation’s central bankers were worried that a major financial institution might be at risk of failure if the Fed did not move before its policy makers gather for their next regular meeting, on Sept. 18.
Analysts predicted that the Fed was likely to go further, cutting market interest rates soon, perhaps even before its meeting next month if its action yesterday does not help to shore up confidence on Wall Street and elsewhere in the economy.
The mechanism for lifting the mortgage market was a cut of half a percentage point, to 5.75 percent, on borrowing from the discount window, a normally rare practice in which the Fed lends directly to banks facing some sort of trouble... [emphasis added]
Inserted from <NY Times>
When we strip away the high sounding terms like potential to restrain economic growth, we are left with a bailout of super-rich corporations. Lending by the fed increases the debt that taxpayers have to pay back, so this is a perfect example of socialism for the rich.
...These are tough times for the wealthy.
What has happened during the Bush years, with the Bush ethic of “grab all you can” greed, is the stench of a new Gilded Age that is morally disgraceful, economically unsustainable and politically deadly for Republicans if the Democrats speak clearly against this.
Hillary would probably argue that the wealthy, like special-interest lobbyists, are just plan old Americans who never influence government with their money. Some in Congress will have to interrupt their fundraisers and offend their campaign contributors. For most Democrats, this is the issue of a lifetime, the stuff of which landslides are made of.
Is it right that American troops are told we can’t afford to give them body armor and protected vehicles, so they die preventable deaths, while the highest-income 1 percent receive huge tax cuts?
Is it right that the new racket on Wall Street is that banks make bad loans, sell them to hedge funds and private equity firms, many of whom are virtually unregulated and untaxed, who then complain about their pain after they foreclose on average Americans for falling a little behind their payments?
It is good that today the Fed cut the prime by 50 points, but it is bad, and terribly wrong and unjust, that in the last week the Fed has essentially used Americans’ money to bail out the wealthy who made the profits, while doing zero for the foreclosed and homeless.
When the banks, hedge funds and private equity firms make bad deals, they keep the personal profits, while the corporate profits are protected by bailouts. Meanwhile, when the average Americans in the middle class, or the poor, fall a little behind, they get the boot, they lose their jobs, they are thrown into the street without homes and often without food... [emphasis added]
Pasted from <The Hill>
Yes, we can see the socialism for the rich on Wall Street in the rejoicing of investors that the Crawford Corporate Crook has once again come to their rescue at our expense. Free enterprise for the rest of us is also easy to see. Just walk downtown in your city and see the homeless families free in their suffering while Bush rants on about cutting social programs.
This is a premier example of why the two-party system doesn't work and never will be able to do so.
The signs were clearly on the wall that this clearly illegal financial bailout would take place (ever hear of PRICE FIXING? Surely, RICO laws apply, everyone's been gang banged). Yet CONgress cheerfully sat around doing nothing, allowing the Federal Re$erve to bide its time doing nothing allowing the "bubbles" to have their fateful effects. A bit convenient ..?
The DemocRATS may be able to kid themselves, but they don't fool EVERYONE else. They are incapable of any leadership; they've allowed themselves to go MORALLY bankrupt under the "rules of engagement" as they supported the worst war EVER in Iraq and Afghanistan.
The die is already cast.
I can't wait to hear all the lobbyi$t bloated politician$ wax on and on about the needed financial sacrifice$ that need to be made to $ave America ..
Get ready for a new round of taxobabble ....
Meanwhile watch the markets carefully to see how the armaments industry, the metals, the mining stock$, go up, and UP and UP!!!
Damned diabolic is all I can actually say. EVIL.
This entire fiasco was predictable. Any fool could see that the "alternative" mortgage industry could only continue to work as house prices continued to rise. The mortgage system has been turned into a Ponzi scheme. I would expect that the next step is wild gyrations in currency prices as people realize that the "full faith and credit" of the US government is worth as much as a Bush promise.