Nationalization

I'm sure by now anyone with eyes and ears has heard about this in one way or another by now. So I doubt I'm going to be informing anyone here of big news or blindside someone living in a cave. Unless of course you actually do live in a cave. In which case getting your news from me is a bad idea, really. Humor aside, I think we're heading down a road that this country is ill prepared for and will not survive in the end.

Freddie Mac and Fannie Mae are just the two latest casualties in an ongoing crisis in the US housing market. These are the two largest mortgage firms in the country and they provide guarantees to a staggering number of home loans. As I'm sure everyone is aware by now, that market bubble burst last year and has been rapidly deflating ever since. Fueled mostly by high risk loans, sub-prime mortgages, and a whole host of other terribly unsound economic policies. So it's no surprise that the companies are now reaping what they sow, right?

It wouldn't be had they been allowed to collapse as the market dictated anyway. No, instead of that, the boneheads running this country have decided instead that these two companies were in need of an "emergency" federal bailout to the tune of billions and billions of dollars. So we are now embarking fully on the path to nationalization and I for one find this very disturbing on a number of levels. Not the least of which is a general sense of responsibility for your company's actions. The US taxpayers are now being tasked with paying for the fallout of other stupid and reckless US taxpayers. The twisted logic behind this is nothing short of sinister. One might even say eerily reminiscent of similar events in the not so distant past where another government began nationalizing things, claiming it to be for the good of the nation.

This isn't the first time it happened though. Freddie and Fannie are just the two latest supposed beneficiaries of it. Not long after 9/11 the airlines came to Congress with their hands out, begging to be bailed out of the imminent collapse of their entire industry. Claims were made that they'd have to fire thousands of people and sell off billions in assets just to stay afloat. So they asked for billions in federal bailouts and exploited the tragedy for their own ends. Congress bought it hook line and sinker and forked over the money. Turns out it was all a scam, the airlines fired those people anyway and several of them then ran to seek bankruptcy protection anyway. The corporations had lied to us. But it set a much more dangerous precedent. It created a situation where the federal government could now be on the hook for billions on the backs of taxpayers. Had the industry been allowed to collapse, it would have sent the clear message that companies need to work out their problems in the open market and if they don't survive, they weren't meant to. But it wasn't.

Just last year the government stepped up once again. Claiming once more that they were trying to help save the economy and bail out millions of people in the worst foreclosure cycle we've seen in many years. Tons of small companies were "rescued" by the federal government. The real problem lay not with some nebulous market or a phantom problem in the economy at the time, but squarely on the backs of those fueling the sub-prime mortgage market. Many loans had been given out without even so much as income verification. So anyone seeking to buy a house could get a loan just by stating they made X amount of money per month. I'm sure anyone with any sense can see why this cannot, and did not, work. Housing costs rose as supply dried up. The market was in an ever rising spiral of higher and higher home prices. Then the inevitable happened and the market collapsed. When it came time to call in markers, the companies had no money to pay with. Why? Because the people they loaned the money to had no way to pay either and thousands upon thousands of loans were in default, headed for disaster. So once more they came with their hands out to Congress, and once more, they bought it hook line and sinker. Once more the US taxpayer is tasked with shouldering the debt of paying for a whole bunch of truly stupid people and companies. A complete lack of responsibility on all parts. Had this been allowed to collapse, things might have worked themselves out already. But they weren't.

Now with billions in unresolved debt simply swept away and properties nationwide going up for foreclosure auction, banks began losing money. The big investment firms which drive them could no longer sustain their phantom inflated stock prices. The mortgage crisis was about to go critical, so to speak. It was only a matter of time before several banks sustained runs similar to those back in 1929. Some have since failed. Others got propped up and are now under federal control. The government tried to convince people that the situation was being resolved. Wall Street didn't buy it. Then it happened. One of the larger investment banking firms, Behr Stearns, had to tell people they were broke. Essentially unheard of in our time for a firm of this size to declare themselves toast. Stock traders massacred them the next morning and by the time it was over that afternoon, Behr Stearns was a smoking cinder. JP Morgan came along claiming they had the answer and bought them out. Or so we were told. It was later confirmed that JP Morgan did so not with their own money, but as a joint takeover backed by, you guessed it, Uncle Sam. The federal government had ponied up $24 billion of the $25 billion we were told it took to complete the deal. Essentially nationalizing Behr Stearns. Had it instead been allowed to collapse, perhaps we could still have saved the situation. But it wasn't.

And so we move on to this week. Freddie and Fannie are now properties wholly owned by the federal government. Not by private citizens. Not even by the Federal Reserve. But by you, me, your neighbors, my neighbors. Property of the US government. This was supposed to stabilize the situation and bring order to the game. It did not. Just this week, word began circulating that Lehman Brothers was in deep shit financially. They're another uber-huge investment banking firm. Supposedly this was not actually true, but Wall Street didn't wait to find out. By the time they were done, Lehman Brothers was in fact toast. So we're going to allow it to collapse and disappear, right? Uh, wrong. There's now talk of once more having the government step in, buy up the pieces, and "rescue" the company from oblivion. We've already seen this won't work. Continuing to do so only makes things that much worse.

The precedent has been set. The pendulum is in motion. Piece by piece, private investment firms are being swallowed up by the government. Caused in part by cannibalism in the market itself. The situation is about to go nuclear, and unless we act swiftly and decisively, it won't be long before the bomb is dropped and the US economy itself becomes the smoking cinder. Nationalizing it can only lead one direction: Communism. Continued unchecked we're about to turn ourselves into Soviet Russia. Is this really what people want?
.........................
"It is pointless to resist, my son." -- Darth Vader
"Resistance is futile." -- The Borg
"Mother's coming for me in the dragon ships. I don't like these itchy clothes, but I have to wear them or it frightens the fish." -- Thurindil

Well. I guess that's that then.

       
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Posted on Sep 14, 2008 12:14 am by Samson in: , | 27 comment(s) [Closed]
Comments
Not to really go into this at length, because the last thing I care about doing or have the time for is an economics argument, but:

- This is not exactly unheard of in US history, going at least as far back as the early part of the last century, where JP Morgan himself had a pretty big hand in I think twice either bailing out the government or helping the government to bail out whomever to prevent a market collapse.

- It ought to be obvious to everyone at this point that, just punishment due or not, allowing vast segments of the financial industry to collapse outright are bad on plenty of levels. 1929 and earlier, don't you know.

- Never mind the unique status of Fannie and Freddie that allowed this.

- This word, Communism. It does not mean what you think it means, here.

That aside, the delicious irony in blaming a Bush presidency for turning us all into Communists.

       
The fact that this isn't unheard of in US history is exactly what's disturbing about it. That it's happening more often is even more of a problem now than ever before.

Economic depression or not, I fear that nationalizing Freddie and Fannie now only delays the inevitable and when things finally do fall apart, and they will, it will be even worse than if the feds had simply stayed out of it. If you think 1929 was bad then you'll probably want to consider moving to Canada assuming our pending implosion doesn't take them down with us and the rest of the world.

I think Communism is entirely fitting to describe where this is headed. Government owned assets? Yeah, sounds about right to me. The way ownership comes about hardly seems relevant.

And let me make one thing perfectly clear. I am not blaming a "Bush presidency" for this. I'm blaming everyone. All parties are equally responsible since this required action from Congress before Bush had the chance to act on it. If anything Bush's economic policies delayed it from happening sooner due to reduced taxation which allowed more money to keep flowing through the system. Had we been under a Gore policy instead we'd probably already all be at the bread lines and working on hundreds of bridges to nowhere to survive.

       
Not to side with Dwip on this, because I'm not at all in agreement with his stance (I'm actually in favor of letting the chips fall where they may due to corporate mismanagement and government noninterference...), but two (three?) quick points from my own perspective/agenda:

Samson said:

Nationalizing it can only lead one direction: Communism. Continued unchecked we're about to turn ourselves into Soviet Russia. Is this really what people want?

Dwip said:

- This word, Communism. It does not mean what you think it means, here.

Samson said:

I think Communism is entirely fitting to describe where this is headed. Government owned assets? Yeah, sounds about right to me.

First, just as we like to call ourselves a democracy despite actually being in practice a republic, we like to refer to Russia as communists despite their actually practicing socialism, which is what you're describing rather than communism. :shrug:
As for whether we want this or not, if the government cared what any of us actually wanted, we wouldn't have an electoral collage in place anymore.

Samson said:

And let me make one thing perfectly clear. I am not blaming a "Bush presidency" for this. I'm blaming everyone. All parties are equally responsible since this required action from Congress before Bush had the chance to act on it.

Speak for yourself, man, I'm a member of "everybody" and I personally, and unequivocally categorically, refuse to accept blame for this. I have had no loans in the housing market or elsewhere. I own no financial institutions of any type, nor do I work for any of them. I am not a member of the government. I had no vote on these decisions. No sir, the fault for this nonsense lies quite squarely elsewhere, thank-you-very-much! :P

       
Technicalities aside, I think everyone understood what I meant by Communism. So lets not argue nits ok? Just like if someone says "but this is a democracy!" most people aren't going to pick on them because we actually have a republic unless they lack a counterpoint. Which I'd hate to think Dwip did, but hey. So yeah. Soviet Russia. Bad. Not in the USA thank you!

I also think you knew exactly what I meant by "everyone" since I specified parties, Congress, and Bush. So yeah. Try not to pull a David please and avoid getting bogged down in silly details. Although it could be argued that yes, even we as voters bare some responsibility for continuing to re-elect jackasses who follow these kinds of policies. I seem to recall that we're about to have a chance to do something about this again in 2 months.....

It seems pretty clear that this is not what a free market is about. If the shareholders are going to get screwed over, then screw them. They knew better than to give their tacit approval to the company's actions by continuing to prop up their stock. Allowing fiscally irresponsible policy to continue on like this is only going to be bad for everyone, and I mean EVERYONE this time.

       
I will believe the communism bit when we start getting communes and show trials of kulaks. Until then...not so much. FWIW, our economic system is already mildly socialist, and pretty well always has been. And I for one am fairly ok with that.

Here's the thing. If we accept that this housing thing is a big deal, affecting as it does millions of people, and if we accept that having large financial institutions collapse on a large scale, which they are, is something that is catastrophic for those same millions of people (be they shareholders, CEOs, or simply the people who have mortgages or money in the bank or whatever), which I think is a fair enough assessment given what I understand of this, then it stands to figure that government/private bailout will at the least help to solve the problem and prevent the collapse, or at least lessen it. And like I said, there's some precedent for that, although the ones I'm familiar with are about a century old at this point. And nevermind that Freddie and Fannie were quasi-governmental corporations that apparently the government had the right to repossess in any case. Doing it the way we're apparently doing it sucks a whole lot, don't get me wrong, but it appears to be better than the alternative.

So that's that part of it.

The second part of this is that there are people to blame here. Your average shareholder, maybe not so much - they don't have a say particularly. Your average mortgage holder, maybe not so much - it's not really their fault this thing went south. The CEOs? The big folks in these companies? They made some bad decisions and deserve to fry for them. I'm not convinced they will, and that bothers me, but it's also not a reason to let the whole thing crumble down around collective millions of ears.

Thirdly, it bothers me that they got to do this in the first place. Don't we have some level of rules and regulations to deal with this? Apparently not. Ought to fix that. Doesn't need to be heavy regulation, not thinking, surely the government doesn't need to be in this business and we'll probably get out of it soon enough as we have in the past, but we need something.

...yeah, I'm for minimal regulation. Sue me. Unrestrained free market doesn't bother me so much for small businesses, though it does a little, but if we've learned anything about big corporations in the last decade or so, and I'm thinking about Enron and those as well as this new bit, it's that they have a remarkable talent for doing dumbassed shit that fucks everybody, and the only people who come out well are the top guys, and everybody else burns. Little backwards to me. But.

I'll be abandoning the spur of the moment Bush comment. Ill-concieved, though I do like the humor of the idea.

       
So while over at the ATM today I heard a bit of encouraging news. The feds apparently will not be bailing out Lehman Brothers after all. Word has it, though not confirmed yet, that they will be allowed to die a proper death at the hands of shareholders and the stock market in general. A fitting end as far as I'm concerned. The same end Behr Stearns should have met, the same end that Freddie and Fanny should have met, and the same end that the airlines after 9/11 should have met.

You may be interested to note though that I also favor minimal regulation. An unrestricted capitalistic system leads to monopoly power which history has proven is a very Bad Thing(tm). I don't however believe that such regulation should include full scale nationalization by our government when the free market begins to correct for its own bad behavior. Some guidance, yes. Oversight? You bet. Anti-trust action to fend off monopoly power? Yes. Direct interference in an otherwise competitive market? Hell no. Not unless national security is at stake. And I fail to see how greedy fat cat mortgage bankers can threaten that.

Ronald Reagan said it best:
In this present crisis, government is not the solution to our problem; government is the problem.

       
http://www.foxbusiness.com/story/markets/futures-plummet-lehman-bankruptcy-merrill-purchase/ <--- Oh yeah, it got a whole lot worse than just Lehman over the weekend. But it's all proof that nationalizing Freddie and Fannie isn't going to stop what's coming.

       
Nationalizing industry is a step to facism, albeit under (Soviet style if you want to nit pick) communism industry is also ran by the state. State run industries perform really, well-look at Amtrak, er uh, never mind....

       
Sorry Samson, I really wasn't trying to either nit pick nor "pull a David", in fact, I was really just pointing out the only aspects of what you'd said that I disagreed with. I think it's very good news that Lehman Brothers is not getting bailed out and I couldn't agree more with the Reagan quote you cited. Our government needs to learn to back off on everything that really isn't part of governing via Republic. This is rather akin to the whole congressional intervention we had a little while back in professional sports, how exactly does a baseball player taking steriods impact anything within the jurisdiction of our congress? :sigh:

Sorry if it came off as nit picking or blowing things out of proportion, I guess ultimately I just didn't want to fail to comment in some fashion and had nothing major to actually argue on this one.

At least with Merrill Lynch, it's Bank of America buying them out rather than Congress this time...

       
1) Guess who the all-time number 2 recipient of campaign contributions from Freddie Mac and Fannie Mae is?

Barack Hussein Obama

2) Guess who cosponsored the FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005?

John McCain... quote from section 16: "For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

3) Guess who helped make sure it didn't pass?

See 1)


       
BTW, Bush proposed reforming these two GSEs in 2003. He couldn't get anything out of the House.

‘’These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘’The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’’

       
Y'all catch the latest one? AIG just got bailed out. This time I've got mixed emotions on the matter. On the one hand, as I said earlier, I think free enterprise should be allowed to fail or suceed without the government's interferance. On the other hand, AIG currently holds my personal life insurance policy so I have a reason to be grateful they weren't allowed to die before me... :wink: ...seriously, I have to say that, despite my personal vested interest in this one (or maybe because of it?), I am having trouble believing that they had already tried every other available recourse before turning to congress since I hadn't even been contacted about a potential rate increase or anything.

       
That's because they didn't pursue anything. Why should they? The precedent has been set before them. If you're an irresponsible lender or insurer and you go broke because of that, don't worry. Uncle Sam will come bail you out. If it were any other company trying to do this everyone would be asking how it's going to get paid for. But somehow because it's the feds, nobody questions it. Even though we *ALL* have to pay for it now.

       
Oddly enough, there seem to be very widely mixed reports on how that will come to pass currently floating around the web. MSNBC seems to indicate that Mrs. Palin believes this will cost the taxpayers, and so does CBS while USA Today and others seem to indicate that McCain (and consequently his camp) are tenuously in favor of the whole thing, even if mainly to avoid being called to task by Obama for not supporting it.. meanwhile, Digg and ABC seem to feel that Congress has just given us all another new tax burden.. On the other hand, I read earlier this evening, on CNN and some of the other sites, that the plan is to cover the loan through treasury bond sales rather than taxation and then to actually profit significantly off the interest rate of the loan itself while being guaranteed a majority shareholder-ship for the government. Overall, again I meet this with very mixed emotions. I know our government (as well as the rest of us) could seriously stand to make a profit off of something right about now. I'm not so sure I want Uncle Sam to be my life insurance provider though, I actually want my family taken care of when I go... not that I'm not patriotic by any means, but I've seen how he's handled Social Security already... Also, I have to take into consideration the fact that these current candidates for the Oval Office, who are also sitting congressmen (and Governor) and thus probably have access to more information than I do, appear to be wavering heavily about this makes me wonder how much I should be too.

As for the "nobody questions it" remark, do a quick google search on the aig bailout and you'll find quite a healthy number of folks pretty 'loudly' questioning it, especially among the media and 'blogosphere'. (Doesn't that term include this site too, incidentally?) Though, as far as the issue of folks questioning how it's going to get paid for, how many questioned Bank of America's ability to pay for Merrill Lynch? The closest I saw to that was some questions of whether Bank of America would have to become open source like Merrill Lynch had been... :shrug:

       
I guess I'm going to have to stop using common phrases like "nobody questions it" when raising issues cause this is the second time something like that has been thrown back at me as though I literally meant nobody at all. Have we come so far that the meaning is lost in the parsing of the words? Forest for the trees?

Maybe the LA market is a bad place to make these kinds of judgments. I haven't heard one of the networks out here yet question whether we should bail out AIG, Lehman, Freddie, Fannie, or Behr Stearns. They only question how much will be needed. They treat it as a given that the feds should be stepping in. Just like they treated it as a given that we'd be bailing out the airlines after 9/11 which IMO is what got this whole ball rolling.

They're also spending an assload of time blaming McCain personally for all that's happened ( oddly, not Bush, election, etc ) and only Fox News has had the integrity so far to mention the GSE bill McCain co-sponsored 3 years ago that would have prevented this shit from happening. And further they went on to name Obama and Barney Frank as the chief architects of blocking it from getting a floor vote in the Senate. You won't hear that from the local media outlets here.You might get it from the LA Times if they're feeling squirrly. But that's not something to wager money on either.

Palin herself said it would cost the taxpayers. She's not happy about that either. But even she said bailing out Freddie, Fannie, and AIG was probably a wiser decision than letting them collapse due to the nature of what they do. So even she agrees more or less with Dwip's line of reasoning on this. I'm afraid I don't, but you can't agree with everything your candidates do. Uncle Sam sure as hell isn't qualified to run those companies, and as you say Conner, their track record with Social Security is proof of that.

I think it's also good that all the candidates are wavering on it, but I guarantee you Obama and Biden aren't wavering much. They're more likely quibbling over whether the rich should pay for it all or if the burden should be everyone's. McCain and Palin are both unsure of whether the federal bailouts were a good idea at all. Rightly so, we're socializing a free market system and that better damn well make you stop and think about what you're about to get elected to be in charge of.

       
Sorry about the common phrase thing, I have a bad habit of taking what's said to me (verbally too, but especially when it's just in print without the emotional/social clues) several ways and choosing the one I think feels most suitable, and all too often it's the literal meaning.. if only for the personal humor and sense of irony I can enjoy from them. I freely and fully acknowledge this to be a bad habit but also won't hesitate to point out that I'll not likely stop doing it as it's the cheapest entertainment I know of. ;)

Actually, I think I saw something about that bill mentioned somewhere else too just today or yesterday, I'm thinking it was CNet, but it might've been Snopes...

This is one of those issues I'm really just not sure which way to lean on. I really don't like the idea of the government (especially the federal government) getting involved at all but especially like this. On the other hand, I've been watching the market decline (slowly at points with upward drifts here and there, to be sure, but drastically lately) since late 2000 and, having been raised by a Stockbroker and an Accountant/Government Auditor, I can understand the urgency of acting to avoid a financial collapse. One of my own biggest concerns is that the government has badly mishandled this 'crisis'; not only by choosing the wrong methods, but also by acting far too late to prevent this becoming a full blow depression.

As for the candidates wavering... Like you said, it probably is good that they're all concerned about what they're trying to take the reins on. On the other hand, as I said, I'm pretty concerned about their uncertainty since they're all in a position to know enough that they should have solid positions on this where I'm not in a position to have full access to the facts they do which makes me worry what those facts I don't have indicate that would make them all worried about which way they should be going with this.

While I'm strongly favoring the McCain/Palin ticket over Obama/Biden at this point (I still think we're, yet once again, going to be barely better than voting for the lesser evil election), I'm not really certain where Obama and Biden might stand on this one. From a brief google search on the matter, it seems the media is all over what McCain and Palin are supporting or not about it, but almost none of the sites I saw seemed to actually question what Obama's stance might be and I saw no listings at all about Biden's. I suppose you'd call that further proof of the liberal media, personally I can think of other even more disturbing words to label it though.

       
Yes. I would call it further proof of the liberal media. They already know what the Obama/Biden position is, assume everyone else does to, and don't bother to report it. The masses who don't pay as much attention to politics as we do will be left wondering WTF. We know already that they support federal bailouts and are only debating over how much of your money to use to do it with. I'd be interested to know what words you'd choose to describe it though. Unless it's something that might bring our NSA friends down on us. [Hi guys! What's up?]

Frankly I'm not convinced McCain, Palin, Obama, Biden, Bush, or any of a large number of politicians know anything more about the inner workings of our economy that we do. They may have more information at their disposal but I doubt any of them fully understand it all. That's why they all have advisers. But I'm going to guess here that their advisers are also torn on whether this is all such a good idea or not because they know what kind of a dangerous precedent is being set. They all read as a bunch of desperate people throwing objects in the path of an oncoming assailant and being unable to get out of the way fast enough.

       
http://www.foxbusiness.com/furl/story/markets/industries/finance/report-wamu-sale/

Yikes. If you've got money in WAMU, I'm not so sure it's wise to leave it there now. But at least they're doing right by putting themselves up for sale instead of running off to get in line for a handout.

       
Well it started in 1970 under Nixon. Nixon bailed out the Penn Central Railroad which was run into the ground by bad management. Like mojo mentioned, that's how the government got into the railroad business with Amtrak and Conrail. There have been many bailouts since from Lockheed Martin to Chrysler to Continental Bank etc. The only "successful" bailout that I'm aware of was Chrysler who actually paid off the loans they were advanced.

       
1. I, too, wonder what the Obama/Biden plan is, although I'm fairly sure there's something on their site. At 2am with a headache I'm not going to check, though.

2. I have a suspicion, given history, that the government will ultimately find some non-tax way to deal with things and then re-spin off the bits that need privatizing. Fair bit of precedent for the both, and I'll hazard the guess that pretty much nobody wants the government to for serious take over vast chunks of the financial market. We shall see. Won't expect to see movement on that for a good time anyway.

3. Then again, this administration and this Congress (and especially this Congress, both Republican and Democrat) have spent the last decade or so trying very very hard to not impress me with their (utter lack of) fiscal responsibility. Hopefully this, combined with the election, serves a catalyst to get some badly needed regulation and oversight done, so we can stop having major industries implode every couple years.

I'm not going to hold my breath, though.

4. What's also decidedly weird about the thing is that I hear more on the subject from the campaigns than from the actual government. Not to throw any blame on the President, who's actually been doing a lot of things right lately, but it's strange not to have heard a peep from him, I think.

       
Samson said:

I'd be interested to know what words you'd choose to describe it though. Unless it's something that might bring our NSA friends down on us. [Hi guys! What's up?]

Um, yeah, it prolly would get their attention, but I love a good conspiracy theory whne I can find one. *L*

Samson said:

They may have more information at their disposal but I doubt any of them fully understand it all. That's why they all have advisers. But I'm going to guess here that their advisers are also torn on whether this is all such a good idea or not because they know what kind of a dangerous precedent is being set.

Fair enough, though they're supposed to have their advisors explain it to them so that they do understand it, or at least that's what we're all expected to believe, no? I expect that you're quite correct about those advisors too, and that's the part I find frightening. :sigh:

Samson said:

Yikes. If you've got money in WAMU, I'm not so sure it's wise to leave it there now. But at least they're doing right by putting themselves up for sale instead of running off to get in line for a handout.

Thankfully, I don't, but I'd definitely agree with your take on the matter. I'm also definitely watching those headlines in case I need to make a 'run on the bank' for the banks I do have my funds with.

Tyche said:

Well it started in 1970 under Nixon. Nixon bailed out the Penn Central Railroad which was run into the ground by bad management. Like mojo mentioned, that's how the government got into the railroad business with Amtrak and Conrail. There have been many bailouts since from Lockheed Martin to Chrysler to Continental Bank etc. The only "successful" bailout that I'm aware of was Chrysler who actually paid off the loans they were advanced.

Was that the first time it'd happened? I have to wonder given what little I know of Hugh Hefner's airline history.. either way, I know that, of the ones you cited, Lockheed Martin ended up surviving because of it and Continental Bank ended up becoming another bank which got taken over and eventually became Nations Bank which became Bank of America - amazingly enough, my bank accounts from Continental at the time managed to remain intact and mostly unharmed through all of that.

Dwip said:

1. I, too, wonder what the Obama/Biden plan is, although I'm fairly sure there's something on their site. At 2am with a headache I'm not going to check, though.

No idea whether or not you're right about that, I don't think I've ever bothered visiting their site and I'm not about to start at this moment. But I can understand about the headache. I'm amazed you and Tyche were up to post at this hour as it was...

Dwip said:

2. I have a suspicion, given history, that the government will ultimately find some non-tax way to deal with things and then re-spin off the bits that need privatizing. Fair bit of precedent for the both, and I'll hazard the guess that pretty much nobody wants the government to for serious take over vast chunks of the financial market. We shall see. Won't expect to see movement on that for a good time anyway.

While there is precedent for those, unfortunately, as Tyche and Mojo pointed out, there is also precedent for that to not be the case...

Dwip said:

3. Then again, this administration and this Congress (and especially this Congress, both Republican and Democrat) have spent the last decade or so trying very very hard to not impress me with their (utter lack of) fiscal responsibility.

While I'm sure that you're right and this has been entirely personal towards you on their part... the last president I was pleasantly impressed by was Reagan.

Dwip said:

I'm not going to hold my breath, though.

Probably a good idea, I doubt blue is really your color anyway...

Dwip said:

4. What's also decidedly weird about the thing is that I hear more on the subject from the campaigns than from the actual government. Not to throw any blame on the President, who's actually been doing a lot of things right lately, but it's strange not to have heard a peep from him, I think.

Unfortunately, he's been busy having to defend his decision to go to war with the middle east over the 9/11 thing and has recently declared the attacks on our embassy proof that we're still at war. But otherwise I'd have to agree that it'd be a bit more reassuring if the folks who made these decisions would report to their constituents rather than just having the media divert attention from them by making it yet another campaign issue.

       
er, Howard Hughes, not Hugh Hefner.. see what I get for posting all this at nearly 3am after joking about other headlines from today on my mud? *sigh*

       
http://www.foxnews.com/story/0,2933,428641,00.html

Christ. It just never ends does it? Bad enough Washington Mutual has been seized by the FDIC and summarily sold to JP Morgan, but why the hell should the guy's golden parachute still be given to him? Can anyone smell fraud and deception with the bailout plans? Is anyone still not seeing why this is such a supremely bad idea?

       
Yet folks seem surprised that Obama's got his panties in a wad over the fact that, at their meeting with Bush, McCain didn't wholeheartedly endorse the plan...

       
I felt a great disturbance in the Economy, as if millions of voices suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened.

Or, put more bluntly, welcome to the USSA. Please put your tax dollars in our pockets and back away slowly. This bailout is for your own protection. No, really! We swear!

       
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