Taxpayer Bailout: Ownership Society?

Thanks for the Bailout, America!

By Christian Probasco, 10-06-08

In my last blog I wrote, “It seems to me that the real lesson of 9/11, besides that terrible things can happen to innocent people, is not to depend too much on law enforcement agencies for your safety, or for rescue.”

That’s law enforcement agencies.  But as for the government itself—well, who knows?  The government bails out and bestows privileges on special interest groups, which includes everyone but working folks.  But somehow we got in!  We put some money down on a reasonably priced house in rural Utah at the height of the boom and our loan was approved by a major mortgage company which then cratered spectacularly.  Seemed like bad timing, especially with the interest rate we had to pay, but that we were approved at all may have been because of Bill Clinton’s and George Bush III’s push for more housing of the indigent.  The “push” that resulted in looser standards for lenders and ultimately, bizarre financial instruments that couldn’t possibly have worked, except in theory. 

So thanks for the recent bailout, America!  Even though our tax money is being sucked down the same great black hole as everybody else’s, we’re also reaping some of the benefits as well—for once! Our house has gone up in value about 30% since we got into the market.

Views from Utah
According to Utah blogger Mark E. Towner, you may have been better off drinking beer and recycling the aluminum cans than investing in the stock market.

Said law scholar and University of Utah Professor Emeritus Ed Firmage on October 5th:

“This abortion of a bill protects the platinum parachutes of the super-rich, bails out the banks, insurance companies, investment companies, the Chinese, who own most of the U.S. now; the Robber Barons of the Middle East big oil states who own that part of our money not already pledged to Russia for her oil.

This will at most cause a bit of a rally for a week or so; and then we will fall deeper faster to almost total ruin.”

Right on track so far.  New Wester historian Richard Warnick tries to explain here why the bailout isn’t the fault of 1) the Community Reinvestment Act 2) Fannie Mae and Freddie Mac and/or 3) immigrants.  Fannie and Freddie, according to Warnick, were just victims. I have to point out, though, that contrary to Warnick’s headline ("Repbulicans: Don’t Blame Us, We Just Run the Government"), the Republicans haven’t been running the government, at least since the last election. What did the Democrats do to head off the current crises?

National Views
Massachusetts Democratic Congressman Barney Frank apparently traced the origins of the current crises, “back to Ronald Reagan, when at his inauguration he said, ‘Government is not the answer to our problems; government is the problem.’” When, I’d like to know, has the current administration ever tried to put that philosophy into practice?  Was it with the No Child Left Behind Act?  Or maybe it was the Medicare Prescription Drug, Improvement and Modernization Act? 

From the statement which got Speaker of the House Nancy Pelosi into trouble in the first, failed vote on the bailout:

“Democrats insisted that legislation responding to this crisis must protect the American people and Main Street from the meltdown on Wall Street.
The American people did not decide to dangerously weaken our regulatory and oversight policies. They did not make unwise and risky financial deals. They did not jeopardize the economic security of the nation. And they must not pay the cost of this emergency recovery and stabilization bill.”

But then, who does she think will pay for it?

For an opposing viewpoint, the Washington Post’s Sebastian Mallaby, meanwhile, has a very insightful column which blames the current crises on tons of Chinese capital and the Fed’s “clean up later policy,” rather than the usual scapegoat of deregulation.  Sounds more plausible to me but I’m NOT AN ECONOMIST. I am also not paid millions upon millions of dollars to make wise decisions for financial firms.

Finally, here’s a great analysis of the bailout from James Ostrowski, writing for Lew Rockwell.  Stealing from the poor and giving to the rich--that’s the American way!

Like this story? Get more! Sign up for our free newsletters.