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Am I crazy, or is the government sending out a strong message that corporations are more important than people? I know its a complex situation, but they keep supposedly trying to help people by corporate welfare, when surely there are better ways of protecting people from the damage of these financial collapses. It seems like if the government keeps propping up companies doomed to fail, it could just result in bigger failures, after a period of stagnation.

From AmericaBlog via magicwoman:
How many times do we have to hear:
We don't have ENOUGH MONEY to fix Social Security.
We don't have ENOUGH MONEY to fix Medicare.
We don't have ENOUGH MONEY to provide health care to ALL Americans.
We don't have ENOUGH MONEY to help out Americans losing their homes.
We don't have ENOUGH MONEY to help all our veterans returning from war.
We don't have ENOUGH MONEY to rescue "no child left behind".

BUT...

We DO HAVE ENOUGH MONEY to bail out Fannie Mae and Freddie Mac.
We DO HAVE ENOUGH MONEY to bail out Bears Stearns.
We DO HAVE ENOUGH MONEY to bail out AIG.
We DO HAVE ENOUGH MONEY to pay for an unnecessary TRILLION DOLLAR war.

How many times, indeed?

Comments

( 8 comments — Leave a comment )
quetz
Sep. 24th, 2008 02:50 am (UTC)
All of us are equal, but some of us are more equal than others.
--Animal Farm
merle_
Sep. 24th, 2008 03:18 am (UTC)
It seems like if the government keeps propping up companies doomed to fail, it could just result in bigger failures, after a period of stagnation.

Word.

All they have to do is prop things up through this election season, and then let the losers who won it deal with the fallout. And the rest of us, but we peons don't count. I'm starting to hate even numbered years...
flwyd
Sep. 24th, 2008 07:00 am (UTC)
Bailing out major financial institutions is more like bailing out utility companies than bailing out automakers. Letting Fannie Mae and Freddie Mac die would have all sorts of messy and hard-to-foresee consequences on American (and world) citizens with no direct connection to mortgage brokers and investment banks. I don't know if the actual policies being enacted are the right ones, but I'm willing to believe they're better than a lot of alternatives.

The giant price tag (700 billion etc.) isn't the same sort of expenditure as the war. Money spent on the Iraq war isn't really going to come back (unless you count oil contracts picked up by U.S.-owned firms), but the financial bailout involves purchasing financial instruments and shares in financial institutions. Once the market settles down, the government can sell those again and gain money back. And for mortgage-backed securities, as people pay for their homes, the money will go to the government.

I don't disagree that our government's budgetary priorities aren't misplaced and that social programs need attention. But as much as the poetic justice fan in me would like to see deregulated financial institutions collapse in a quivering heap of their own making, I think government action to keep the financial system from collapsing is probably a good move. And I agree with Obama's message that the guys who got us into this mess should not profit from the government stepping in. If anything, they ought to be taxed more for it.
grenacia
Sep. 24th, 2008 12:44 pm (UTC)
You're right, it is important for the government to interfere with these collapses. I just worry that the way they're doing it is like sticking a band-aid on a wound after its become infected and needs to be cleaned out. I feel the same way about a most plans politicians come up with to fix health care or Social Security. In the short term, they're better than doing nothing, but the long-term results could be worse.
freeimprov
Sep. 24th, 2008 01:01 pm (UTC)
I think some bailout is needed to stave off a potential currency collapse or other drastic effects on the economy (i.e. AIG, the largest insurer in the country), and to support those institutions explicitly backed by the govt (Freddie Mac, Fannie Mae). But as for the rest? What Paulson/Bush want is a $700B blank check with no oversight to distribute to their friends. Um, NO.

It is important to not underestimate the magnitude of the threat we face here. We are perilously close to the outright collapse of the dollar itself, and the creditworthiness of the US government - another Great Depression. But that doesn't mean we need to hand out free money.

One thing I've seen suggested that I strongly agree with is onerous weights placed on companies that accept bailout money... no golden parachutes for executives, no lobbying activity, no bonuses or excess dividends until the taxpayers are paid back, etc. Make it the choice between bailout and ruin.

That all said, your question is a VERY good one... why CAN'T we afford, say, national health care if we can afford to bail out Wall Street for their irresponsibility?
ua_dubhne
Sep. 24th, 2008 03:37 pm (UTC)
Here's an interesting fact:

Many senior McCain campaign staffers were also Freddie Mac lobbyists, up until quite recently. Who is surprised by this?

Here's a quote from the GOP's OWN PLATFORM, adopted just 3 weeks ago:

"We do not support government bailouts of private institutions. Government interference in the markets exacerbates problems in the marketplace and causes the free market to take longer to correct itself."

A little ketchup on your crow, Mr. Paulson?
phoenixredux
Sep. 24th, 2008 07:33 pm (UTC)
Crooks and flim-flam men, the whole lot. You get the feathers, and I'll boil the tar.
magicwoman
Sep. 24th, 2008 09:55 pm (UTC)
I believe that's exactly what's being said - we're not as important as the big corporations.
( 8 comments — Leave a comment )

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