America’s Economy, Part 38.
By now I’m sure most of you have heard/read that Fannie Mae and Freddie Mac are being bought out by the federal government. You might ask, ‘What does that mean?’ - fortunately, this article has summed it up quite nicely with its first line:
WASHINGTON — Uncle Sam has just become the 800 pound gorilla in the U.S. mortgage market.
Yes, that’s right, the federal government has taken over yet another private enterprise simply because it was mismanaged and issued implicitly guaranteed loans that the taxpayers would have to protect, should the housing market tank. They believed that owning a house was some inalienable right for poor people, so they relaxed lending standards in a decent economic situation in America. Unsurprisingly, when the economy took a shit due to a combination of major deficit spending, reluctance from foreign investors, dumping money into the private sector by printing billions of dollars of increasingly worthless fiat money, and improving strength of the Euro, these propped-up organizations inevitably failed alongside a multitude of banks who irresponsibly over-leveraged their position on the subprime market.
On July 12th, I predicted that some large players would go down soon. This certainly qualifies, but I hardly think we’ve seen the last of it. See, for example, these retards making comments:
‘Effectively, the federal government has now become the nation’s mortgage lender,’ he said. ‘This takes a major financial threat off the table.’
(emphasis mine)
If by ‘takes a major threat off the table,’ you mean ‘puts it on the shoulders of the taxpayers who never wanted this,’ then yes, that is what happened.
People will talk in the upcoming elections about Obama and McCain. They will debate abortion rights, the need for ‘change’ in education/economy/drugs/whatever, the need to continue/end the war in Iraq, the need to increase/stabilize defense expenditures (no one wants to talk about decreasing the military budget), the need to expand/scale back social welfare programs, and other such tertiary issues that are ultimately meaningless, since none of it will get done. (The last major social reform was what, the Welfare Reform Act passed by the Republicans under a reluctant Bill Clinton?)
What does matter is this bullshit cronyism that is worse than widespread socialism. Liberals like to hold up the economy of today and say ‘This is what you get when the free market runs rampant! We need to keep corporate power in check!’ Two points:
1) No fucking shit, corporate power needs to be kept in check. However, it’s not because of the so-called ‘free market.’ It is because…
2) Government has expanded in size and scope under ALL presidents since World War II.
You hate deficit spending and think it’s irresponsible what the Republicans do? You can thank Democrat Lyndon B. Johnson, Civil Rights Mother-Fucking Hero to all black people. How about unbalanced and unchecked executive power? Democrat Franklin D. Mother-Fucking Polio-Afflicted Crippled-Ass Roosevelt, whom historians will tell you was our best president (or perhaps Abraham Lincoln, who nearly ruined this country).
What we have is not the free market. We have corporatism married to the government, which leads to widespread corruption. Laws cannot change this - they only increase the size and scope of what the federal government controls, which is ultimately influenced by rich lobbyists. The only way to stop the corruption is to limit what the federal government controls in our lives.
Read that, and remember it. And then ask yourself: ‘Why isn’t anyone talking about this as a solution?’
Well, that’s simple. It means less government jobs and less control for power-hungry politicians who are overwhelmingly a bunch of lawyers and rich, holier-than-thou arrogant fucks.
And no one is going to vote themselves (or their friends and family) out of a job.
yes we haven’t seen the worst of it (a particularly scary development is warren buffet announcing he is getting out of the business of selling banks fdic excess deposit account insurance), in all fairness, it should also be noted that deregulation of energy and commodities markets certainly contributed to our current situation along with the lemming like behavior of subprime lenders + fiat currency. While I fantasize about a truly free market as much as the next anarchist, half measures such as deregulation of energy markets (enron) and oil/food derivatives (keep your eye on the merc and CFTC investigations going on) have proven to be disasterous-half measures avail us nothing. There is no hope; we are the romans.