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How the Democrats Created the Financial Crisis
With a $700 billion dollar bailout being considered by Congress, it’s important to not only discuss the solution (if there should even be one), but also examine how we got into this mess so we don’t repeat the mistake.
I’ve already posted evidence demonstrating how Democrats’ misguided priorities have fouled our banking system so thoroughly, and I’ve also contrasted Obama’s complicity in the market collapse with McCain’s and Bush’s attempts to reform it.
Now, Bloomberg News has posted a must-read editorial that makes the case way better than I could.
The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn’t make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.
The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.
There’s a lot more and it’s worth the click.
This bailout is a terrible idea. Total clown shoes. As a society, we need to stop rewarding failure and penalizing success. I think it’s time for Atlas to shrug.
The novel’s title is an allusion to the Greek Titan Atlas who was described as literally holding the celestial globe on his shoulders (as per Atlas), discussing what might happen if those holding up civilization suddenly decided to stop doing so.
[...]
In the world of Atlas Shrugged, society stagnates when independent productive achievers began to be socially demonized and even punished for their accomplishments, even though society had been far more healthy and prosperous by allowing, encouraging and rewarding self-reliance and individual achievement.
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UPDATE: Emperor Misha has a great analogy for the bailout…
When was the last time that YOU got a share when those corporations that you’re now about to be forced to bail out were turning a profit? Huh?
Then tell me, please, how it is in any way, and let’s forget the ridiculously overused word “fair” for a moment, LOGICAL that you should be forced to take your share of their LOSS? Tell me, please. Then, if you think you can do that, kindly go buy me, say, $2,000 worth of lottery tickets and hand them over to me. If all of the tickets are duds, then you just wasted 2 grand. If I win, then I get to keep all the winnings and you can kindly go fuck yourself. Makes perfect “sense”, doesn’t it?
The bailout that BOTH sides of the aisle are negotiating right now amounts to the exact same thing. There is absolutely NO difference.
Posted by FullMetalPatriot
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
12th gen. American, Constitutionalist, Harley-riding Texan, gun owner & NRA member, blogger, illustrator, Florida Gator alumnus. #TCOT
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