Going gets tough, so Bush tries socialism

Going gets tough, so Bush tries socialism

business.smh.com.au

He wanted to be known as the man who fostered free market democracy through the Middle East. Instead, George Bush, arguably the most incompetent US president ever, is destined to be remembered as the man who revived socialism for the 21st century

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[edit on 17/9/2008 by Mirthful Me]

Here is an article that makes the point about the reversion to socialism when it suits your pals in big business.
It all highlights the hypocrisy and greed that corporate America is all about.

business.smh.com.au
(visit the link for the full news article)

Mod Edit: Breaking News Forum Submission Guidelines – Please Review This Link.


[edit on 17/9/2008 by Mirthful Me]

Taking out AIG is not socialism, they are being loaned 85 Billion...with 11% interest...11...percent (which everyone seems to have failed to have mentioned, including this article), they probably took on equity to avoid risk of not getting enough collateral for the loan... Fannie and Freddie, yes, that was socialistic...AIG not really, sorry to burst everyone's bubble.

[edit on 18-9-2008 by yellowcard]

reply to post by yellowcard


It's socialism when it is the Public's money, even if you say it's a loan. That also means the "public", is also the CREDITOR and has claims to all assets, ergo the U.S. government owns AIG.

If that's not a definition of socialism, then I don't know what is.



[edit on 18-9-2008 by Gateway]

Originally posted by Gateway
It's socialism when it is the Public's money, even if you say it's a loan. That also means the "public", is also the CREDITOR and has claims to all assets, ergo the U.S. government owns AIG.

If that's not a definition of socialism, then I don't know what is.

You can call it whatever you like, but it is the Fed giving a loan, which will get paid back and then some, so that AIG doesn't collapse, and screw all those stockholders and the entire world market.

Furthermore, our government doesn't own AIG, which I don't understand why people have such a hard time understanding this. The warrant that the Fed got is just insurance so that our full 85 billion doesn't disappear into somebodies pockets.

If the government acts on the warrants, it essentially gets back as much money that it loaned out as it can, while protecting the stockholders from getting raped by people who would have otherwise made a ton of money off them.

I just have a couple things to add..

www.roguegovernment.com...

The Bush administration has released a directive called the National Security and Homeland Security Presidential Directive. The directive released on May 9th, 2007 has gone almost unnoticed by the mainstream and alternative media. This is understandable considering the huge Ron Paul and immigration news but this story is equally as huge. In this directive, Bush declares that in the event of a “Catastrophic Emergency” the President will be entrusted with leading the activities to ensure constitutional government. The language in this directive would in effect make the President a dictator in the case of such an emergency

-ChriS

reply to post by grimreaper797


Really, the Government doesn't own AIG..........Government takes control of AIG

Interesting that a thread I posted in this very forum got locked because there were sooo many new threads regarding AIG. See here thread

Originally posted by grimreaper797

You can call it whatever you like, but it is the Fed giving a loan, which will get paid back and then some, so that AIG doesn't collapse, and screw all those stockholders and the entire world market.

Should taxpayers also "loan" out money to the Auto Industry, the Airline Industry, or the Steel Industry? Because their industry may collapse? Having public money being loaned out to industries that are shaky to begin with, is anti-free market. These industries have it in their interest to save themselves, they can work out agreements with private banks or lenders. Though they don't have to, because they know they can come to D.C. and cash in the political favors due to them.

Furthermore, our government doesn't own AIG, which I don't understand why people have such a hard time understanding this. The warrant that the Fed got is just insurance so that our full 85 billion doesn't disappear into somebodies pockets.

I think the full ramification of what the FED has done is being misunderstood. If the Fed deposit money with a Bank, or buys an asset, or loans money, it is increasing the money supply. What the FED has done, and what it is continuing to do is print money to solve problems it has caused in the first place. This means more inflation, and a weaker dollar.

If the government acts on the warrants, it essentially gets back as much money that it loaned out as it can, while protecting the stockholders from getting raped by people who would have otherwise made a ton of money off them.

When people buy, stocks, derivatives, and to a lesser degree bonds they do so with the full understanding that Stocks or these other securities don't always go up. If people get stuck holding the bag, that's too bad. That's the free market. Sometimes you win, sometimes you lose.

Strike that, I forgot, in this country we don't believe in Capitalism, we believe in Corporatism.


[edit on 18-9-2008 by Gateway]

Originally posted by hoochymama
Really, the Government doesn't own AIG..........Government takes control of AIG

Interesting that a thread I posted in this very forum got locked because there were sooo many new threads regarding AIG. See here thread

Poor choice in article as it really doesn't go into what kind of "control" they actually have.

www.washingtontimes.com...

Mr. Brusca said the deal may not be as generous as it appears, in part because the government is charging "an extremely high rate" of interest on the loans — 8.5 percent above the London Interbank Offered Rate — which will encourage AIG to quickly sell off assets and pay back the Fed.

"The Fed will get a profit on this, which it should," he said.

The deal appears structured similarly to the Chrysler bailout in the 1980s, giving the Treasury warrants or special shares representing 79.9 percent control of AIG. In addition, the Fed forced out AIG's chief executive, Robert Willumstad, and replaced him with Edward Liddy, a former Allstate executive.

"It was not a nationalization because the Fed does not intend to run AIG," Mr. Brusca said.

I believe that to be a pretty good summary of the situation as it stands.

Should taxpayers also "loan" out money to the Auto Industry, the Airline Industry, or the Steel Industry? Because their industry may collapse?

Yes, because, if these collapse, the people wont have jobs, and the government wont be able to steal money from them in taxes.
These are smart investment decisions by the illegal federal reserve.

Originally posted by Gateway
Should taxpayers also "loan" out money to the Auto Industry, the Airline Industry, or the Steel Industry? Because their industry may collapse? Having public money being loaned out to industries that are shaky to begin with, is anti-free market. These industries have it in their interest to save themselves, they can work out agreements with private banks or lenders. Though they don't have to, because they know they can come to D.C. and cash in the political favors due to them.

You are attempting to create a blanket rule where just the opposite is needed. Two days ago, the Fed flat out refused to bail AIG out of its problems. The situation changed when Lehman Brothers went bankrupt and the market took a huge hit. Our country and its economy could not afford to have the worlds largest insurer and Lehman Brothers investment banking bankrupt in the same 3 day period. The impact would have been too devastating to the market.

This is was in the best interests of our country and our economy. This countries survival is more important than blanket rules and ideas. Sometimes it is best to let the market correct itself, but this wasn't one of those times, and I am glad that the Fed was able to recognize that in time.

Free Market unregulated and left alone is as bad as communism. It works on paper, but in practice, when adding the human element, is a set up for disaster.

I think the full ramification of what the FED has done is being misunderstood. If the Fed deposit money with a Bank, or buys an asset, or loans money, it is increasing the money supply. What the FED has done, and what it is continuing to do is print money to solve problems it has caused in the first place. This means more inflation, and a weaker dollar.

As oppose to what? AIG bankrupting, our economy going down the tube because countless companies has to reassess their balance sheets. You know what makes the dollar weak? Having the economy go to hell. That is EXACTLY what would have happened if we allowed Lehman Brothers and AIG to go bankrupt in the same week.

When people buy, stocks, derivatives, and to a lesser degree bonds they do so with the full understanding that Stocks or these other securities don't always go up. If people get stuck holding the bag, that's too bad. That's the free market. Sometimes you win, sometimes you lose.

Strike that, I forgot, in this country we don't believe in Capitalism, we believe in Corporatism.

You are again making a blanket rule and disregarding the importance of situational factors. THIS is what got us where we are today. In THIS situation, the impact was too far reaching and too dangerous to the health of our country and economy to simply sit by idle.

If you want to stand by your blanket rules and principles, even if it means watching this country fall to pieces, you do that. I, and many others, will opt to hope for whatever decision will best benefit the country and economy. In this situation, the Fed bailing out AIG was the best choice and best chance of stopping the economy from free fall and protecting american interests.

Poor choice in Article??? This is the NY Times, but take it at its worth.

The Point is that when have you seen an article which points out the Government takes control of something and in the same sentence says its a Federal Reserve Bail out. Im not saying its not a GOOD DEAL but at the same time its interesting none the less as far as the verbage is concerned.

Originally posted by Interestinggg

Should taxpayers also "loan" out money to the Auto Industry, the Airline Industry, or the Steel Industry? Because their industry may collapse?

Yes, because, if these collapse, the people wont have jobs, and the government wont be able to steal money from them in taxes.
These are smart investment decisions by the illegal federal reserve.

What people won't have jobs, you mean, the manufacturing jobs oversees? 300 Million Americans are not employed by the Auto Industry.

reply to post by hoochymama


Yes a poor choice in article. It didn't give any details as to what sort of control it was taking. When looking at details you will see that the government isn't running AIG or immediately taking ownership. It is kicking out the old management, and insured warrants in case anything goes wrong. They also have veto power on major decisions, which is important, but still doesn't mean they control the company like they were running it.

reply to post by grimreaper797


So, is this Propaganda on its own people than??? I don't disagree with you but at the same time I am not breaking it down like you are. Most people would ask these questions mentioned in your post. But, if the laymen looked at it they would be like "The Fed/Government is taking over". Is the Government and the Fed one in the same???

This is interesting to me because everything I understand there not the same but at the same time they want to seem the same.

Originally posted by hoochymama But, if the laymen looked at it they would be like "The Fed/Government is taking over". Is the Government and the Fed one in the same???

This is interesting to me because everything I understand there not the same but at the same time they want to seem the same.

The Federal Reserve is coupled with the Federal Government. They act of the governments behalf to an extent. They are taking over in a sense, but it is not like they own AIG or running it for that matter.

Originally posted by Gateway

Originally posted by Interestinggg

Should taxpayers also "loan" out money to the Auto Industry, the Airline Industry, or the Steel Industry? Because their industry may collapse?

Yes, because, if these collapse, the people wont have jobs, and the government wont be able to steal money from them in taxes.
These are smart investment decisions by the illegal federal reserve.

What people won't have jobs, you mean, the manufacturing jobs oversees? 300 Million Americans are not employed by the Auto Industry.

Its about taxes.Regardless who has the jobs.TAXES!
They put some money in, prop it up, they will pull out 300% more in taxes.
Of course to transfer to private company's through defense contracts for $150 bags of unwashed laundry.

Originally posted by grimreaper797

You are attempting to create a blanket rule where just the opposite is needed. Two days ago, the Fed flat out refused to bail AIG out of its problems. The situation changed when Lehman Brothers went bankrupt and the market took a huge hit.

That's funny, is the same argument was said about Bear and Sterns and how if they failed then the Market would come tumbling down. Well, now we have more institutions failing. You are making the case that government is saving the Market from itself, when in actuality the Government has caused these malinvestments in the first place by causing the below market rates of interests after 9/11.

We are at the beginning of Recession, not the end of it. There are more institutions that will fail, throwing money and making everyone else poorer will not solve the problem of having assets, themselves incorrectly priced. They have been inflated, for several years, because of easy credit, the price must come down to meet demand so the market can clear. All that the government is doing now is propping up these assets and not allowing for prices to come down, they are only making the pain last longer, and making my and everyone else's standard of living worse off.

Our country and its economy could not afford to have the worlds largest insurer and Lehman Brothers investment banking bankrupt in the same 3 day period. The impact would have been too devastating to the market.

No the world would still, turn. The Great Depression was not caused by the Stock Market Crashing. The Great Depression was caused by the Federal reserve first of all, by increasing the money supply in the 1920s and thereby causing a bubble in the Stock Market, and then decreasing the money supply after the Stock Market Crashed. Which tightened lending, causing a decrease, in investment which spurred the increased unemployment rate, while at the same time the Federal government propped up prices for certain goods, making things worse.

Here in this case we have the Fed yet again as the culprit of the bubble, but this time instead of decreasing the money supply it is turning the money presses. Thereby not only will people lose jobs, because of the bubble it cause, now people will not be able to afford what they once could have because it is increasing the money supply.

Inflation is worse than a depression, because it distorts interest rates, businessmen will no longer be able to make long run forecasts, and therefore take on less investment and thereby prolong unemployment.

This is was in the best interests of our country and our economy.

Nope, and make no mistake about it. This entire operation by the FED is being spun as in the interest of the "public", but clearly it is not since this company made poor investment decisions. They and the stock holders were thrown a lifeline, while the average American will now have to pay more for groceries or other substances.

How is it in the public interest to have everyone (THAT'S 300 MILLION PEOPLE) being able to buy LESS than they did yesterday.

This countries survival is more important than blanket rules and ideas. Sometimes it is best to let the market correct itself, but this wasn't one of those times, and I am glad that the Fed was able to recognize that in time.

I'm sure the stock holders of AIG, feel the same way as you do.

Free Market unregulated and left alone is as bad as communism.
It works on paper, but in practice, when adding the human element, is a set up for disaster.

Boy, I hate to tell you this, but if you believe that, then you've never been a capitalist to begin with, but a misguided mercantilst. First of all, this country has not been capitalist since the 1850s. Since then we have been slowly but surely moving into a corporatist and now command/ fascist-economy, where a few large industry have lobbied for regulation to minimize competition with the help of big government.

This whole problem wasn't caused by the private sector, it was caused by government intervention and distorting the capital markets, and now instead of trying to get the government's nose out of it, you propose FULL GOVERNMENT CONTROL?

As oppose to what? AIG bankrupting, our economy going down the tube because countless companies has to reassess their balance sheets.

That's part of the market having to correct itself. If the balance sheets currently claims that they hold a house that's worth 1 million dollars, but the current market dictates that the house is only 700 thousand than rather than have the company bury its head in the sand, I'd rather have them correct their balance sheet to accurately reflect the market, wouldn't you? The FED, is trying to prop us these inflated assets, that need to come down.

You know what makes the dollar weak? Having the economy go to hell. That is EXACTLY what would have happened if we allowed Lehman Brothers and AIG to go bankrupt in the same week.

Do you know what makes the dollar weak? Its simple Macro economics do you know what an IS/LM model is? If you have the Supply of any good in this case "dollars" more than is demanded, then the Price for said good, in this case the dollar will fall. This is what is happening to our dollar, when the FED turns up the presses.

The private sector doesn't have control of the money supply, that is sole controlled by the fed. And they are increasing the money supply, not decreasing it, to pay for all these bail-outs, since mom and pop don't have any more money to be taxed on.




[edit on 18-9-2008 by Gateway]

You are again making a blanket rule and disregarding the importance of situational factors. THIS is what got us where we are today. In THIS situation, the impact was too far reaching and too dangerous to the health of our country and economy to simply sit by idle.

People also clamored to have more government intervention after the "CRASH" of '29 all they got was a prolonging of the crash and making it worse, the government gave them a 16 year recession called "The Great Depression".

The government back then tried to prop up prices, they saw the possibility of prices going down as a bad thing instead of a good thing. Prices need to come down in a recession so people can afford things, so that the recovery process can begin.

If you want to stand by your blanket rules and principles, even if it means watching this country fall to pieces, you do that. I, and many others, will opt to hope for whatever decision will best benefit the country and economy. In this situation, the Fed bailing out AIG was the best choice and best chance of stopping the economy from free fall and protecting american interests.

I am too, for protecting American interest, certainly more so than AIG stock or bond holders.

Originally posted by Gateway
It's socialism when it is the Public's money, even if you say it's a loan.

If that's not a definition of socialism, then I don't know what is.

So then the taxes we have always payed in the States is Socialism?