Bank bayout by the US govt: fiasco of conservative ideology?, page 1

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Topic started on 9-10-2008 @ 08:27 AM by buddhasystem

According to these news, the US is considering buying shares in US banks. That's government ownership of financial industry and the most socialist move I've seen in my life, by the US government. Again, that's direct ownership. Wow. Just wow.

I've heard a lot of "pinko socialist" vitriol thrown around in various discussions, by conservatives. It is remarkable that after a long period of deregulation and various excesses that it engendered, the only solution that this administration found to the crisis is openly socialistic. That's a flip-flop of biblical proportions.

Now, how can you continue, with a straight face, to preach the conservative ideology, with its government non-intervention and the miracles the markets are capable of pulling off?

To me, this seems like a full blown crisis of conservatism in the US and it might be a permanent one.

reply posted on 9-10-2008 @ 08:36 AM by thisguyrighthere

There never was any complete deregulation. It was all partial. Government giving incentives and setting quotas for lender to make high-risk loans to low-income people is very far from "deregulation."

Even all that meddling would have been fine if the fools/crooks who kept investing in empty debts and selling them on to another fool/crook to make a profit were allowed to fail. If all of these bad loans were left free to run out and those who took the bad loans kicked out on the street and if all the house "values" crashed back down to realistic levels and the lenders who bought made the bad loans and the investors who bought the bad loans were allowed to shut down and collapse everything would be fine.

But the fed had to make the most "pinko socialist" move ever and float these fools/crooks with my money. The money I was so careful not to blow in crappy investments, on a home in an inflated artificial market, or on any other completely asinine debt Americans seem so fond of accruing.

We need all of this fake bloat since the "New Deal" to wipe itself out. The longer we keep propping it up and pretending anything has any real value the more devastating the final correction will be.

reply posted on 9-10-2008 @ 08:46 AM by buddhasystem

Originally posted by thisguyrighthere
There never was any complete deregulation. It was all partial. Government giving incentives and setting quotas for lender to make high-risk loans to low-income people is very far from "deregulation."

High-risk loans by and in themselves are a small part of the problem, because they are reflected on balance sheets as such. When you start packaging them in MBS and in products derived therein, the accounting doesn't work anymore because of the introduced complexity.

Even all that meddling would have been fine if the fools/crooks who kept investing in empty debts and selling them on to another fool/crook to make a profit were allowed to fail.

fools/crooks are failing all right, and taking people's money with them.

Case in point - there had been warning about the inherent instability in the way the real estate sector was being financed. It was government's duty to step in and get some goddamn checks and balances in place. It failed to do so due to their ideology and now they are robbing us beyond the wildest imagination of the pinkiest, stinkiest socialists who ever walked on this planet.

Middle way is the answer, not these ideological shenanigans.

reply posted on 9-10-2008 @ 08:47 AM by nyk537

reply to post by thisguyrighthere

Agreed.

Honestly, you can trace this all the way back to Jimmy Carter if you want, to his push back then for lenders to start making loans to those who couldn't afford them in the name of "affordable housing." Then we can go back and find Bill Clinton expanding this philosophy and making it criminal to deny virtually anyone for a loan, whether the bank felt they were safe or not.

This has nothing to do with Conservative ideology my friend. People like to assume that since Bush was President that this is all a Republican or Conservative problem, but it isn't. Bush isn't even a Conservative to begin with.

reply posted on 9-10-2008 @ 09:10 AM by buddhasystem

reply to post by nyk537

You chose to ignore the decisive factor of financial leverage used by the banks, in this crisis. Risky loans by and in themsleves wouldn't have caused this problem, because ultimately banks have to finance the loans and the rates would have gone higher, thus situation correcting itself. Instead, due to unregulated free-for-all in the MBS-based financing scheme, banking sector became a casino in which we all lost.

reply posted on 9-10-2008 @ 09:14 AM by justsomeboreddude

IMO, This whole bank bail out is Socialism. Its sad when even the republicans are becoming socialist. Just wait until Obama gets elected with a democratic Congress. We will become so socialized they wont even be able to call this America anymore.

[edit on 9-10-2008 by justsomeboreddude]

reply posted on 9-10-2008 @ 09:27 AM by buddhasystem

Originally posted by justsomeboreddude
IMO, This whole bank bail out is Socialism. Its sad when even the republicans are becoming socialist.

Exactly. My point it, too much of a good thing (like conservative ideology put in practice) is bad for your health. Look at what happened... I hate this bailout thing.

Just wait until Obama gets elected with a democratic Congress. We will become so socialized they wont even be able to call this America anymore.

Don't dramatize... I think we'll come out of this stronger than ever... Like I said, middle way is the key. Buddha said that, too

reply posted on 9-10-2008 @ 09:40 AM by nyk537

Originally posted by buddhasystem
I hate this bailout thing.

And you think Conservatives like myself don't? This bail-out is the embodiment of everything Conservatism is against!

Like I said, middle way is the key. Buddha said that, too

There is no middle way. You are either for something or against it. The middle way is just an excuse to not have to take a stand on anything.

reply posted on 9-10-2008 @ 09:45 AM by buddhasystem

Originally posted by nyk537
The middle way is just an excuse to not have to take a stand on anything.

And therein lies the problem. "Only Sith deals in absolute", as they said in Star Wars.

Extremism is stupid.

I'm a pragmatic centrist and imho this can be a healthy capitalist country and yet be supporttive of its citizens when it comes to things like healthcare. There is no contradiction in this.

reply posted on 9-10-2008 @ 09:48 AM by Merriman Weir

Originally posted by buddhasystem
According to these news, the US is considering buying shares in US banks. That's government ownership of financial industry and the most socialist move I've seen in my life, by the US government. Again, that's direct ownership. Wow. Just wow.

I've heard a lot of "pinko socialist" vitriol thrown around in various discussions, by conservatives. It is remarkable that after a long period of deregulation and various excesses that it engendered, the only solution that this administration found to the crisis is openly socialistic. That's a flip-flop of biblical proportions.

Now, how can you continue, with a straight face, to preach the conservative ideology, with its government non-intervention and the miracles the markets are capable of pulling off?

To me, this seems like a full blown crisis of conservatism in the US and it might be a permanent one.

As someone with socialist tendencies, what particularly galls me about this is how because of the last resort nature of the bail-outs and the surrounding mess, the idea that socialism is a terrible thing is going to be even more indelibly etched on the psyche of many Americans.

This is pitched as 'socialist' but really its socialism where no one, other than the richest, are actually seeing any benefit; that's not really socialism that I recognise. I know the idea of socialist healthcare is very, very unpopular with some vociferous Americans, but I think if this bailout had been to prop-up some 'socialist' healthcare scheme, after the initial explosion of "WTF?!?", the average American would appreciate the change. I'm thinking of the many, many Americans who work hard, everyday, for many hours and still can't get treatment they deserve but can't afford here. However, with this particular 'socialist' move, I doubt many Americans will see or feel the benefits at all, at least not for a very long time.

To me, whilst this might be perceived as socialism by some, I only see it as a continuation of the little guy getting shafted by the big guy.

[edit on 9-10-2008 by Merriman Weir]

reply posted on 9-10-2008 @ 09:51 AM by buddhasystem

Originally posted by Merriman Weir
To me, whilst this might be perceived as socialism by some, I only see it as a continuation of the little guy getting shafted by the big guy.

I mostly agree with you. My point was on a purely technical level -- getting a stake in a bank basically means a takeover and govt ownership. Not more, not less. I was not talking about substantial elements of us being robbed -- this is indeed the case and I put the blame on people in Washington, be they Dems or Reps. But it irks me to think of all these fabled miracles of "free markets" which turned out to be a highway robbery.

reply posted on 9-10-2008 @ 10:05 AM by Merriman Weir

Originally posted by buddhasystem

Originally posted by Merriman Weir
To me, whilst this might be perceived as socialism by some, I only see it as a continuation of the little guy getting shafted by the big guy.

I mostly agree with you. My point was on a purely technical level -- getting a stake in a bank basically means a takeover and govt ownership. Not more, not less. I was not talking about substantial elements of us being robbed -- this is indeed the case and I put the blame on people in Washington, be they Dems or Reps. But it irks me to think of all these fabled miracles of "free markets" which turned out to be a highway robbery.

Genuine apologies if you thought that I was singling you out for anything, I was only replying in the context of the "pinko socialist" comments (that others were making) which you mentioned in your initial post.

Free markets are never free, they can bought like everything else!

reply posted on 9-10-2008 @ 10:16 AM by Benevolent Heretic

reply to post by buddhasystem

You hit the nail on the head with this post.

I believe, as do most of the politicians, that there's enough blame to go around on this issue. Democrats played a part, Republicans played a part, homebuyers played a part. But the ones MOST at fault are the sleazy, greedy banks, who loaned out $40 for every $1 they had to people who couldn't afford to repay the loans, without telling them the "tricks" they would have to perform, financially, down the line.

I don't care if the government allowed it or not, they should have known that lending out 40 times more than you have to those who can't afford to pay it back is suicide! A kindergartener could figure that out! What were they thinking?

I happen to think that every house loan should come with a payment sheet for the 30 years of the loan, detailing every payment. If people saw how much principle and interest they were going to pay and how much they were going to pay over the years for their house AND what exactly their house payments would be over time, those who couldn't afford it wouldn't take the loans.

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