Gotta love the Big Government types who support the bailouts.
Now American Express is getting bailed out. The new Czar of the U.S.S.A. (United Socialist States of America) waved his sceptre and declared that American Express was now a "bank" and it could borrow money at the Fed's Discount window. So now taxpayers are subsidizing people who can't pay their credit card bills for restaurants.
The Big Three in Detroit might get bailed out - which is really a bailout of the UAW union, which has bled this industry dry. Why are we bailing them out? The United States has a thriving auto industry. It is located in Right to Work states south of the Mason-Dixon line.
California wants a bailout. Because they are spending a lot more than they have. And as we know, government can cut absolutely nothing or civilization itself will collapse. Philadelphia wants a bailout. As I have been warning, many more states and municipal governments have been overspending and relying on borrowed money to balance their books for many, many years. This house of cards will eventually collapse whether they receive bailouts or not.
AIG received more bailout money.
Congress is upset that banks are using bailout money for bonuses, dividends and for purchasing other banks. Of course, there are declarations that bailout money will not be used for such things. But, let's face reality. It all goes into the same bucket of money. So if bailout money is used in other areas, it frees up other money to be used for such things.
Now, Treasury Secretary Paulson has declared that they have to change their plan. The $750 billion bailout (one of many) plan was to purchase distressed assets. Now they want to purchase shares of banks. Government ownership of companies will expand.
However, I remember hearing that we were days or hours from a total fiscal collapse. And, they are still figuring out the plan????? What is going on here?
One member of Congress was upset and declared that this was a "bait and switch". It is far worse. For the public, it has been smoke and mirrors and a bait and switch. And we will be left with one hefty IOU when it is all over. And, as I have stated numerous times, the collapse will come anyway. Because free markets work, even when government tries to intervene and establish "command economy" principles. The only question is how long will the inevitable be delayed and how long and painful will it be when it happens.
Friday, November 14, 2008
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4 comments:
Joe, concerning the auto Industry: No amount of money will make those ugly old companies and their out of date business model young and shiny and new.
Detroit makes an inferor product, and the only way they will ever get off their ass and make a good, new one , is for the industry to collapse, and rise anew from the ashes. One hourly employee costs GN $82 an HOUR! That is insane! They are going to fail, why put off the inevitable, and throw good money after bad to prop up a decrepit system?
To get votes, That's why!
I say let them fail, so that new Industry can take its place. Someone will design a new product to fill the void in the market.
Chris,
"They are going to fail, why put off the inevitable, and throw good money after bad to prop up a decrepit system?
To get votes, That's why!"
I'm afraid you are right. I see this happening in a number of areas. The public school system is failing but the unions have a deathgrip on the politicians to keep the failed systems alive. It's even worse when it's a government project. When private enterprizes fail, they go broke and new enterprizes rise out of the dust to be better, not so with government operated businesses. This is why the schools must go private. If our schools can't compete, how can our students compete against the engineers of the world? There is too much politics running the curriculum and political correctness being taught. If our schools were better, then maybe our youth will get a better, more relevant education to be better engineers so that we can compete with companies like Toyota or even Hyundai. Hyundai has the most advanced manufacturing plant in the world in Alabama and Kia just built one in Georgia. When will we ever wake up?
Joe, we are in a very bad way! How can any sane person look at what is happening and not know what is coming? We have a society where everybody blames someone else for the problems we have and then they depend on these same "others" to bail them out. Too many people are no longer responsible for themselves and have been encouraged by our government to be that way, all in the name of fairness and equality. They say they are the ones with compassion! How can the American people be so ignorant? They have been lied to! Lies keep changing to fit the desired result but truth doesn't and truth won't go away. It can also be brutal! Do you think we will be saying: "Hail to Obama" pretty soon? Many will, just to get those handouts. It's either us or the government that will "rule" us. The majority of the people picked the government, specifically Obama and the Democrat party. Wasn't it the British that tried to rule us once? Didn't we learn anything from that piece of history?
If my memory serves me correctly this is very similar to some of the government intervention prior to the 1929 debacle.
Once the bailouts start when will they end? People are even questioning the wisdom of paying mortgages when their mortgage indebtedness is equal to or greater than 90% of the value of the collateral real estate.
This is insanity. It essentially means the recent real estate bubble was simple a futile exercise in driving consumer spending over the past ten years.
No real value was created. This will be interesting to watch. I fear the worst at this point.
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