The Senate, with the voting support of John McCain and Barak Obama, today passed the great socialist, pork barrel bailout plan in which the government indefinitely continues to supply funds to promote liberal social engineering. No more will Americans need to concern themselves with buying only what they can afford, because the culture of handouts was officially ratified by the Senate today. The only obstacle left is the House, and how much longer can they hold out? We hope forever, but obviously the opposition numbers won't hold up much longer.
From now on, the United Welfare States of America will happily supply minorities and the impoverished with unqualified loans despite the fact that they have no money, no steady employment and no security. When the banks that hand out the politically correct money are subsequently stuck with the defaults they won't need to worry that they'll go under, or lose there ability to compete in the market. Nope, they'll hand the bad note over to the Treasury and tell them to print some more money and write it off.
The McCain campaign had a golden opportunity to stand for the 80% of Americans who loathe the bailout. He had a fierce opposition in the House that represented the overwhelming majority of Americans who are getting handed the bill without being given a proper voice. This was the moment for him to stand up, make the bold decision to stand against the socialist bailout and to support the American people.
He failed us.
McCain went staight into the tank with the corrupt, affirmative action left who are on the take with social activist groups like Acorn and LaRaza. He led nothing, did nothing, and followed the lead of Bush/Pelosi/Reid/Dodd/Frank/Paulson and Obama against the American people to support legislation to continue business as usual in Washington.
If McCain were really any sort of "reformer" he would have stood up on the Hill and said "NO! NOT ON YOUR LIFE WILL I SUPPORT THIS BILL!" It would have made him a hero for the average American that rightly thinks this deal is foul. It would have authenticated his claims to being a maverick who will end the waste and corruption in Washington.
He didn't, he turned his back on everything he claims to stand for, and everything that the American people who supported him believed him to be. I was disgusted with McCain before the campaign began because of his failure to stand for core conservative principles on the economy, immigration, interrogation and global warming.
I had hope again when he nominated Sarah Palin as his VP, because she stood for everything we doubted him for, and made us believe again in the conservative movement that Bush & Company had given such a bad name to over the past 8 years.
Alas, just as Palin has proved to be a mirage, so, too, has McCain's credibility as a leader of the conservative movement. We so hoped for more, we so wanted to believe in the illusion of two idealists going to Washington on their white horses to save the day, but what we got is a leader of empty promises and a sidekick with an empty head.
I look at McCain, I look at Obama, I look back again at McCain and can no longer tell one from the other. Whoever wins is irrelevant, because either way we are the real losers who will be stuck with their trillion dollar tab at the end of the day.
-MZ
Showing posts with label bailout. Show all posts
Showing posts with label bailout. Show all posts
Thursday, October 02, 2008
Wednesday, September 17, 2008
Bailing out the Fed
Who's going to bail out the fed?
The fed last night bailed out AIG for nearly $90 billion dollars. Before this, they bailed out Mae and Mac for an estimated $300 billion. Before that, the fed bailed our Bears & Stearns for nearly $30 billion. All told, we are up to nearly half a trillion dollars in federal bailout money and counting.
Who will pay for this bailout? WE WILL.
The two questions to ask: Why did this happen, and what should now be done?
First we look at how this happened. It's logical, and not as complicated as you may think. The Clinton administration wanted to do the politically correct thing by pressuring lending institutions to give unsecured money to unqualified minorities, and guarantee it through the secondary market of Mae and Mac - organizations quasi run by the government.
The idea was that all americans should be ENTITLED to a home, and the government would see to it that all people could get unsecured money from banks by guaranteeing loans would be good even if the recipients were grossly unqualified.
This practice expanded into a giant unsecured mortgage lending explosion, eventually providing the giant influx of lending money available to ordinary americans, and creating the housing explosion we saw in the first 5 years of the Bush administration.
Of course, we now see the fall out.
While the banks gave out money to anyone with a heart beat, the housing market began to show signs of serious failing beginning in 2006. People had seen the artificial appreciation of their properties begin to stall. Houses stopped selling because the bloated market had reached the breaking point. Bubbles began to burst and defaults started to creep in as the zero down, interest free loans came do to be paid.
Of course, collapse was inevitable. A house worth 100k that suddenly became worth 350k when money was more available than dirt could only be bought if buyers took out the big loans. The american people were in effect held hostage by the government intervention that created the artificially inflated market, forced to take out giant loans if they wanted to buy a house, and then hope that they would be in a permanently appreciating market that would provide access to unlimmited home equity cash.
Now we see the curtain has been lifted. People predictably are now stuck in homes they can never hope to sell, owing double or triple their value, and defaulting as the money dries up. The collapse of the housing market causes record unsold inventory stagnating the market. Repossession and auction becomes the norm. People declare bankrupcy left and right.
What happens to mortgage banks who have lost their cash cow? They go under. Suddenly the government controlled secondary market that floated all these bogus loans is caught with billions of dollars in unpaid, defaulted debt. The government that created this mess in the first place then steps in, bails out Bears and Stearns, then Fannie Mae and Freddie Mac, AIG and who knows how many more, and the American people are handed a bill.
A very, very big bill.
What do we do from here? The dems will tell us that the way out is through more government intervention. More government control and regulation of the lending market to make sure the economy won't fall too far and too hard.
McCain, has said he wants to reform the marketplace by eliminating those artificial safety nets the government issued that got us into this mess to begin with. He wants accountablity. He wants to end the madness by stopping the banks reckless money lending policies the government itself was responsible for creating.
I believe McCain is right. The government intervention caused this mess, and throwing more federal money and regulation around is the worst possible thing we could do to our economy. We need to go back to fiscal responsibility. We need to end the "hand out" mentality that begins with government promising "a roof over everyone's head, a chicken in everyone's pot", cradle to grave entitlement. This mentality extends all the way up to the top, where every failed lending institution is given hand-outs from the government, billions and trillions worth of handouts, so that they can keep giving more handouts to americans who are ENTITLED to the "dignity" of new houses, new cars and universal day care.
NO MORE!
McCain is right. We need to stop the madness, reform the government, demand accountability, and eliminate reckless financial policy. Institutions need to know the government will not step in with juicy hand outs and bail outs when their risky, dangerous monetary decisions backfire.
-MZ
The fed last night bailed out AIG for nearly $90 billion dollars. Before this, they bailed out Mae and Mac for an estimated $300 billion. Before that, the fed bailed our Bears & Stearns for nearly $30 billion. All told, we are up to nearly half a trillion dollars in federal bailout money and counting.
Who will pay for this bailout? WE WILL.
The two questions to ask: Why did this happen, and what should now be done?
First we look at how this happened. It's logical, and not as complicated as you may think. The Clinton administration wanted to do the politically correct thing by pressuring lending institutions to give unsecured money to unqualified minorities, and guarantee it through the secondary market of Mae and Mac - organizations quasi run by the government.
The idea was that all americans should be ENTITLED to a home, and the government would see to it that all people could get unsecured money from banks by guaranteeing loans would be good even if the recipients were grossly unqualified.
This practice expanded into a giant unsecured mortgage lending explosion, eventually providing the giant influx of lending money available to ordinary americans, and creating the housing explosion we saw in the first 5 years of the Bush administration.
Of course, we now see the fall out.
While the banks gave out money to anyone with a heart beat, the housing market began to show signs of serious failing beginning in 2006. People had seen the artificial appreciation of their properties begin to stall. Houses stopped selling because the bloated market had reached the breaking point. Bubbles began to burst and defaults started to creep in as the zero down, interest free loans came do to be paid.
Of course, collapse was inevitable. A house worth 100k that suddenly became worth 350k when money was more available than dirt could only be bought if buyers took out the big loans. The american people were in effect held hostage by the government intervention that created the artificially inflated market, forced to take out giant loans if they wanted to buy a house, and then hope that they would be in a permanently appreciating market that would provide access to unlimmited home equity cash.
Now we see the curtain has been lifted. People predictably are now stuck in homes they can never hope to sell, owing double or triple their value, and defaulting as the money dries up. The collapse of the housing market causes record unsold inventory stagnating the market. Repossession and auction becomes the norm. People declare bankrupcy left and right.
What happens to mortgage banks who have lost their cash cow? They go under. Suddenly the government controlled secondary market that floated all these bogus loans is caught with billions of dollars in unpaid, defaulted debt. The government that created this mess in the first place then steps in, bails out Bears and Stearns, then Fannie Mae and Freddie Mac, AIG and who knows how many more, and the American people are handed a bill.
A very, very big bill.
What do we do from here? The dems will tell us that the way out is through more government intervention. More government control and regulation of the lending market to make sure the economy won't fall too far and too hard.
McCain, has said he wants to reform the marketplace by eliminating those artificial safety nets the government issued that got us into this mess to begin with. He wants accountablity. He wants to end the madness by stopping the banks reckless money lending policies the government itself was responsible for creating.
I believe McCain is right. The government intervention caused this mess, and throwing more federal money and regulation around is the worst possible thing we could do to our economy. We need to go back to fiscal responsibility. We need to end the "hand out" mentality that begins with government promising "a roof over everyone's head, a chicken in everyone's pot", cradle to grave entitlement. This mentality extends all the way up to the top, where every failed lending institution is given hand-outs from the government, billions and trillions worth of handouts, so that they can keep giving more handouts to americans who are ENTITLED to the "dignity" of new houses, new cars and universal day care.
NO MORE!
McCain is right. We need to stop the madness, reform the government, demand accountability, and eliminate reckless financial policy. Institutions need to know the government will not step in with juicy hand outs and bail outs when their risky, dangerous monetary decisions backfire.
-MZ
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