Welcome to the United Socialists States of america

Discussion in 'Politics' started by rubibond007, Sep 17, 2008.

  1. The now inevitable nationalization of Fannie and Freddie is the most radical regime change in global economic and financial affairs in decades.

    For the last twenty years after the collapse of the USSR, the fall of the Iron Curtain and the economic reforms in China and other emerging market economies the world economy has moved away from state ownership of the economy and towards privatization of previously stated owned enterprises. This trend was aggressively supported the United States that preached right and left the benefits of free markets and free private enterprise.

    Today instead the US has performed the greatest nationalization in the history of humanity. By nationalizing Fannie and Freddie the US has increased its public assets by almost $6 trillion and has increased its public debt/liabilities by another $6 trillion.

    The US has also turned itself into the largest government-owned hedge fund in the world: by injecting a likely $200 billion of capital into Fannie and Freddie and taking on almost $6 trillion of liabilities of such GSEs the US has also undertaken the biggest and most levered LBO (“leveraged buy-out”) in human history that has a debt to equity ratio of 30 ($6,000 billion of debt against $200 billion of equity).

    So now Comrades Bush, Paulson and Bernanke (as originally nicknamed by Willem Buiter) have now turned the USA into the USSRA (the United Socialist State Republic of America). Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill of $300 billion.

    This biggest bailout and nationalization in human history comes from the most fanatically and ideologically zealot free-market laissez-faire administration in US history. These are the folks who for years spewed the rhetoric of free markets and cutting down government intervention in economic affairs.

    But they were so fanatically ideological about free markets that they did not realize that financial and other markets without proper rules, supervision and regulation are like a jungle where greed – untempered by fear of loss or of punishment – leads to credit bubbles and asset bubbles and manias and eventual bust and panics.

    The ideologue “regulators” who literally held a chain saw at a public event to smash “unnecessary regulations” are now communists nationalizing private firms and socializing their losses: the bailout of the Bear Stearns creditors, the bailout of Fannie and Freddie, the use of the Fed balance sheet (hundreds of billions of safe US Treasuries swapped for junk toxic illiquid private securities), the use of the other GSEs (the Federal Home Loan Bank system) to provide hundreds of billions of dollars of “liquidity” to distressed, illiquid and insolvent mortgage lenders, the use of the SEC to manipulate the stock market (restrictions on short sales), the use of the US Treasury to manipulate the mortgage market (Treasury will now for the first time outright buy agency MBS to manipulate and prop up this market), the creation of a whole host of new bailout facilities (TAF, TSLF, PDCF) to prop and rescue banks and, for the first time since the Great Depression,to bail out non-bank financial institutions, and a whole range of other executive and legislative actions (including the recent bill to provide a public guarantee to mortgage for banks willing to reduce their face value).

    This is the biggest and most socialist government intervention in economic affairs since the formation of the Soviet Union and Communist China. So foreign investors are now welcome to the USSRA (the United Socialist State Republic of America) where they can earn fat spreads relative to Treasuries on agency debt and never face any credit risks (not even the subordinated debt holders who made a fortune yesterday as those claims were also made whole).

    Like scores of evangelists and hypocrites and moralists who spew and praise family values and pretend to be holier than thou and are then regularly caught cheating or cross dressing or found to be perverts these Bush hypocrites who spewed for years the glory of unfettered wild west laissez faire jungle capitalism (and never believed in any sensible and appropriate regulation and supervision of financial markets) allowed the biggest debt bubble ever to fester without any control, have caused the biggest financial crisis since the Great Depression and are now forced to perform the biggest government intervention and nationalizations in the recent history of humanity, all for the benefit of the rich and the well connected.

    So Comrades Bush and Paulson and Bernanke will rightly pass to the history books as a troika of Bolsheviks who turned the USA into the USSRA. Fanatic zealots of any religion are always pests that cause havoc and destruction with their inflexible fanaticism; but they usually don’t run the biggest economy in the world.

    But these laissez faire voodoo-economics zealots in charge of the USA have now caused the biggest financial crisis since the Great Depression and the nastiest economic crisis in decades. So let them be shamed in public for their hypocrisy and zealotry that has caused so much financial and economic damage.
  2. Welcome to the United Socialist States of America, where Fedzilla obligates our tax dollars to prop up businesses that make stupid or possibly even criminal fiscal decisions. It takes a village indeed.

    In overt defiance of the U.S. Constitution, Mao Tse Fedzilla has pledged 200 billion of our tax dollars to prop up Fannie Mae and Freddie Mac, the two largest and hopelessly bankrupt mortgage-finance companies in America.

    These companies failed in part due to “flawed business models,” according to Treasury Secretary Henry Paulson. Ya think? They also failed because Fedzilla is bloated, ineffective and far too corrupt to have provided the necessary fiscal and management oversight.

    Fannie Mae and Freddie Mac are government sponsored enterprises (GSE) but are owned by private shareholders. That’s a screwy business model on its face, but what it essentially means is that when a GSE is about to go belly up, taxpayer dollars are there to bail them out.

    Many people, going back from the Clinton Administration up through the Bush Administration, urged our do-nothing Congress to do something to provide oversight of these companies, but in typical fashion, Fedzilla sat on its hands with impunity.

    Members of Congress were being bought off by Freddie Mac and Fannie Mae to look the other way and do nothing. According to an article on CNN.com by Allan Chernoff, these
    shyster companies paid 174 million dollars to lobbyists to keep our elected officials from doing anything to provide regulatory oversight. Quite simply, our elected officials were bought off. And the U.S. taxpayer gets screwed again. As recently departed Jerry Reed sang, “she got the gold mine, and I got the shaft.”

    Democrats like Charles Schumer and Chris Dodd led the charge to stonewall any efforts to provide oversight of these companies. Dodd is the chairman of the Senate Committee on Banking, Housing, and Urban Affairs and now wants more information about how this happened. What hyperbole, what political posturing, what a fraud, what a perfect, soulless politician. When he had the opportunity to act in the interest of the American people, he didn’t. Case closed.

    Now the solution is to prop these companies up with our tax dollars, and, magically, all the dirty money lobbying will be stopped. Yeah, and I'm going vegetarian and playing banjo in a country band.

    The two guys who ran these companies have been fired, while reportedly walking away with millions stuffed in their pockets. They should be hounded by reporters for the remainder of their days just like the gangsters at Enron. And then forced to pay back every red cent.

    People need to go to jail.

    The Bush Administration should launch the most wide-sweeping FBI investigation in the history of the agency of Fannie Mae and Freddie Mac. Leave no stone unturned, no scoundrel should escape scrutiny. If Fedzilla can investigate and prosecute the Enron Gang, they ought to do the same for Fannie Mae and Freddie Mac.

    We must demand the FBI, the GAO and other watchdog organizations to investigate our elected officials and government workers to determine their complicity in this financial train wreck. We deserve to know who did what or not, how much money their political campaigns received, and if any crimes were committed. Then prosecute to the full extent of the law.

    Government officials entrusted with managing our tax money should be held to an even higher standard than business officers of private industries. I find it arrogant and condescending for our public officials to lecture private business leaders on shady business
    practices when the very people lecturing these individuals are horribly mismanaging our tax dollars. What hypocrites. What thieves.

    The real blame for this financial fiasco rests with Fedzilla. The more power and control we surrender to Fedzilla, the more likely the taxpayer will be left to clean up these inexcusable messes.

    Republican Sen. Jim Bunning is right by saying that propping up Fannie Mae and Freddie Mac with our tax dollars is taking the “free market out of the free market.” He’s also right by saying that Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernake should resign. They ought to be fired and investigated, then prosecuted.

    The goal should not be for tax payers to prop up Fannie Mae and Freddie Mac, but rather, that these two companies should be privatized as soon as possible. The free market. What a concept. GSEs should be immediately abolished as in tomorrow.

    Fedzilla remains a bloated, ineffective, stinking pig. And we have to pay for it. Again.