Wednesday, November 12, 2008

One Bailout, Two Bailout, Three..

You get the drift. We are in the middle of bailout mania. It seems everyone is rushing to get some of that bailout sugar from the tax payer. Maybe I should overextend my ability to repay and pick up a few items on my wish list. I would really like a KRIS Super V 16” CRB/SO, a Barrett Model 82A1 with the BORS integrated electronic ballistic computer mounted on a Leupold Mark IV Tactical Scope, and while I am at it I might as well throw in a Nighthawk Custom Heinie Tactical Carry Pistol. Yeah, that's the ticket. If I let my mortgage go, I could purchase all this stuff then ask the .gov to bail me out.

That is not going to happen. Companies and individuals are getting a bit more than they bargained for with these bailouts.

Take Fannie Mae and Freddie Mac for example. The .gov owns all the mortgages held by Fannie and Freddie. Let that little tid bit settle in for a moment. The .gov owns 80% or so of the mortgage market. If the .gov holds your mortgage, do you have any private property rights? If the .gov holds your mortgage, and you get behind, can the government relocate you to a property that you might be better able to afford, maybe a multi-level government run housing project?

The $700 Billion (+++) banking industry bailout is not going to work out quite as we were told when Congress gave Paulson the keys to the Treasury.

From npr:

But Paulson said the financial industry's situation has worsened since the bill was passed, prompting him to spent nearly $250 billion to buy equity stakes in banks.

"Although the financial system has stabilized, both banks and nonbanks may well need more capital...
Our government now owns an equity stake in the banking industry, and is planning on purchasing an even larger stake.

So the .gov owns a large portion of the mortgage, banking, and via AIG, the insurance industries in the United States. Does this fact not give you pause? We were all up in arms when Maxine Waters let it slip that the Dems want to socialize the oil industry, but it seems we are being complacent when it comes to the fact that our financial industry is now basically controlled by the .gov.

The Big Three American auto manufacturers sought to find a position at the hog trough filled with our bailout money. I guess the money we gave them earlier this year to upgrade their manufacturing facilities was just not enough. I think the news from today may have caught them by surprise, they may want to rethink their request for our tax dollars, the cost to them may be to high.

From the Star Telegram:

A key House Democrat is writing legislation that would send $25 billion in emergency loans to the beleaguered auto industry in exchange for a government ownership stake in the Big Three car companies.

House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid are pressing for quick passage of an auto bailout during a postelection session of Congress that begins Tuesday...
Do they even teach the failures of Socialism and Marxism in school any more?


Anonymous said...

"Do they even teach the failures of Socialism and Marxism in school anymore?"

Yes, they do but they always teach that the failure should be blamed on the individual humans who tried to implement the program and not on the political philosophy itself. These same people always blame the free-market for the occasional failure of some businesses instead of the individual humans who made idiotic decisions.

Because they believe socialism has never really been tried then each and every generation has to try it to their own destruction...

Bitmap said...

As far as .gov having influence over people through mortgages, I've thought that was a real possibility. Some agency decides they don't want people living in a certain area, and nobody will get a loan to build a home there.

We've already seen the government put public housing next door to nice neighborhoods so that the people on the dole could get a nice and uplifting influence from their new neighbors. I could see mortgages or mortgage rates being used to do the same thing i.e. you want a house over here? the rate is 9%, but if you are willing to live over there on the other side of the tracks next to section 8, the rate is 4%.

If there is a bailout of automakers I would expect the government to use that as leverage to get manufacturers to make certain kinds of vehicles and not make others.

Now I need to go adjust my tin foil hat.