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| Home Front Economy |
| The barbarously socialist economy |
| 2008-11-06 |
| In the Leninist Soviet Union, one line from Karl Marx was exceedingly unpopular: he predicted that socialism would take over the capitalist societies without the need for a revolution, so cherished by Leninists. Sadly, the history vindicates Marx. Socialism signaled the end of many empires. Ancient Rome went down amid distribution of free grain and show tickets, and inflation. Europe, too old to bear itself, is to all practical purposes a socialist entity. Though the factories are not technically nationalized, they belong to myriad of investors, effectively the entire nation. Since the second Roosevelt, the United States also progressed down the road to serfdom. But the current nationalization of banks still came as a shock. The bailout was completely unnecessary. In the similar circumstances, earlier governments imposed bank holidays. This administration, too, could impose moratorium on large withdrawals. Small depositors would be unaffected and the sharks who had profited from the junk mortgage boom will be duly punished. Small investors as a group suffered comparable losses in the dot-com debacle, and the dot-com industry is more important for the American competitiveness than the subprime mortgage casino, but no one thought of bailing out the dot-com investors. In the current crisis, many other companies besides banks are doomed, and bailing out all of them is unrealistic. A trillion-dollar bailout cannot possibly be helping the working Americans: they just don't hold that much in the affected bank and 401k pension accounts. By far, most of the government loans reimburse the investor sharks, including foreign ones. Why did the banks fail across the world? The only reason is that large investors fled mortgage markets, cached and withdrew their investments. Laden with CMO (collateralized mortgage obligations) investments, the banks appeared short on cash; well, don't speculate. It is unrealistic to expect that the trillion dollars would save American banks. In the S&L default twenty years ago, the total cost of bailout exceeded original estimates by several times. American taxpayers will be left to repay trillions of dollars the administration borrows to cover the speculators' losses. The moral dimension got lost in the bailout discourse, but realize how evil it is to tax the working class for the affair which led to manifold increase in their mortgage payments. The sharks created the real estate bubble which pushed up house prices and consequently mortgage payments. For years, working class was paying the inflated mortgages obediently while the investors realized staggering profits -- and now will compensate the investors for their losses which are actually only lost profits. Banks milked consumers, earned outrageous profits for their investors, and now consumers has to bail them out without even an attempt to charge back the fraudulent profits. Regardless of economic feasibility, the moral dimension should come first. But there is no economic feasibility, either. Speculators withdraw large money from the real estate bubble to create other bubbles: in grain, oil, etc, further destabilizing the economy. Not only taxpayers bail out the sharks, but they also suffer from the resulting increase in food and gas prices. The government claims that if it allows the mortgage industry to fail, common Americans won't be able to buy houses. What nonsense. If the people of moderate means are of any concern to the government, house prices must be allowed to fall to their 1995 level -- that is, three to five times. The return of house prices back to the pre-bubble levels is not only economically imperative, but also socially a must. |
| Posted by:g(r)omgoru |
| #5 RUMORMILLNEWS > VOICE OF RUSSIA RADIO = claims RUSSIA HAS ENOUGH GOLD RESERVES EQUAL TO THE IMF [approxi 3000 = 30,000-plus Tonnes]!? Russia allegedly is also desirous of setting up a NEW RUSSO-EUROPE INTERNATIONAL SECURITY ARRANGEMENT AND AGREEMENT, + NEW MOSCOW-BASED FINANCIAL-ECON HUB [read, anti-US]??? |
| Posted by: JosephMendiola 2008-11-06 22:20 |
| #4 WORLD FORUM POSTER [China/paraph = Chinglish translation] > USA IS FACING US$1.0TRILLION NATIONAL DEFICIT PLUS USDOD US$600.0BILYUHN BUDGET PLUS COMPANY-INDUSTRY BAILOUTS PLUS MULTI-STATE DEFICITS AND STATES WELFARISM WHICH IT CANNOT OR IS HARD-PRESSED TO PAY FOR. PRESIDENT-ELECT OBAMA SHOULD JUST HAVE USA ADOPT COMMUNISM AND BE DONE WITH IT! * ALso from SAME > POSTERS - US WON THE COLD WAR AGZ THE USSR BUT LOST THE IDEOLOGICAL STRUGGLE BETWEEN CAPITALISM AND COMMUNISM SOCIALISM; |
| Posted by: JosephMendiola 2008-11-06 22:14 |
| #3 There is a whole lot of debt in the world which can not be repaid. It must either be written off or inflated away. Either way the ultimate loser is the one who had saved up (invested) his excess productivity rather than consuming it some way. NO investments can be totally safe - either you'll lose to inflation, or to taxes, or to 'nationalization', or... the end result is the money can only come from those who have it. |
| Posted by: Glenmore 2008-11-06 10:57 |
| #2 Since the second Roosevelt, the United States also progressed down the road to serfdom I would contend we took the turn down that road with Woodrow Wilson. |
| Posted by: Glenmore 2008-11-06 10:53 |
| #1 good article. |
| Posted by: Broadhead6 2008-11-06 09:52 |