I spent several sinus infection fogged hours reading about the financial crisis yesterday. I'm pretty groggy, but one moral should be drawn from the Bear Stearns disaster...
The Free Market Doesn't Work!
Conservatives spout the free market mantra whenever a sensible guidance is about to be enacted into law. They grandstand and preach and make stuff up to justify doing away with OSHA, the EPA, and TAXES. Until they themselves have eaten so much of America's seed corn that they realize they are about to starve. Do we hear them shouting at their broker's, "Stop...Let the Free Market work?"
That putrid odor you smell and that forbidding sound you hear is the mass of financial maggots demanding a Government bailout...With Your TAX money.
We are not talking about bailing out a local bank or even one that serves the middle class. Most of us have no use whatsoever for a financial institution that is driven by speculation and the creation of diabolical financial instruments that are so convoluted that no one understands them, not even the CEO of Bear Stearns, who was off playing somewhere as his corporation collapsed. I take solace in his stock portfolio losing a Billion Dollars this week. The Free Market at work, I say.
Mortgage providers have pushed larger and riskier loans to people who simply could not afford them if interest rates were to go up, or their employment situation were to change. Both happened. Their jobs were auctioned off to low bidders all over the world...Interest rates an balloon mortgages went up drastically.
Working people can't pay their bills. What money they have is going to pay for gas, almost triple now, heating, ditto, and food, triple ditto. The social situation that this scenario leads to was called "Bastille Day" in France.
Now, the Bush Administration has ridden in on an Ass, not a white stallion, and bailed out Bear Strearns with guarantees of over 30 Billion Dollars so that it can be sold for less than the value of the building that houses its corporate offices. That 30 billion will come from...Taxes. And who pays taxes?
...The very people who have lost their jobs and now their houses. The money will bail out the corporation who sold their jobs and foreclosed on their houses.
It looks to me like Conservatives, if they had consciences, would fall on their swords. That would be a free market solution, but instead, they will ask you and me to take the dive.
It will get worse before it gets better.