Memo to Republicans: Who's the Socialist?

I live in Houston, Texas. All we have on the AM radio dial is right-wing radio. While 24 hours of the likes of Rush, Hannity and their ilk may seem a bit much (and it really can be at times) it also offers some great humor.

Exhibit number 1. After Obama's exchange with "Joe the Plumber" right wing pundits were accusing Obama of being a socialist or a Marxist. I found this to be incredibly funny in light of recent market events. Consider the following:

The Federal Reserve said Wednesday it had authorized a new 37.8-billion-dollar cash infusion into insurance giant AIG, which is under fire over a lavish spa retreat paid for by the company after its rescue by the government.

The newly nationalized company, saved from bankruptcy last month and propped up with increasing quantities of public money, has burned through the majority of its first line of credit of 85 billion dollars.

The US government is lending money directly to insurance companies.

Exhibit number 2:

Michigan Sen. Carl Levin said he may seek an additional $25 billion in loans for the auto industry before the end of the year, citing deteriorating economic conditions for Detroit's car makers.

Levin, D-Mich., said doubling the loan program to $50 billion would help automakers during a difficult period for the industry. Congress approved a $25 billion loan program last month, but credit markets have tightened since then and the companies have reported dismal sales figures.

Has anybody heard of a presidential veto on this? Nope.

Exhibit number three:

Treasury Secretary Henry Paulson urged banks receiving $250 billion in capital injections from the government to use the funds to spur economic growth.

``We must restore confidence in our financial system,'' Paulson said at a press conference in Washington. ``The needs of our economy require that our financial institutions not take this new capital to hoard it, but to deploy it.''

With the equity purchases, Paulson is using more than a third of the $700 billion in government support Congress gave him the authority to use on Oct. 3. He didn't identify any of the lenders. People familiar with the plan said nine companies will get $125 billion: Citigroup Inc., Goldman Sachs Group Inc., Wells Fargo & Co., JPMorgan Chase & Co., Bank of America Corp., Merrill Lynch & Co., Morgan Stanley, State Street Corp. and Bank of New York Mellon Corp.

The US government is now in the bank ownership business.

In fact, the US government's involvement with private enterprise has never been more pronounced than over the last month or so. We've seen unprecedented direct involvement in the capital structure of one of the world's largest insurance companies, the nine largest US banks and the auto industry.

So, who's the socialist again?

Comments

[avraamjack]

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It is interesting how fast the intellectual investment in "creative destruction" was abandoned, when the well connected big players were about to be creatively destroyed.
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Perhaps we can now progress to "creative reconstruction" ?
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[avraamjack]

or "creative construction"

[philosopherkingtomas]

make sure people are aware its not a tax hike for the rich but extinguishing the Bush tax cuts for the rich, big difference it is!

[philosopherkingtomas]

BusinessDay

There is a $US60 trillion market for credit enhancement, entirely unregulated and which nobody seems to know much about, whose retail equivalent is borrowing with no more than a personal guarantee, and without having to stump up one red cent in collateral.

The more bizarre examples of risk involve the likes of tin-pot hedge funds insuring giants like rescued insurer American International Group (AIG) for a fee. This is cowboy stuff which would not have been tolerated by the auctioneer in a Wild West horseflesh sale 200 years ago, let alone by the local sheriff.

It is important to note that the Lehman CDS settlements are more of a loss transfer than a loss. In other words, there will be winners and losers. You can buy CDS credit protection and you can sell credit protection.

It all goes to the banks' proclivity to horde cash and their reluctance to deal with each other. The collapse of other institutions such as Washington Mutual and the banks in Iceland are likely to spawn a wave of credit derivative claims too.

It is not just banks who play in the CDS "cloud", it is insurance companies and shadowy, unregulated hedge funds domiciled in tax havens.

Times are tough, but some look for levity, as one joke doing the rounds goes:

"This is way worse than a divorce ...I've lost half my net worth and I still have my wife."

[elizaconnors]

In support of my earlier comment that this bailout is simply a huge wealth transfer from normal folks to the wealthy, see this:

http://www.nytimes.com/pages/opinion/index.html

[Pdubya]

Hale: The people are divided by party. The sycophants are the pundits. The Hill is united....one party.

There are only remnants of true left and true right with our representatives.

This has been exampled time and time again: Iraq funding, FISA, Patriot Act, Military Commissions Act, Bailout...etc etc etc.

[Craig]

Doubling the national debt of the worlds largest economy may be the largest experiment in central planning in history. It would make Carl Marx blush. Some how our right wing government knows what is best for future generations.

[RedneckDem]

According to the Constitution, as long as our basic freedoms are guaranteed there is no set way of doing business. The only ongoing theme in the Constitution and the Bill of Rights is whats best for all citizens. Managed Socialism may be right in some situations and regulated free markets right for another, but one thing that must be kept in check at all times is the same greed and avarice that keeps repeating itself to the same tune over and over and over and over....

In the Constitution Article 1, Section 8, Congress shall have the power: To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

[Pdubya]

only gold and silver shall be currency. only congress shall issue it.


those two things would have prevented this.

fiat currency issued by a private cartel? BOOM!

[olephart]

You present cogent, factual analyses of events and policies that prove points that are lost on those you admonish for hypocrisy and duplicity. The simple fact is that if rational thinking were relevant to the conclusions of those who are swayed by right wing propaganda, they wouldn't be swayed by right wing propaganda. It's a Catch 22. You have witnessed on this site the postings of those of that ilk that are even a notch above the average dittohead (they write in complete sentences). Their minds are filled with misinformation, non sequiturs and are impervious to facts. When called on their misconceptions they are incredulous and respond as petulant children denying any and all aspects of factual arguments and logic. Thus yours is a Quixote like Quest seeking to slay the dragons of deceit armed only with truth.

[Rule Of Law]

Ole, just because what the elites have planned and effectively gotten away with goes counter to our idea of rational--working in the best interest of society as a whole, considering the lives of our fellow men, etc--does not mean that it wasn't well conceived and impressively implemented. I would never hold up a train, or a bank or a stagecoach--if we still had them--but I sure understand the mentality of those who would.

[dadw5boys]

IF YOU LIVE NEAR A MILITARY BASE MAKE SURE THE REPUBLICANS ARE NOT CHALLENGING THE VOTES OR THE ABSENTEE BALLOTS OF SOLDIERS IN IRAQ.

THE REPUBLICANS LIKE TO CLAIM TOO MANY PEOPLE ARE USING THE SAME ADDRESS.

A MILITARY BASE CAN HAVE 300,000 PEOPLE OR MORE REGISTERED TO VOTE.

THE REPOUBLICANS MAKE ONLY ONE CHALLENEGE ONE TIME FOR ALL THE VOTES FROM THAT ADDREESS AND THE SOLDIERS VOTES DON'T GET COUNTED,!!!!!!!!!!

[ReasonIsMyReligion]

Note that they also like boosting the headcount in zones that have prisons -- even though the prisoners can't vote in their "home" districts.

[joebaggadonuts]

That way when additional voters are added to the Diebold totals, no one will complain...

[PT6]

TECHNOLOGY CAN SPUR THE ECONOMY, REMOVE CORRUPTION, AND AVOID MORE BAILOUTS!

FIVE KEY FACTS:

1. American Taxpayers Own Fannie, Freddie, and a group of Banks!
2. Mortgage Companies and Banks were at The CENTER of the Housing and Financial CRISIS!
3. Crisis Continues Because Homeowners can not Afford TRICKY Loans and are Walking Away!
4. The Current FED RATE is 1.5%!
5. Technology and the Internet are Sophisticated Tools for Automating Loans!

Why not use the Internet and the New Taxpayer Owned Banks to provide direct low cost loans using Automation while Eliminating the Corrupt Middle Men (i.e., Mortgage Companies and Banks)?

The rate on the new loans would be 2.5% to 3% to provide the New Taxpayer Owned Banks with a 1% to 1.5% margin!

Automation can be used to verify employment, verify home title, check credit, and do 98% of the loan Preparation. This eliminates all the mortgage fees, all bank fees, all title fees, most verification fees, and most documentation work done via internet and technology.

This could easily be accomplished using today's technology at a much LOWER COST!

The Savings for AMERICANS will spur the Economy more than any added Bailout Plans

The Savings can be used to paying debts, buy American Cars, buy American Real Estate, and all kinds of American goods plus help other countries in crisis by buying their goods!

[elizaconnors]

Here's the kicker. The banks that we (WE!) have lent money to have no obligation to use that money to lend to us (read Joe the plumber). And, many of these banks (read Lehman and others) have said that they have no intention to lend this money out.

All we have done is give the banks tons of money to prop up their balance sheets so that their investors are happy. We have given them money to return to shareholders in the form of dividends or, possibly, stock price.

Who are these dividend receiving and capital gains recovering shareholders? Not me or most of you, I can assure you. It is the top 1% of the population that the Republicans are so keen on protecting.

The Republicans have saved their collective bank accounts in the name of helping the average Americans. No expenses will be brought under control, despite all the public hang wringing by AIG about their very public excesses. The banks won't give up trading in risky vehicles because they know that there is no downside. The American people are there with open arms to protect them.

Paulson's argument is that Americans are too invested in capitalism to allow direct intervention into the financial sector. It would violate some political idealism that we have. So, for the sake of extreme capitalism we have handed our money to folks that have already shown us that they cannot calculate risk without proper regulation; which we do not have.

[SurfCat]

NOT "socialism". Try FASCISM where private corporate crime is now wagging the government dog even more obviously than it did before.

McCain and the GOP were obviously on board for this latest cash-for-trash Wall Street Bailout but Obama and establishment Democrats pushed and clamored for it as well.

Let's just say Washington and the MSM are owned and operated by the usual charlatans.

[ReasonIsMyReligion]

It's only socialism if you help someone making less than $500k/yr. Duh.

[dolphy]

Remember when Raygun said that the government is the problem? These a**h***s are so corrupt, not a single financial system will survive if these current crop of business people continue to run our economy.

[marijam]

Where was the money to help Boeing after 9/11? Why doesn't aerospace rate with Washington any longer? Personally, I think that its a mistake for our government to assist in creating another company too big to fail by assisting GM in purchasing Chrysler and I certainly don't think the government should help destroy jobs. I'm sick and tired of hearing the "masters of the universe" say that "waste and inefficiencies" can still be wrung out of the airline and aerospace industry and I certainly don't want to hear it about the automotive industry. What they are really saying is, "kill the unions". No wonder young people aren't getting married any more, no wonder there are more single adults than married couples, who can get married when there's no job security, no health insurance security, no retirement security, etc., etc?