You have to love The House of Representatives. Each member up for election every two years. Each with a finate and focused constituency. When a bill stinks, it’s the House that sniffs it out. Today’s victory (or failure depending on your onion), was a bipartisan action. The news is leading with the notion that the republicans killed it, but 90+ democrats voted against the bailout as well. A true sign to me that the 2010 election is already on their minds.
Much to my chagrin, I expect a bail out package will eventually go through. Just enough compromise will be done so that House reps will be able to go back to their electorate and say, “yeah it sucks, but…”
This won’t be a popular opinion, but my take on this whole mess is to let it burn. People loosing their houses… let it burn. Lenders closing, credit markets drying up… let it burn. Dow down 800… let it fucking burn. There has to be losers in capitalism. There has to be the threat of recession. There has to be that threat of disaster to keep free markets honest.
Padding the blow through government intervention will only lead us down the road to Communist China or Nazi Germany. Government control over the economy has never worked, will never work, and only dulls the ability of Americans to prosper from their own hard work.
I know it’s a rough day, and a lot of you are pretty frazzeled, but I’m enjoying it. I think I might even make s’mores.
Mortgage Chili:
Both Fannie Mae and Freddie Mac were re-nationalized already on Sept 7 2008, and placed under FHFA conservatorship. IMO, they were never fully privatized – functioning only since 1968 as “Government Sponsored Enterprises” (GSE’s). Which was essentially an accounting gimmick allowing to remove them from federal budget balance sheet, but with implicit backing of federal budget. Not much capitalism here.
In regards to many views, expressed here and elsewhere, about market “regulation”, “over-regulation”, and “lack of regulation”:
While everybody has differing, sometimes polarizing opinions on the subject (some quite “fundamental in nature”), I am far from labeling such views as “capitalistic” or “socialistic”. For any market to function, there must a set of agreed rules and body imposing them. Like, for example, monetary system, or stock exchange. The minimalist approach and ‘pure’ capitalism with fully free market, as described and advocated by Adam Smith is basically Utopian in nature. Only 19th century America came close to it. Today’s world practices “mixed economy”. Even if one would like to go back in time, most likely it would prove to be impossible politically. Imagine repelling labor laws, minimum wage, social security etc. without committing political suicide.
So to go back to general issue of “too much or too little market regulation” – IMHO there are only two types : good and bad. Good ones are the ones that keep economy humming w/o excessive overheating or repeating bubble-and-bust cycles. Which ones we currently have – we all know. I think we have a great multiplicity and fragmentation of various regulatory bodies and laws causing the occasional chocking points and economic havoc. The system requires some overhaul, but who’s ready to take a bite at it?
MJ – First kudos, for the Adam Smith reference. Second, i love this blogging platform, though I am sure I bring down the average IQ. LOL [Is that something google tracks?]
Dave, real people will be even worse off when they do pass this. Today is definitely a day for celebration, even if it is short lived.