September 18, 2008
The Nationalization of America
"It's a Republic. If you can keep it." I can't say with any certainty what Benjamin Franklin had in mind when he uttered that phrase, but the answer to the question "if" is fairly clear.
In the cacophony of punditry, both professional and armature, surrounding the mortgage industry collapse the focus seems to be on if/who to bail out and who caused the problem. Little seems to said and written about how much of the financial sector has just been nationalized by the federal government.
Bear Stearns. Fannie Mae. Freddie Mac. AIG. All were deemed to be too big to fail. Meaning that their connections to, control of, and influence over the markets were so large that the impact of their failure could be devastating.
All of that is now under the direct control and even ownership of the Federal Government. The crisis brought about by government mandated sub-prime loans has been a handy excuse for the nationalization of a large portion of the financial sector.
On the campaing trail the candidates talk about needing to reform Wall Street. If the pace of nationalization keeps up, Wall Street will cease to matter. It will all be Pennsylvania Avenue.
In the cacophony of punditry, both professional and armature, surrounding the mortgage industry collapse the focus seems to be on if/who to bail out and who caused the problem. Little seems to said and written about how much of the financial sector has just been nationalized by the federal government.
Bear Stearns. Fannie Mae. Freddie Mac. AIG. All were deemed to be too big to fail. Meaning that their connections to, control of, and influence over the markets were so large that the impact of their failure could be devastating.
All of that is now under the direct control and even ownership of the Federal Government. The crisis brought about by government mandated sub-prime loans has been a handy excuse for the nationalization of a large portion of the financial sector.
On the campaing trail the candidates talk about needing to reform Wall Street. If the pace of nationalization keeps up, Wall Street will cease to matter. It will all be Pennsylvania Avenue.
Posted by: Stephen Macklin at 05:16 PM | Comments (4) | Add Comment
1
I was wondering if anyone was as concerned about the nationalization of large portions of the private sector. I'm not into conspiracy theories but this has all the earmarks of an agenda being followed step by step leading to the final loss of all private ownership.
Posted by: T F Stern at September 18, 2008 08:44 PM (Ruh11)
2
T F
I have a number of friends who inhabit the outer fringes of the libertarian political spectrum who no doubt see the conspiracy you hint at. I think there is a line somewhere on that spectrum where you begin to believe that things like this are done as purposeful goal directed activity. I haven't quite crossed that line yet.
I see this as more the consequence of a series of decisions each made for their own varoius (mostly) well intentioned reasons.
I don't think that then when the Clinton administration pushed lenders into making sub-prime mortgages that nationalization of financial markets by a future administration was the goal.
I don't even think that the Fed buying 80% of AIG and nationalizing the world's largest insurance company was the goal. I think what we're seeing is a series of applications of the law of unintended consequences that probably got their start with the New Deal.
Each action taken to deal with the unintended consequences of the previous action creates another set of consequences necessitating another decision ad infinitum.
I have a number of friends who inhabit the outer fringes of the libertarian political spectrum who no doubt see the conspiracy you hint at. I think there is a line somewhere on that spectrum where you begin to believe that things like this are done as purposeful goal directed activity. I haven't quite crossed that line yet.
I see this as more the consequence of a series of decisions each made for their own varoius (mostly) well intentioned reasons.
I don't think that then when the Clinton administration pushed lenders into making sub-prime mortgages that nationalization of financial markets by a future administration was the goal.
I don't even think that the Fed buying 80% of AIG and nationalizing the world's largest insurance company was the goal. I think what we're seeing is a series of applications of the law of unintended consequences that probably got their start with the New Deal.
Each action taken to deal with the unintended consequences of the previous action creates another set of consequences necessitating another decision ad infinitum.
Posted by: Stephen Macklin at September 18, 2008 10:10 PM (R7LgM)
3
Do you believe that the Clintons are not communists?
Posted by: Wayne at September 22, 2008 10:13 AM (Xrany)
4
I believe the Clintons are opportunistic socialists. To the extent that
there was any plotting involved on their part, I believe it was to have
an issue she could campaign with.
However, when the whole thing started going south and the minorities whose votes they were buying started being foreclosed they wisely chose not use that part of the Clinton legacy in her campaign.
However, when the whole thing started going south and the minorities whose votes they were buying started being foreclosed they wisely chose not use that part of the Clinton legacy in her campaign.
Posted by: Stephen Macklin at September 22, 2008 10:47 AM (UquFN)
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