Monday, March 17, 2008

The dichotomy of a failing economy…

posted by Bill Arnett @ 2:28 PM Permalink

…is crystal clear. Our banks are failing, our economy is in the toilet, trillions of dollars of home equity has vanished to be followed by even greater losses to come, home foreclosures at record highs, so what does our government do?

Bail out the mega-wealthy with billions and billions of dollars borrowed from our now primary bankers, the Communist Chinese.

From the NYT:
Hoping to avoid a systemic meltdown in financial markets, the Federal Reserve on Sunday approved a $30 billion credit line to engineer the takeover of Bear Stearns and announced an open-ended lending program for the biggest investment firms on Wall Street.

In a third move aimed at helping banks and thrifts, the Fed also lowered the rate for borrowing from its so-called discount window by a quarter of a percentage point, to 3.25 percent.

The moves amounted to a sweeping and apparently unprecedented attempt by the Federal Reserve to rescue the nation’s financial markets from what officials feared could be a chain reaction of defaults.[…]

Affirming that “our financial institutions are strong and that our capital markets are functioning efficiently and effectively,” Mr. Bush added: “In the long run, our economy is going to be fine. Right now we’re dealing with a difficult situation.” [This takes the cake for the "Stupid Things said by Bush" tally. Bill][…]

Monetary policy experts said they were stunned by the sweeping nature of the Fed’s efforts, which they said were unprecedented in a host of different ways. But some were doubtful about whether the moves would solve the underlying problem of huge losses from bad lending practices.

“Emergency provision of loans is necessary but not sufficient,” said Lawrence H. Summers, who was a Treasury secretary under President Bill Clinton. “There is a fundamental issue, which is that the financial system is short of capital and is under pressure to contract.”
I certainly seems that a particular American conceit has led us down the proverbial primrose path, and that conceit is the no longer valid assumption that America is still the richest and most powerful country in the world.

Nope. We're the biggest debtor nation on the planet, our country is being sold right out from beneath us, the folly of bush's OIL Wars is breaking our military, and when it comes time to really pay the piper we will be unable to do so.

Were it not for our nuclear arsenal deterrent I think several other nations would have already attacked us and relegated our infant nation to oblivion.

So it should come as no surprise that the people who need financial help because of their own malfeasance and mismanagement, the bankers, will receive untold billions, possibly trillions, to safeguard their businesses while all the "little people" who need help can go starve as far as the Rethugs are concerned.

And is anyone else besides me thoroughly sick of hearing "how strong our economy and financial institutions" are?

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