Tuesday, July 15, 2008

Socialized Capitalism.

The big story here in California (other than the wildfires) is the failure of Indymac Bank, the largest savings and loan in the L.A area and the 7th largets mortgage originator in the US.
The collapse of Indymac is the second largest banking failure in American history!

It is really odd to see huge lines of people waiting for hours to retrieve their money - it just looks like something coming straight from the 1930s.

On NBC Evening News last night:
"Luckily, most Americans don't know much more about bank failures than we all learned from watching the Christmastime classic 'It's A Wonderful Life' with Jimmy Stewart. ... So when a big bank failed in California just a few days ago and, given some uneasy rumors about others, there are worries in this era of mortgage meltdowns that there could perhaps be more on the way."

"IndyMac is the bank which has failed. It's the second largest banking failure in American history. ... I just came from the stock exchange where the question isn't whether another bank will fail but which one and when."

The irony is that when things go well, conservatives wants the government off their backs, they want deregulation etc.... but then of course, when things go bad, they want the Treasury and Congress to act. In other words, as in the case of Fannie Mae and Freddie Mac, profits are privatized and losses are socialized, which basically means the taxpayer will pick up the tab.
And in the meantime McCain's central economic plan is to extend the Bush tax cuts, pile other tax breaks and revenue reductions!


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