It looks obvious

Well if we are bailing out bankers and car manufactures why not bail out another company? for example this one, his arguments are not much worse than those who got the money…

I wonder what is the social justice of saving Mr. Ramirez from loosing “his” house:

Despite making only $14,000 a year, strawberry picker Alberto Ramirez managed to buy his own slice of the American Dream. But his Hollister home came with a hefty price tag - $720,000.

And I would really wonder why making me, that earn more than Mr. Ramirez but didn’t dare buying such an expensive house need to pay for the bailout? The fact is that with the burden on the middle class increasing to save irresponsible borrowing, and borrowers, we are increasing the circle of people that might loose their homes, that doesn’t seems social justice to me - not at all.

Short, and right on the money:

That’s how much Paulson’s plan might cost. That’s a lot of zeros. But, hey, no one said socialism was cheap, did they?

It is sad to see how the promise of individual liberty and freedom being destroyed, not because it failed but because it was poorly represented.

Recently the voices that calling for tighter control of the government on the market are much louder than usual. The crashing of investment banks and the threat of spreading the credit crisis into a full recession, along with massive tax money given as bailout to failing business, are among the reasons for such calls. But while many rushing to blame the risks of the free market, and the unreasonable greedy private sector, as a main reason to more government oversight - they are forgetting that the government had a major role in creating the credit crisis:

Eager to put more low-income and minority families into their own homes, the agency required that two government-chartered mortgage finance firms purchase far more “affordable” loans made to these borrowers. HUD stuck with an outdated policy that allowed Freddie Mac and Fannie Mae to count billions of dollars they invested in subprime loans as a public good that would foster affordable housing.

[...]

The agency neglected to examine whether borrowers could make the payments on the loans that Freddie and Fannie classified as affordable. From 2004 to 2006, the two purchased $434 billion in securities backed by subprime loans, creating a market for more such lending. Subprime loans are targeted toward borrowers with poor credit, and they generally carry higher interest rates than conventional loans.

[...]

In 1995, President Bill Clinton’s HUD agreed to let Fannie and Freddie get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. The idea was that subprime lending benefited many borrowers who did not qualify for conventional loans. HUD expected that Freddie and Fannie would impose their high lending standards on subprime lenders.

So maybe instead of increasing government oversight we should do the opposite and simply reduce it?

Last month I learned that we are all Georgians now dragged into another stupid conflict without any clear understanding of the region, the forces and the consequences. Now I’m reading that I’m to be blamed in the credit and real estate crisis:

Liberals are blaming the banks, and conservatives the government, for the push into no money down housing purchases. But the fact is, we’re all at fault. Everyone in the country–buyers, sellers, financial advisors, bankers, regulators–became convinced that owning a home was a surefire ticket to wealth, and that therefore everyone could and should buy one. Now we’re surprised that we’ve gotten into exactly the same trouble as everyone else who thinks they’ve got a way to make money without working.

I’m sorry to disappoint those who are seeking to create false solidarity here - it isn’t my fault and taking my money to bailout people who made irresponsible decision is immoral. I took responsible loan I bought a smaller house than I would have wished too so it will be in my calculated budget, the only reason I’m being included in this mess is by making it harder on me to pay my own mortgage while saving other people - mostly bankers who were blinded by greed.

You might argue that providing safety net to those who cannot afford the house they bought and that saving the banking system is crucial for the economy. I would disagree with this argument but I think it is a valid one; however arguing that we are, all of us, in fault - and as a result should morally responsible to pay for the recovery effort - is plain simple wrong.

The american cars industry problem didn’t start from the rising oil price, they started because the auto makers are less competitive than their rivals - mostly the corporations based in Japan. In order to sell more cars, and increase their profit, the auto makers need to become more competitive by selling better cars for less money. This is obviously easier said than done, but it happened in the past and if the car manufactures can’t do it again they should disappear. One sure way for not helping is by handing them money they didn’t earn:

Presumed Democratic Presidential candidate Barack Obama told the UAW in a letter that he supports the $4B in federal aid, stating that he would “provide real solutions necessary to help this industry compete and win in the global economy.”

I don’t really think that Obama, or any other candidate, misunderstanding this basic economic. But what we see here isn’t economic rather than a bribe, and the question of the long term effect is only measured as far as November 2008. 

(via the club of growth)

It was obvious from the beginning that the massive banks bailout, with the deceiving name American Housing Rescue and Foreclosure Prevention Act, has very little to do with protecting the interests of the American taxpayers. Trying to hide the true purpose of the bill, bailing out banks that lost billions of dollars in idiotic investments, as trying to prevent poor people from loosing homes they should could not afford buying - all with tax money of those who otherwise might have been able to get better mortgage.

But even I didn’t realize the level of Chutzpa of “public servants” that lost all shame:

Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s “V.I.P.” program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.

Or in other words: Senator Dodd, the chairman of the banking committee that pushing the bailout act received preferred loans from one of the banks that will be most benefited from the proposed bailout. Sweet loans  indeed - It is a simple investment for the bank (with very promising return on investment), and the Senators will return the favor with my money.

Simply disgusting!

My position on the bear-streans bailout was, and still is, that it was simple case of robbery. Having the taxpayers fund, directly and indirectly, welfare programs for banks, airlines companies, pharmaceutical companies or any other corporation doesn’t change the fact that this is improper use of the public trust. The only support a company should seek is the support of trusting investors and satisfied customers.

And the results of corporate welfare and bailout policies aren’t improve economics but rather:

I have very little patient to conspiracy theories, so I will not start a discussion about the possible relations between the fact that the chairman and CEO of JP Morgan is a member of the board of directors of the Federal Reserve and the bailout that made the deal of purchasing Bear Stearns much less risky. The decision is immoral even if it was done without any involvement of JP Morgan:

Presenting this as a necessity, for the public general good and using the fear of recession, doesn’t change the fact that the proper name for this bailout is theft. Few months ago this was a funny sketch, today it is a reality and not the funny kind.