Wall Street is having a full-on meltdown, the kind you see once in a hundred years. Merrill Lynch has been sold, Lehman Brothers has filed for one of the biggest bankruptcies in history. AIG is next, and other banks from Wachovia on down are having very serious problems. The Feds had to step in and take over Fannie Mae and Freedie Mac last week, Communist-style.All credit goes to joeatlarge for writing this post. If you appreciate his points, tell him so and read his blog Centerblue.org.
The root of all the evil going on right now is the housing market. People sold houses to each other for way too much money they could not afford, and then all these Wall Street companies sliced and diced these mortgages and sold them to each other while claiming everything was "safe."
While pushing for a less and less regulated environment, screaming the conservative philosophy that government had to stay out of their businesses so they could fully thrive, they invented and re-invented all kinds of financial hocus pocus and pretended they were actually contributing to the economy while paying themselves outrageous dividends.
Sooner or later the Ponzi scheme had to stop, and now that it has you hear a whole hell of a lot of screaming on Wall Street, but for something entirely different. Now the screaming is directed at the Fed and its taxpayer money, BEGGING and PLEADING and CRYING and GNASHING for a bailout, so that all those bonuses and six figure incomes and stock options and fancy yachts won't be relegated to the dustbin of history.
Therein lies the hypocrisy: the Republicans that infest Wall Street insist that the government keep its hands off their finance businesses during the good times.....but when times go bad, they come running and screaming behind Mommy Government's apron strings.
You can't have it both ways, sister. If you're going to push for unlimited freedom from regulation, then you HAVE to take the bitter medicine when all of your plans go awry instead of begging for a taxpayer bailout. Conversely, if you want to have a taxpayer bailout, then you're going to have to submit your business, especially one so essential to the economy, to reasonable government regulations that require telling the truth and being transparent.
After putting the taxpayer on the hook for potentially hundreds of billions of dollars in losses from toxic mortgages from Fannie, Freddie, and Bear Sterns--a cost similar to another Iraq war in magnitude--the Treasury finally came to its senses over the weekend and said enough was enough, letting Lehman Brothers slide into bankruptcy. Seeing the writing on the wall and that no White Knight would come to the rescue, Merrill Lynch slaughtered its bull mascot and sold itself to Bank of America at firesale prices. Meanwhile, Treasury sharpens its pencil as it prepares to draft a whole slew of regulations that the financial industry now has no choice but to accept.
"He who lives by the sword dies by the sword." Matthew 26:52. That's exactly the way it should be, and conservatives should stop caterwauling when they're forced to face the butt end of their "hands-off," "leave it entirely to the market" philosophy.
I love you, J!