DISQUS

No Name · 1 year ago

I think the point is irrelevant when discussing capitalism. Any govt performs social services and to some degree are socialist. The government at times provides beneficial services as int he public sector and for private sector. The government invest heavily in military and research that has lead to commercialization of technology. Think NASA space program as a government program designed to commercialize technology with transistors, mirco waves, and software. NIH and the war on cancer contributed to the biotechnology industry.

The govt with Freddie and Fannie has always implied a guarantee of underlying debt security with full faith of the US Govt. This was designed to ensure affordable loans by reducing risks inherent in issuance of loans. The GI Bill actually lead to the economic growth after WWII across nation by providing education and cheap home ownership. Nothing like having good citizens that own land to become even better constituents under the debt load and private property ownership.

The main difference generally between Republican and Socialist Democrats, Republicans believe business owners contribute more to the economic development of the nation than others' contribute. Republicans want less government involved in their pursuit of capital and profits: regulations and taxes. Republicans want all the benefits and want to share less of the burden due to their contribution under a free and level playing field.

But during times of crisis the government plays an important role for society in providing a stable system and investment for growth. The government is need in times of war and peace. And now, more than ever, the government is needed in times of financial crisis.

I don't think you would find a Republican refusing any assistance form the government that would ensure their family lively hood and retirement (401k). Capitalism can be too tough for the staunch Republicans values and fee market unbearable to stomach as capital disappears from their coffers.

Diesel McFadden · 1 year ago

Socialists? Hardly.



I'm assuming the rationale is that if it's the most obvious sweetest sweetest deal for the banks, the bank stocks will go rocket. Paulson bulletproofed 'em (we'll see in the long run). Right now, it looks like they got something more like debt (at 5%, behind current bondholders)-- no restrictions, no equity dilution, no dividend suspension, no change in management, no board seat, and a perfect credit score for the institution going forward. I'd say that's something for bankers to smile about.

The 15% warrants are a way the papers can report that the government gets "upside", when relatively speaking, it's marginal.

Compare to Warren Buffet's 10% preferred and 100% warrants, lockdown on executive share sales until they buy him out and of course, no 'full faith and credit' guarantee of all new debt going forward. But if the govt were too onerous, the good banks would complain and then it might cost paulson just as much to bail out the bad ones.

The idea that this was "forced" on banks for the good of the country is 95% theater.

Alex · 1 year ago

I liked the UK approach to this mess and if Paulson and Bush would had the balls to do what the UK did in less than a week, we would'nt have been reading this today but three weeks ago and yes we are all socialist at heart.

Michael Kassing · 1 year ago

I would think that being socialist for a year would not be too bad as long as the US received equity that they could later resell. The US could act as a really big institutional investor and rake it in Buffet style.

Michael Kassing
MarkTend.com (thinking about changing our name to MarkTend Bank and seeking a bailout)

Jeffrey McManus · 1 year ago

It's a myth that we've *ever* had "laissez-faire capitalism". Markets have always had rules, going back to ancient times. The only question is what the rules are and who enforces them.

BaxterJ · 1 year ago

We already have a lot of socialist policies and socialist allies; what's the big deal?
http://www.entertonement.com/collections/4696/H...

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