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| The New Welfare Cheats
Posted: 4/3/2008 8:49:49 AM | Regarding the recent decision by Ben Bernake to have The Federal Reserve back the bail out of Bear Stearns in the buy out by JP Morgan Chase.
The Street on Welfare
By E. J. Dionne Jr.
Washington Post Tuesday, March 18, 2008; Page A19
Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy.
The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and from the deregulatory regime for which they lobbied so hard. They have lost "confidence" in each other, you see, because none of these oh-so-wise captains of the universe have any idea what kinds of devalued securities sit in one another's portfolios.
So they have stopped investing. The biggest, most respected investment firms threaten to come crashing down. You can't have that. It's just fine to make it harder for the average Joe to file for bankruptcy, as did that wretched bankruptcy bill passed by Congress in 2005 at the request of the credit card industry. But the big guys are "too big to fail," because they could bring us all down with them.
Enter the federal government, the institution to which the wealthy are not supposed to pay capital gains or inheritance taxes. Good God, you don't expect these people to trade in their BMWs for Saturns, do you?
In a deal that the New York Times described as "shocking," J.P. Morgan Chase agreed over the weekend to pay $2 a share to buy all of Bear Stearns, one of the brand names of finance capitalism. The Federal Reserve approved a $30 billion -- that's with a "b" -- line of credit to make the deal work.
I don't fault Ben Bernanke, the Fed chairman, for being so interventionist in trying to save the economy. On the contrary, Bernanke deserves credit for ignoring all the extreme free-market bloviation. He doesn't want the economy to collapse on his watch, so he is willing to violate all the conservatives' shibboleths about the dangers of government intervention. As a voter once told the legendary political journalist Richard Rovere: "Sometimes you have to forget your principles to do what's right."
But if this near meltdown of capitalism doesn't encourage a lot of people to question the principles they have carried in their heads for the past three decades or so, nothing will.
We had already learned the hard way -- in the crash of 1929 and the Depression that followed -- that capitalism is quite capable of running off the rails. Franklin Roosevelt's New Deal was a response to the failure of the geniuses of finance (and their defenders in the economics profession) to realize what was happening or to fix it in time.
As the economist John Kenneth Galbraith noted of the era leading up to the Depression, "The threat to men of great dignity, privilege and pretense is not from the radicals they revile; it is from accepting their own myth. Exposure to reality remains the nemesis of the great -- a little understood thing."
But in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument -- when it works. But the free market is just that: an instrument, not a principle.
In 1996, back when he was a Republican senator from Maine, William Cohen told me: "We have been saying for so long that government is the enemy. Government is the enemy until you need a friend."
So now the bailouts begin, and Wall Street usefully might feel a bit of gratitude, perhaps by being willing to have the wealthy foot some of the bill or to acknowledge that while its denizens were getting rich, a lot of Americans were losing jobs and health insurance. I'm waiting.
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/17/
remove break AR2008031702154.html?hpid=opinionsbox1
I guess I'm not exactly understanding the intricacies in this buy-out scheme, and how the Fed's loan garauntees end up being passed onto the American taxpayer. If anyone might care to comment and explain how the loan and buy-out structure ends up becoming public debt, I would certainly appreciate the insights.
darjy | |
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| The New Welfare Cheats
Posted: 4/3/2008 9:23:45 AM | I heard a program on this on NPR and heard there were $10 billion in bonuses given to Bear Stearns execs, knowing the company was headed downhill.
They took their golden parachutes and left the taxpayers with the burning plane.
The ought to be prosecuted, in my opinion. | |
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| The New Welfare Cheats
Posted: 4/3/2008 9:27:43 AM |
Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy.
The Wall Street titans have turned into a bunch of welfare clients.
..and if the bailout truly bothers you, as it should, we true capitalists welcome you to our ranks. I think it stinks. This coming from a mortgage broker - Bear Stearns should have been allowed to fail, and the market should be allowed to correct itself without intervention. | |
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| The New Welfare Cheats
Posted: 4/3/2008 2:04:06 PM |
Bear Stearns should have been allowed to fail, and the market should be allowed to correct itself without intervention.
The problem with this is that only the "big money" investors (the secured creditors) would stand any hope of recouping any reasonable portion of the money they have tied up with this firm if it was simply "allowed to fail".
The "joe average" investors, who don't have the necessary leverage to be secured creditors, would be the only ones to truly loose in the deal.
If bankruptcy laws were rewritten to allow ALL investors, both "big money" secured and "joe average" unsecured, to recoup equally from any remaining funds then it might be a workable idea. | |
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| The New Welfare Cheats
Posted: 4/3/2008 4:15:03 PM | I think I heard the same program this morning Steven02151 ... as such, it was the inspiration or angst ridden fuel for this thread.
@oddandy
First off, yes it does truly, bother me, and we are in complete agreement that it shouldn't have happened. I also do not believe that any bailout nor relief should be given to home owners caught in the mortgage squeeze, and that the overinflated pricing within the housing market must also be allowed to correct itself, as draconian as that may seem.
I realize that most folks will NOT agree with that as it would mean that the over inflated equity in their own homes would decrease in value as well.
Second, I will thank you for the polite tone of your post and the kind invitation to join your ranks, but I have ideologically become quite embittered toward capitalism as an organizational principal of free governance, or as the preferred method of establishing value or making economic distribution. I no longer adhere to its foundational principals, and now challenge its underlying assumptions.
One notion that the free marketers frequently cite, is that within free markets the best products and ideas, like cream, rise to the top.
My response, is unfortunately no, it is not usually the BEST products or ideas, but merely the onees that generate the most PROFIT that rise within a market derived system. I think that does have a role to play, but lets not fool ourselves about what is really being supplied, accomplished, or done.
One other foundational priciple of capitalism is that price determines value ... hence that which does not generate considerable amounts of money is of intrinsically little value. Personally I think kindness and politeness are more socially beneficial than large sums of money being held by too few hands, but most of society doesn't see it that way and those attributes are therefore seriously degraded and devalued within the culture at large.
I could go on, but I do not wish to repay YOUR kindness and polite tone by boring you with my ideas of things that you are most likely in ideologic opposition to.
Anyway
Best Regards | |
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| The New Welfare Cheats
Posted: 4/3/2008 6:57:32 PM | | Look at almost any car manufacturer....Ford got a big bail out recently too. Corporate welfare runs rampant on both sides of the border. | |
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| The New Welfare Cheats
Posted: 4/3/2008 9:58:12 PM | Terry Gross interviewed Law Professor Michael Greenberger on her National Public Radio program "Fresh Air" today (April 3rd) on this very topic - maybe the show Steven (msg 2) listened to. He manages to explain the mess in fairly simple terms using analogies we all understand. You can listen to the in-depth interview (which is 39 minutes 8 seconds long) on NPR .org:
http://www.npr.org/templates/story/story.php?storyId=89338743
The situation is scandalous!  | |
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| The New Welfare Cheats
Posted: 4/3/2008 9:58:45 PM | I just love going to work everyday and knowing I am supporting this cow crap. | |
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| The New Welfare Cheats
Posted: 4/3/2008 10:15:33 PM |
They took their golden parachutes and left the taxpayers with the burning plane.
The ought to be prosecuted, in my opinion
And many conservatives like myself would agree to that also. If they did something criminal, prosecute and if convicted take away all their belongings.
and if the bailout truly bothers you, as it should, we true capitalists welcome you to our ranks. I think it stinks. This coming from a mortgage broker - Bear Stearns should have been allowed to fail, and the market should be allowed to correct itself without intervention
The market runs wild and if people want to speculate and lose their shirts, that is their problem, not the taxpayers. Government is not there to provide a safety net or blankie for the people. The only things government should be doing to protect us is prevent foreign powers from killing us or taking over our country. Everything else is just a power play or a corrupt deal. | |
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| The New Welfare Cheats
Posted: 4/3/2008 10:17:55 PM | You know what irks me the most? Seven years ago, I took some major hits in the market. No one has offered to help me out. Today, even though my home is paid off, I struggle. I can't sell it for anything because of all the people willing to take money to the table just to save their credit and get out of their homes, and I do without some things I actually need to pay the taxes and association fees. I'm still waiting for someone to offer a buyout so I can move to something smaller and more affordable. And despite the fact I write some pretty big checks to the IRS, I don't even get the $300-$600 kickback because I don't actually earn wages.
If anyone can figure out how I can get a few wheels of cheese and five gallon cans of peanut butter from the government, I wish you would let me know. | |
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| The New Welfare Cheats
Posted: 4/4/2008 7:21:17 AM | Giving money to people who are already rich is ALWAYS a great idea.
Giving it to the poor and disadvantaged is the beginning of the end of civilization as we know it. 
The USA spends far more in "wealthfare" , than it ever has in welfare. 
Just look at the "estate tax" , and what it will cost American taxpayers over the next decade.
Reality: Repealing the estate tax would add trillions of dollars to future deficits.
Permanent repeal of the estate tax would cost more than $1 trillion over the first ten
years in which its cost would be fully felt, 2012-2021. This cost includes $859 billion
in lost revenue and $251 billion in increased interest payments on the national debt.
(The official ten-year cost estimate is much lower: $499 billion. But that estimate is
misleading because it covers an earlier ten-year period, 2008-2017, that captures the
full cost of only six years of extending repeal.) (http://www.cbpp.org/6-5-06tax.htm)
http://www.cbpp.org/estatetaxmyths.pdf
Just add up the above bail out, add on an increased level of military spending that's the highest since WW2 , also add on the cost of this war, and then throw things like the estate tax's impact into the mix.
Plus all the other current "wealthfare" costs....
Just the war, those increased costs for military projects, and the estate tax will easily exceed three TRILLION dollars in the next ten years.
Meanwhile, America spends $175 billion per year on corporate welfare. Much of it takes the form of tax breaks – slashing the tax bills of successful companies by billions:
Corporate tax welfare 1996-2000 (US$ billions)
• Microsoft: 12
• General Electric: 12
• Ford: 9.1
• Worldcom: 5.3
• IBM: 4.7
• General Motors: 3.6
• Enron: 1
(Source: Citizens for Tax Justice)
Corporate dole is also used to bail out business failures. Examples include: (in Britain) the £46 billion of public money required to clean up the nuclear industry; (in America) the $15 billion bailout of airlines and the Savings and Loan scandal which is likely to cost US taxpayers over $1 trillion. According to Gore Vidal, the ongoing S&L bailout will cost more than the whole of US spending on social welfare from 1789 to the present. (Source: Vidal, On the State of the Union, 1994.)
http://www.mediahell.org/costofthings.htm
If you owe a thousand dollars to a bank, you are in trouble.
If you owe a billion, THEY are in trouble.  | |
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| The New Welfare Cheats
Posted: 4/5/2008 8:32:18 AM | As always Monty ... a very insightful and cogent post ... and very much appreciated the apt 'WealthFare' naming convention.
Regarding the efforts to do away with the estate tax leads back to questioning some of the underlying assumptions of unfettered capitalism and the actual and true effects of engendering dynastic generational wealth. The free marketeers always frame this issue solely as one that penalizes small business and family farms while conveniently leaving out the social effects of maintaining the dynastic fortunes of folks that really have no part in the creation of anything of actual value from their arguments.
The study of economics and money, are definitely not my strong suit, and I am quite frankly perplexed by much of the theoretic basis of monetary policy, as well as the more esoteric language of options as financial derivatives ... but I do intuit a bad deal when I see one.
Seems to me that the American economy is now more a vampire chimera of outrageous proportion that feeds from the actual productive labor of workers everywhere regardless national borders. Witness the developments within the energy sector over the past eight years, the energy analysts will fervently point to the traditional market forces of supply and demand to account for the steep rise in price and misery for consumers, but discount the effect of unregulated trading in oil futures by folks with huge wads of cash ... who literally siphon profit off the shared misery of society as a whole. The speculative investor produces nothing, contributes nothing, but reaps huge dividends and rewards by virtue of having large sums of cash ... other folks would say 'risking' his cash ... but when his profits are virtually guaranteed by leveraging the market prices ... and while any losses are virtually 'insured' by 'writing off' his tax liability ... how much risk is really involved in such a bet.
Seems to me that while Enron's book keeping measures are being studiously and carefully avoided, their business model envisioned in the great 2000 California electric grid experiment, has become fabulously successful and the de facto standard template of the energy sector ... artfully limit the supply side and set a 'pay through the nose' price, due the 'increase' in demand. And again the questions begs the traditional concept of any capital asset actually being subjected to risk. Yet folks seem to willingly embrace the idea that capital investment must always be sufficiently rewarded regardless the economies of scale, unyielding static demand, or the lack of any true risk involved.
Wait until this business model is enacted on another commodity that is also integral to basic human survival ... the privatization (and one assumes the withholding) of water resources ... coming to your locality soon.
Caw | |
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| The New Welfare Cheats
Posted: 4/5/2008 10:17:46 AM | I don't understand anything about money, investing it I'm a real dumbass when it comes to most things in life I never made much money and my biggest investment was beer it's all I really cared about for many years....And now that I'm older and my health isn't as great as it was at one time it's all water under the bridge..I know one thing though once a week I collect bread from a local food bank that's gets thrown out over the weekend and I give it away, yeasterday it was slim pickins usually I get a couple hundred pounds but yeasterday maybe 10-15 loafs it's the recession there's not even enough food to feed the poor..And those rich people that want others to bail them out. I would not worry about them collecting much. Our world is so ****ed up I would not doubt one bit if a bunch of hungry poor people were to start kidnapping these **stards and basterettes and start eating them..After all it doesn't hurt you...Remember the movie "Alive"? As for me I'm on a diet..I got so much fat I could probley live a couple years...WoodChipper Soup.. Even if it didn't happen it's a nice fantasy. | |
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| The New Welfare Cheats
Posted: 4/6/2008 8:02:06 AM | By Jaroslaw Anders
Staff Writer
Washington — The United States is the single largest donor of foreign economic aid, but, unlike many other developed nations, Americans prefer to donate their money through the private sector, according to a new report published by a Washington research organization.
Of the $122.8 billion of foreign aid provided by Americans in 2005 (the most current data available), $95.5 billion, or 79 percent, came from private foundations, corporations, voluntary organizations, universities, religious organizations and individuals, says the annual Index of Global Philanthropy.
For Montreal Guy^^^^^
Oh yeah,by the way,here in the States we even have a well known mfr of feminine personal hygiene products that solicits us everyday to buy their stuff so they can donate product that allows women in foreign countries to be able to attend school during their periods.Beat that!!!!
My tax dollar feeds the world and clothes the world and a myriad of other things,all for other folks.My personal dollar may just do the same thing.Nice thing down here....my money should be mine and I get to do with it as I please.It is no ones business what I do with it,charitable or not.Well,most of the time anyway...we have bullshit entitlements here that just seem to find a life of their own.
Remember that the above is foreign aid and shows no reflection of what is used to deal with our own problems and charities.Or the money we have spent aiding areas in the world after natural disaster. | |
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| The New Welfare Cheats
Posted: 4/6/2008 8:29:23 AM | LOL!
It's such an evil "catch22" isn't it? If the government bails them out we the people,(taxpayers) get stuck sitting at that expensive luncheon table staring at the check. However, if we don't bail these captains,(er uh clowns) of finance out the whole economy suffers and we suffer along with it. I'd say let's start a congressional sub commitee hearing to have some of the financial executives investigated but you know Congress doesn't work for free and in the end we'd foot the bill for that too. | |
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| The New Welfare Cheats
Posted: 4/6/2008 8:44:01 AM |
Remember that the above is foreign aid and shows no reflection of what is used to deal with our own problems and charities.Or the money we have spent aiding areas in the world after natural disaster.
That's a pittance compared to the "wealthfare" endowments to the aristocracy, and corporations. The CEO's from those same corporations can then stand up in front og their board of directors....and justify that nice little increase for his good management. 
And then shelter away the money.....
America's received foreign aid as well, it goes both ways.
LONDON - Impoverished Bangladesh, where millions live on a monsoon- and flood-prone delta, pledged $1 million and offered rescuers. Thailand, recalling U.S. aid after last year's tsunami, offered to send 60 doctors and nurses as well as rice as a "gesture from the heart."
They are among more than 90 countries, rich and poor, proposing assistance to victims of Hurricane Katrina, with Kuwait, Qatar and the United Arab Emirates contributing "very large cash" donations, the State Department said Tuesday.
http://www.msnbc.msn.com/id/9231819/
That list of countries included my own.
No one here was sitting here saying "Hey, it's the best country in the world, and really rich, so WHY are WE giving them Canadian tax dollars ? "
We simply saw people in need, and said ..... "Do it."  I don't remember ONE Canadian saying it was a bad idea to do that.
It was the same after 9/11 when people from all over the world donated private funds to help it's victims. That's how it should be. | |
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| The New Welfare Cheats
Posted: 4/6/2008 9:15:42 AM | Some posts -
One notion that the free marketers frequently cite, is that within free markets the best products and ideas, like cream, rise to the top.
They would if it were truely a free market. Large corporations pay lobbyists to get laws passed which make it hard (if not close to impossible) for mom and pop shops to open and stay in business with enough profit to live on. Then they move out of the country to places where they don't have to pay taxes to fund our system or follow laws we passed to regulate harm from manufacturing (everything from child labor to OSHA laws are bypassed). Then, when they fail, they are allowed to hide behind the curtain of incorporation (the board/investors made us do it), where a very few skim the money and run.
Why can't the board of a corporation be made to face consequences, just as an owner of a private company would have to? If you bankrupt the compay, you loose everything you own in order to pay the money back, starting from the workers up.
Corporate tax welfare 1996-2000 (US$ billions)
• Microsoft: 12
• General Electric: 12
• Ford: 9.1
• Worldcom: 5.3
• IBM: 4.7
• General Motors: 3.6
• Enron: 1
Weathfare (LOVE that term, thank you!) for the richest man on the planet? For the board who took everything and got away with it?
This will only stop when the few at the top know they will (like the rest of us would) loose it all.
If us regular joes borrow to buy a house, car, furs, etc, then couldn't pay the bills - they take back the car, house, etc. Right?
Why not the C club in a corporation? Why not the people on the board?
Oh yeah...our illustrious president ran two companies into the ground, his daddy got rich friends to buy the companies for MORE than they were worth, and then we gave him a country. Twice.
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| The New Welfare Cheats
Posted: 4/6/2008 9:36:06 AM | .
Of the $122.8 billion of foreign aid provided by Americans in 2005 (the most current data available), $95.5 billion, or 79 percent, came from private foundations, corporations, voluntary organizations, universities, religious organizations and individuals, says the annual Index of Global Philanthropy.
==================================
These generous donations are tax deductions from income.....
Many of those Billions of charity go to "CHURCHES' that are growing worldwide Television networks.....
maybe to be sold someday for commercial use........ worth a lot of tax free $$$$$
Pat Robertson .......... | |
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| The New Welfare Cheats
Posted: 4/7/2008 8:40:30 AM | while bush wasnt a great president, at least so far, he was a big improvement over a lying cheating felon who sold our technology to the chinese to the extent that their subs could surface undetected next to our carriers. You are only alive today because the red chinese let you be alive, they now have the icbm technology to destroy you, courtesy the clintons. and he let our country wide open to terrorist attack due to having to ruin the fbi and cia so they wouldnt find out the treasonous dirty tricks they played to get campaign cash.
that said, the crooks who were part of the mortgage mess should be jailed, from bank presidents to low life lying scheming mortgage agents. we taxpayers should not foot the bill. | |
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| The New Welfare Cheats
Posted: 4/7/2008 9:04:38 AM | The main problem was people on welfare or low income being approved for loans.
Loans they had no business approving.
I am sure there will be prosecutions of these lenders and the ones who stole millions while the company was sinking. | |
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| The New Welfare Cheats
Posted: 4/7/2008 1:29:53 PM |
The main problem was people on welfare or low income being approved for loans.
Loans they had no business approving.
^^^ Just a minute here, buddy! All low income people are NOT deadbeats! And sometimes lenders do the right thing to approve the presumably unapprovable loans to take a chance on improving the standards of the community they supposedly serve! It's the greedy b*stards who cared ONLY about making a quick buck with no responsibility for the community consequences who need to be prosecuted! Take your cockroach payday loan outfits who set up shop and happily suck the blood out of poor communities; and the credit-card companies who penalize struggling borrowers despite good payment histories with their own companies - they LEGALLY get away with this when the poor suckers get behind in payment with OTHER NONAFFILIATED companies! Now tell me, why is THAT legal??? Those laws MUST BE CHANGED and something tells me the current party in power will NOT be doing it!!!
I am sure there will be prosecutions of these lenders and the ones who stole millions while the company was sinking. I can only HOPE the dirtballs in this crisis will be prosecuted. But I won't be holding my breath...
In my own case I was seriously low-income, low enough to qualify for a no-down-payment loan through a Community Lending Program at a local bank some fourteen years ago. The reason those loan programs exist was that banks discriminated against all kinds of folks in mortgage lending practices. They were "penalized" by the federal government by being required to establish such programs that helped the very populations who were discriminated against in the past (single moms, people of color, etc). I was recovering from a divorce that I didn't want because my husband left me and my son to go out and find his "real true love" when he hit forty and the proverbial midlife crisis. Because I was dependent on his income and health insurance--I lived where HE wanted to live, while he built HIS successful career while I could only find 30-hour-a-week contract employment without benefits in HIS chosen rural town--I had to leave the area and start over from scratch!
I not only qualified for the mortgage due to my "new" poverty-level income in my post-divorce economic recovery, but because of my EXCELLENT clean credit! I bought a much smaller house than I was told that I could "qualify" for, due to my very cautious nature and rearing by depression-era parents! (I've been told I'm so tight my azz squeaks!) I've not only faithfully made my mortgage payments but paid off a lot ahead of time as my finances improved! And it's a good goddam thing, since now, unexpectedly, I'm living in poverty again due to disability! You can imagine what I think of socio-economic generalizations ... and the horse you conservative cowboys keep riding in here on! My little four-room castle is almost paid off, way ahead of time, and my credit is STILL squeaky clean! So there!
Two morals to my long-winded story:
1 - don't generalize about poor people who need a helping hand!
2 - Obama 2008!!! His sensitivity to those in need is an inspiration, despite all the conservative bashing of his angry minister's words! We all have responsibility to help ourselves but it is also a humane government's role to assist those who need it, rather than ONLY craft laws or block needed regulations to fit the agendas of the already-rich!
 OK, I'm done for now!!!  | |
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| The New Welfare Cheats
Posted: 4/7/2008 3:16:28 PM | I don't understand everything about this deal either but,the smell is unmistakable. One thing should be pointed out,though. The Federal Reserve is not actually federal.It is a privately held bank that was incorporated to take charge of America's financial system with the implementation of The Federal Reserve Act in the early 1900's,which is why the Fed didn't need congressional approval to make the deal,although Bernanke was called on the carpet to explain it.
"If the American people ever allow private banks to control the issue of their currency,first by inflation and then by deflation,the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered"
Thomas Jefferson | |
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| The New Welfare Cheats
Posted: 4/7/2008 4:10:43 PM | Don't know about the new welfare cheats. Honestly, I hang my head in shame with the way the model of capitalism has gone. We can blame it on the government, we can blame it on the Democrats/Republicans, we can blame it on corporations, etc. I think we all need to take a look inside, and the blame starts with each and every one of us. We've allowed ourselves to get so caught up in consumerism, we'll buy those goods at any price. We've allowed ourselves to sell our souls to Corporate America as employees, instead of selling our souls to our families to enjoy and reap the benefits.
I could go on, but I won't.
As far as bail outs. If the tax laws are going to be re-written for Corporate America for their losses; if the government is going to bail out the Bear Stearns and other corporations, they should do the same for Joe America. If not, then there should be no bail outs. It's either "all" or it's "nothing". I'd prefer "nothing", I think we all need to learn from our mistakes. If that means jail time; losing our homes; etc. then so be it. I really think we need to get back to the basics and back to simpler times. | |
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| The New Welfare Cheats
Posted: 4/7/2008 5:18:28 PM | i think tommy douglas said it best
we the mice hereby elected the cats to rule over us
so who are we to complain when they eat a few of us and put their own best interests ahead of ours?
which cat will you elect next time? clinton or obama,
a white cat or a black cat | |
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| The New Welfare Cheats
Posted: 4/7/2008 5:45:01 PM | It's misleading to claim that this actually has anything to do with capitalism in the first place.
With true capitalism Bear Stearns would have been allowed to falter or find its own way out of this mess. In the long run we'd all probably be better off for it.
Adam Smith organized his economic model in a way that reflected human nature. He more or less concluded that since people are going to be greedy , we might as well use their greed for the greater good. The more they succeed, the more tax money comes in. That's the idea anyway. If a company fails then we actually want them to. That way they can be replaced asap by a profitable enterprise that can be taxed.
With that said, sometimes it does still serve the public's interests to keep a company afloat through government handouts. For example, how many people were left jobless when WorldCom went belly up ? The key to bailing out a company is to get it to re-invent itself so that it does turn a profit. Tinkering with the stipulations of any corporate welfare scheme is perfectly reasonable of the public to ask for at this juncture. What we have to decide really, is whether or not it'll cost us more to let the company go belly-up or to bail out. If the answer is that it'll cost us more to let them make a beeline to oblivion then it's probably not a bad idea to give them some cash with conditions.
Does this case qualify ? I don't know but it's something to consider at least that corporate welfare isn't necessarily going to be outside of the scope of the public's best interest. | |
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