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Sunday, July 27, 2008 

If The Free Market System Works So Bloody Well - Why Does The Private Sector Always Seem To Need Billions Of Tax Dollars To Bail The Bastards Out?

I take a lot of heat on my blog from some fairly extreme right wing voices who denounce 'socialism' and praise "private enterprise and personal initiative." However, it seems that none of the right wing bloggers ever acknowledge that their precious unfettered 'free market system' seems to survive on the backs of average working taxpayers who constantly find themselves bailing out big business. David Lewis called them 'corporate welfare bums'! And yet, those of us on the left are constantly attacked by the mindless ideologues of the Right .... I still can't determine if they are dishonest or just stupid?

So here we go again. In a desperate attempt to keep hundreds of thousands of families from foreclosure in the mortgage meltdown south of the border, the US government is making billions of tax dollars available to bail out irresponsible companies.

"The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies. [...] The Federal Housing Administration, (FHA) could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan.

Billions in bailout tax money for Fanny Mae and Freddy Mac .... (so much for the 'unfettered free market') ...

There is no such thing as free market capitalism, never was, never will be. The system is based upon the state privileging certain interests through corporate law, banking regulations, patent law, imminent domain, gifts of land, cheap loans and the ever present "just-us" system. Capitalism is essentially the state socialism of the rich and its supporters and apologists are fools or hypocrites. Take away all the state support and capitalism would melt away in a week.

They should give any and all relief to the people directly affected. Insanity to reward the crooks, isn't it? They should have to take responsibility for their actions, and pull up their own bootstraps. Isn't that the conservative way? (Always makes me laugh. Parasites is what they are.)

A really good diary on DKos yesterday, predatory lending.
The diary "title" that already was...

Great link Pale ... I enjoyed that!

Larry .... "Capitalism is essentially the state socialism of the rich and its supporters and apologists are fools or hypocrites" ... Bravo! That is the best I have ever heard it described! (Too bad bloggers like 'so called Liberal' John Murney can't figure it out!

I think that in a truly free market, companies that can't survive on their own wouldn't and in the end they either fail or get swallowed up by a competitor. That companies with poor business models wouldn't exist in the first place because it would be too risky for them to pull off stunts such as sub-prime mortgages. The problem with this is that truly free markets don't exist even when the government doesn't 'interfere'. Corporations looking to get an edge will interfere with or attempt to manipulate the market. And therefore, to balance that problem the government has to get involved.

Issues like bailouts have to occur because things have become so twisted by pro-corporate, pro-'so-called' free market governments that let companies influence government thinking and decision-making. This allows companies to pull off extremely risky stunts without the full risk knowing that the government will help them out. And because average citizens get dealt massive blows when the risks don't work out, from either the job losses or on the consumer end, the government has no choice to act in some fashion.

Corporate welfare is not true private enterprise. I don't support corporate welfare in the slightest. businesses should fail or succeed on their own merit.

It's what some would consider "socialism for the rich, capitalism for the poor"

Chomsky calls this form of capitalism (in which capitalism and state are actively empowering each other) "corporate state capitalism". Not a bad label, given the example mentioned.

The whole sub-prime credit/mortgage business is governed by greed and the desire to have a good financial statement for the quarterly report to shareholders and regulatory institutions.

Greed also comes into play because the more that's in circulation, the more the commissions and profits should be.

Deregulation and lax regulation are also to blame--particularly when the "hands-off" approach model
is Republican based.
-------------

The other greed is the corporate welfare sector. Why should an automotive giant be asking for money from the government? The purpose of automotive companies is to provide leadership and innovation in consumer choice to provide motorists and consumers(as well as investors and pension plans) and take the lead in giving the consumer innovative products.
Sadly the auto sector tends to follow the marketplace and the markektplace is often mistaken; see many SUVs on the road nowadays?

The auto big 3 should have been leading the marketplace to more meaningful vehicles such as hybrid or energy efficient vehicles.

But then, the big 3 automotive companies were so reluctant to install seat belts and air bags that they had to be forced to do it! Where's the leadership in that poor decision on their part?
Don't forget the concept of crumple zones and protecting the passenger in a collision.
--------------

If you can't run a consumer driven business get out and do something else. And if you're in government stop lending money to thieves.
"Show me money" is a common phrase now. What about "show us the "value for money"?

Murney said .... "Corporate welfare is not true private enterprise."

There is no private enterprise as you envision it. It is pure ideology in Right wing circles. What the Right 'does' is NOT what the Right 'says'.

David from Toronto ... "What about "show us the "value for money"?" - I couldn't agree more!!

http://www.forbes.com/opinions/2008/07/18/fannie-freddie-regulation-oped-cx_yb_0718brook.html

It seems the U.S. mortgage industry wasn't 'unfettered capitalism' either, but government regulated. Touche!

Murney? I am enjoying the the schtick!!

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