The U.S. financial industry has essentially been nationalized--socialized, if you will--all within the last couple of weeks.

• The government now owns Fannie Mae and Freddie Mac, two financial firms that are the cornerstone of the U.S. housing industry.

• The government now owns AIG, rhe largest U.S. insurance company.

• The government narrowly avoided having to nationalize the largest U.S. savings and loan (Washington Mutual) and the largest bond broker-dealer, which underwrites and re-sells a huge porportion of U.S. government bonds (Bear Stearns), by quickly arranging their aquisition by JP Morgan Chase. What wasn't divulged in the announcement of that deal was how much the government will underwrite of the bad assets that brought the two firms down. I'm guessing that JPMorgan Chase will be getting a meaningful chunk of the $700 billion bailout money authorized today. The government--we--won't own either of the two firms, but make no mistake we paid a large part of the acquisition costs by JPMorgan Chase.

• I'd be willing to bet that some sort of government backstop likely had a lot to do with the middle-of-the-night Bank of America acquistiion of Merrill Lynch, as well. When the 10Q's and 10K's are published in future years, watch for how much of the money was ours.

• Goldman Sachs and Morgan Stanley are teetering, but are still privately-owned. But our government will be involved in the future management of these firms by demanding that they agree to become national bank holding companies and subject to regulation by the Federal Reserve. Watch for how much of the $700 bil goes to buying the bad assets from these two firms.

• One of the largest European banks, the United Bank of Switzerland (UBS) may be mortally damaged by their ownership of U.S. mortgage-backed securities. I'm hopeful that we spend the $700 bil bailing out our own financial institutions first, but in this world financial market don't be surprised of some of "our" money goes to bail out a European bank. Someone should be asking how much the Europeans are anteing up for their part of the bailout. Nationalizing our banks is one thing, but funding foreign banks is altogether another.

• And the $700 billion authorized by Congress today will be used to buy non-performing assets from financial institutions in an attempt to assure their survival. In these cases, the government won't own the beneficiaries--nationalizing them--but public funds will be what will assure their survival.

The motives for nationalization are political as well as economic. It is a central theme of certain brands of 'state socialist' policy that the means of production, distribution and exchange should be owned by the state on behalf of the people. Socialists believe that public ownership enables people to exercise full democratic control over the means whereby they earn their living and provides an effective means of redistributing wealth and income more equitably. In the current instance the U.S. government won't own all the important financial institutions, but it will be our money that will permit their survival.

Here's part of the defiinition of a "nationalized" industry. Does this sound familiar?...Nationalized industries are charged with operating in the public interest and may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs. Nationalization may occur with or without compensation to the former owners.That's Fannie Mae and Freddie Mac described to a "t", isn't it?

You won't hear the term "nationalized" or "socialized" passing he lips of any elected or appointed official in Washington. But there is no doubt that we have just socialized our banking system. And just in case anyone missed it, all this happened on the watch of an eight-year long conservative political administration. Many are expressing concern that the liberal presidential candidate might sponsor socialist-leaning legislation if he is elected. It's doubtful that he'd be successful in achieving anything approaching the scale of the socialism that has actually occurred by the nationalization of our financial industry in the last two weeks.

Maybe the lesson to be learned is that a particular political party can't be relied upon, even over a long period of time, to achieve the idealogies of those they purport to represent. Maybe what we've learned is that we should ignore the labels and the campaign rhetoric in favor of listening and watching what our elected representatives say and do. And until some meaningful reform is made in campaign finance laws--like the Deep Throat character suggested to Bob Woodward back in the Nixon administration--FOLLOW THE MONEY!

Originally Posted by Villages Kahuna

The U.S. financial industry has essentially been nationalized--socialized, if you will--all within the last couple of weeks.

• The government now owns Fannie Mae and Freddie Mac, two financial firms that are the cornerstone of the U.S. housing industry.

• The government now owns AIG, rhe largest U.S. insurance company.

• The government narrowly avoided having to nationalize the largest U.S. savings and loan (Washington Mutual) and the largest bond broker-dealer, which underwrites and re-sells a huge porportion of U.S. government bonds (Bear Stearns), by quickly arranging their aquisition by JP Morgan Chase. What wasn't divulged in the announcement of that deal was how much the government will underwrite of the bad assets that brought the two firms down. I'm guessing that JPMorgan Chase will be getting a meaningful chunk of the $700 billion bailout money authorized today. The government--we--won't own either of the two firms, but make no mistake we paid a large part of the acquisition costs by JPMorgan Chase.

• I'd be willing to bet that some sort of government backstop likely had a lot to do with the Bank of America's acquistiion of Merrill Lynch, as well. When the 10Q's and 10K's are published in future years, watch for how much of the money was ours.

• Goldman Sachs and Morgan Stanley are teetering, but are still privately-owned. But our government will be involved in the future management of these firms by demanding that they agree to become national bank holding companies and subject to regulation by the Federal Reserve. Watch for how much of the $700 bil goes to buying the bad assets from these two firms.

• One of the largest European banks, the United Bank of Switzerland (UBS) may be mortally damaged by their ownership of U.S. mortgage-backed securities. I'm hopeful that we spend the $700 bil bailing out our own financial institutions first, but in this world financial market don't be surprised of some of "our" money goes to bail out a European bank. Someone should be asking how much the Europeans are anteing up for their part of the bailout. Nationalizing our banks is one thing, but funding foreign banks is altogether another.

• And the $700 billion authorized by Congress today will be used to buy non-performing assets from financial institutions in an attempt to assure their survival. In these cases, the government won't own the beneficiaries--nationalizing them--but public funds will be what will assure their survival.

The motives for nationalization are political as well as economic. It is a central theme of certain brands of 'state socialist' policy that the means of production, distribution and exchange should be owned by the state on behalf of the people. Socialists believe that public ownership enables people to exercise full democratic control over the means whereby they earn their living and provides an effective means of redistributing wealth and income more equitably. In the current instance the U.S. government won't own all the important financial institutions, but it will be our money that will permit their survival.

Here's part of the defiinition of a "nationalized" industry. Does this sound familiar?...Nationalized industries are charged with operating in the public interest and may be under strong political and social pressures to give much more attention to externalities. They may be obliged to operate some loss making activities where social benefits are clearly greater than social costs. Nationalization may occur with or without compensation to the former owners.That's not Fannie Mae and Freddie Mac described to a "t", isn't it?

You won't hear the term "nationalized" or "socialized" passing he lips of any elected or appointed official in Washington. But there is no doubt that we have just socialized our banking system. And just in case anyone missed it, all this happened on the watch of an eight-year long conservative political administration. Many are expressing concern that the liberal presidential candidate might sponsor socialist-leaning legislation if he is elected. It's doubtful that he'd be successful in achieving anything approaching the scale of the socialism that has actually occurred by the nationalization of our financial industry in the last two weeks.

Maybe the lesson to be learned is that a particular political party can't be relied upon, even over a long period of time, to achieve the idealogies of those they purport to represent. Maybe what we've learned is that we should ignore the labels and the campaign rhetoric in favor of listening and watching what our elected representatives say and do. And until some meaningful reform is made in campaign finance laws--like the Deep Throat character suggested to Bob Woodward back in the Nixon administration--FOLLOW THE MONEY!

Good Post Kahuana.......as you know socialism or nationalism is my single biggest fear and we are well on our way in so many aspects of life. Someday we will wake up and understand that party is not the answer....you are correct.....does not matter the party.

Originally Posted by Bucco

Good Post Kahuana.......as you know socialism or nationalism is my single biggest fear and we are well on our way in so many aspects of life. Someday we will wake up and understand that party is not the answer....you are correct.....does not matter the party.

Oh well, at least the price of rum will be stable and NASCAR tickets won't go up in price this year.....

Why is it so many Americans are so willingly giving in their soverignty and liberties? If you have paid attention at all to history, that is how many other countries have gone the way of Marxist and Socialism.

Out fighting men and women lost their lives to protect our liberties and keep this country save to live out our Constitutional freedoms.

Liberalism breeds Marxism and Socialism. Check it out for yourself. Do the research. Forget party line. This is YOUR life and your families lives.

American International Group corporate executives, and representatives of various AIG subsidiaries, were partying in style at the posh St. Regis Monarch Beach Resort, in Southern California, just 2 weeks after taxpayers bailed out the insurance corporation for $85 billion. Was this really an effective use of taxpayer money?

Remember how, just last month, AIG teetered on the brink of financial apocalypse? The effects of the insurance giant's imminent collapse were deemed so dire that the Federal Reserve galloped to the rescue with $85 billion of your (and my) tax dollars. What a difference two weeks make.

Last Friday, as the rest of America was in financial crisis overload, preparing to watch the Presidential debates, and reeling from the aftershocks of Congress rejecting the first bailout plan; executives and insurance representatives from AIG subsidiaries were living it up with champagne and caviar in a swanky ocean front hotel.

No word yet as to what the conference was about, or why it wasn't canceled after the taxpayer funded bailout went through, but AIG did offer a weak explanation that the event was "not what it seems." Now that the American taxpayer is effectively footing the bill for these types of questionable corporate decisions, an off-the-cuff answer is as insulting as the event was inappropriate.

Originally Posted by junglejim

American International Group corporate executives, and representatives of various AIG subsidiaries, were partying in style at the posh St. Regis Monarch Beach Resort, in Southern California, just 2 weeks after taxpayers bailed out the insurance corporation for $85 billion. Was this really an effective use of taxpayer money?

Remember how, just last month, AIG teetered on the brink of financial apocalypse? The effects of the insurance giant's imminent collapse were deemed so dire that the Federal Reserve galloped to the rescue with $85 billion of your (and my) tax dollars. What a difference two weeks make.

Last Friday, as the rest of America was in financial crisis overload, preparing to watch the Presidential debates, and reeling from the aftershocks of Congress rejecting the first bailout plan; executives and insurance representatives from AIG subsidiaries were living it up with champagne and caviar in a swanky ocean front hotel.

No word yet as to what the conference was about, or why it wasn't canceled after the taxpayer funded bailout went through, but AIG did offer a weak explanation that the event was "not what it seems." Now that the American taxpayer is effectively footing the bill for these types of questionable corporate decisions, an off-the-cuff answer is as insulting as the event was inappropriate.

BUT NOW we have the beginniing of socialism in this country and their boss is the United States Government and that may well apply to most things very soon ! Now that should give everyone a fuzzy feeling !

If there was ever a repudiation of "free market-trickle down" economics, the last week defines it.

I heard an economics professor interviewed today and he said he was in a "deep depression". He explained that all that he believed and all that he has taught for almost 30 years seems to have been permanently refuted and invalidated in a very short time. He said that he's given the situation a lot of thought and has determined that he can't continue to advocate free market economics and attempt to provide the academic proofs that he so strongly embraces as an academician. He said he had considered whether what has happened in recent days is just temporary or whether it could be explained by some short term condition or event. He concluded that it could not be so explained and that recent events repudiated all that he knows and believes in regarding economics.

When you really think about it, what we've done in just a short time is nationalize or socialize our financial system. One could argue that the nationalization is temporary and the banks, insurance companies, securities dealers and guarantors eventually could be re-privatized. Personally, I think that the public and elected officials have been spooked badly enough by the incompetence, irresponsibility and even larceny of virtually all parties involved--public, private, elected, professional...everyone--that I think re-privatization is a long way off.

It seems it's a lot like we've been dropped very quickly into the Scandinavian model where government and other nationalized industries, including banking, represent about half of the employment in those countries. While we've been conditioned to think this is all bad, I consider a show I saw on TV describing the unusual satisfaction Scandinavians have with their lot in life. They aren't concerned in the least that their countries aren't world economic powers, or that they don't have big armies, or that they have little influence on world affairs. I recall seeing a bunch of citizens--I can't remember whether it was Sweden or Norway--interviewed. They were uniformly happy and when asked whether they had any desire to live in a place like the United States, they were unanimous in rejecting the idea. If I had to describe how their answers impressed me, it was that they were "politely disdainful" of the thought of living in the U.S. Obviously, those countries are more homogeneous than the U.S. and a change to such a revised set of collective societal standards is unlikely, I think.

But I'm still thinking that maybe in the longer term the financial implosion of 2008 could be a good thing. It has already made us less wealthy and is almost certain to further the decline in our personal wealth. It will almost certainly result in a change in our national standard of living. The events clearly defined greed, irresponsibility, immorality and the absence of any concern for fellow citizens. That's just the result of the financial implosion. We also face serious threats as the result of damage to our environment and our reliance on foreign oil. Maybe it's good that events have forced us to think about those things. The crisis has clearly weakened the U.S. Financially, we're on tender hooks. We're running out the string on the use of our military. We're too reliant on other countries, not all friendly, for basic resources. We've pretty much lost the ability to influence world opinion, either politically or financially. We're becoming less competitive in the world economy. Our children's education lags other developed countries badly. The ideology of our political leaders seems to be either openly rejected or only passively accepted. We're well on our way to becoming a larger Scandinavian country.

But would that be all bad?

Originally Posted by Villages Kahuna

......

We're well on our way to becoming a larger Scandinavian country.

But would that be all bad?

During WWII those that objected to Hitler were among the first to be conquered, Sweden remained officially as a neutral only because it allowed Nazi access to Swedish transportation systems in moving troops and war materials used against its Scand-neighbors, and then ALL had to capitulate for decades with its bully neighbor (USSR) on every dispute.

Their taxes are stratospheric and are at the top of the "who consumes the most alcohol and drugs per capita" list because life there is "so blissful."

Yeah, it would!