Wednesday, May 06, 2009
Banks as levers of power
Word:
[I]t's now clear that the worry many of us had at the time of the bank bailouts has come true: the government is using its intervention in the banking system to pressure banks to give special deals to the government's special friends.
(The government is apparently still taking the line that they are only intervening because the automakers are splendid, robust companies that got caught in a "perfect storm". If so, Chrysler must be stuck in the Bermuda Triangle, because owners have been playing "hot potato" with its dying brands for most of the last decade.)
Countries that use their banking systems this way don't get good results.
The mere ownership by government is bad enough, but its exertion of control over the financial system to perform political favors to benefit the party in power is a real problem. Of course, lefties would argue that the very structure of the financial system has been geared to benefit the "rich," but -- here's the ironic part -- they break for the Democrats.
CWCID: Glenn Reynolds.
6 Comments:
By 
Purple Avenger, at
Thu May 07, 12:40:00 AM:
Once Don Obama and his capos work over "the rich" like they were Brooklyn shopkeepers getting shaken down for protection money, their tune may change.
By 
, at
Thu May 07, 04:11:00 AM:
Well, they still need add the fallout from CRE, credit cards, the true cost of write-downs via foreclosure or other modifications (hidden by m2m changes), car loans, etc. (a few more trilion collectively), and then we'll see ... saving bad companies for the sake of forestalling the inevitable is folly. What happens when the US is unable to borrow from foreign countries to finance this insanity?
Inflate the dollar, wiping out whatever the 'rich' have left, and presto!
By JPMcT, at
Thu May 07, 06:32:00 AM:
This house of cards isn't built on rock...or sand...it's built on China!
It's not a very good idea to be a puppet...but even worse is being a puppet with one string!
And China is starting to get nervous....
By , at
Thu May 07, 07:38:00 AM:
Indeed JPMcT, you are correct, sir.
When we start to inflate the currency to try to manipulate out of this, the Chinese will see the Trillion they hold being devalued, and then the real game begins.
I only hope we see strong leadership emerge who can lead this country off the addiction to entitements and greed, and back to a place where we can rebalance things.
While it may seem unfair that some have so much, and others so little, there's needs a reconning that some of those haves worked really really hard to have. Sure, there are poor folks who work in good faith an entire life, and still don't ever put much together. Each of us has generations, some nearer than others who walked that walk.
When China stops lending, it'll hurt them too, but it's going to get dicey. And, if we get to where we cannot afford to police the planet, look out below ...
JT
By The Conservative Wahoo, at
Thu May 07, 08:00:00 AM:
It isn't without a great case of schadenfreude that I look upon the titans of Wall Street getting bitten by the dog they fed. The truly rich don't worry about pocketbook issues and you can't tax them into a lifestyle change. This gives them the wherewithal to create and sustain their great social consciences. Blech.
By , at
Thu May 07, 09:20:00 AM:
TCW ... I thought that way, until Madoff ... now I figure those uber rich got slammed of somewhere between a material portion and virtually all their wealth. From what I understand, his client base was not the average Joe $5 millionairres.
