After weeks of uncertainty and crumbling financial markets the Europeans, particularly the countries that Rumsfeld once derided as "old Europe" came to together and did something remarkable that just might save the world economy. Led by Germany, France, England, Spain and the Netherlands European countries pledged a total of about $2.3 trillion dollars to rescue their financial sectors. Most of the money will go towards purchasing equity stakes in private sector banks. In reality, the European governments have decided to nationalize their financial sectors. In relation to the size of their economies the amounts committed to this action by Germany, France and England dwarf the U.S. $700 billion rescue package.
When European investors saw that their governments were committed to whatever level of government intervention it takes to restore liquidity to their markets their reaction was immediate; European markets were up over 11% on Monday. This momentum carried through to Wall Street which also went up over 900 points today when they realized how seriously the Europeans took this situation and what they were prepared to do about it. U.S. markets were also encouraged by indications that the focus of the U.S. bailout package will shift from buying bad assets to having the U.S. Government taking ownership positions in an undetermined number of U.S. banks. The CEOs of the top five private banks in the U.S. have been summoned to a meeting today with senior government officials in Washington and I would not be surprised if the purpose of the meeting is to inform the CEOs that the days of their firms being freewheeling private sector corporations are over their most important shareholders are going to be the American taxpayers.
Why has the response to this crisis been more bold and more succesful in Europe than in the U.S.? I think it is because in the U.S. "socialism" is still a dirty word while there are no negative connotations to it in Europe. Europeans saw that a healthy dose of socialism was the only adequate response to the crisis and did not face the political contraints on American politicians of pushing unabashadly socialist solutions. If today's gains in the stock market are to be sustained the U.S. Government is going to have to get over its allergy to socialism and greatly expand its plan to take control of crucial segments of the Economy.
While Barack Obama has said the debacle of the last month has been the final judgement on the shorcomings of the Bush Administration, what it really is is the final judgement on the failure of Reaganism (with its unfettered free markets and reliance on debt) and the resurgance of mixed ecomomies that incorporate the strengths of both capitalism and socialism. While there will still be a largely privately owned economy in America, there will be enough government presence to insure that Reaganites will not no wreck it again with their reckless and irresponsible behavior.
The sudden collapse of Reaganism in the Fall of 2008 is comparable in its significance to the disintigration and discrediting of Communism in the 1980s.
Op has no clue and he cuts and pastes it from a website with the same attributes. Fails to mention bank failures all over Europe and the Icelandic economy. Fails to mention that Germany,France and Italy are moving away from it. Fails to mention the unemployment rate in Europe.
__________________
"Banning guns is an idea whose time has come."
- Joseph Biden
Associated Press 11/18/93
"Be thankful that we're not getting all the government we are paying for." Will Rogers
My post was not a cut and paste job nor was it taken from any website. It is based on the conclusions I have drawn from reading the media reports and my own knowledge, experiences and analysis of the situation. Just because I can write better than most people on this site do not assume the things I write are cut and paste jobs.
The problem was that European banks were facing a crisis, but their governments have acted quickly and decisively to confront it with what ever resources the central governments needed to muster to restore confidence in Europe's financial system. We are still behind them on that score but I think moving in the direction of the government guaranteeing the financial system. Because they have acted as they have, the European countries will probably have less unemployment than they would have had they not massively intervened in the market. On the other hand, if we do not concentrate our bailout package on the federal government obtaining equity stakes in major financial institutions rather than buying bad loans we will continue to have liquidity problems and unemployment is sure to rise.
Die-hard Reaganites will continue to maintain that the gutting of government regulations, irresponsible tax cuts, huge, unsustainable and unending federal budget deficits and the crushing national debt that has resulted from the Reagan-Bush deficits did not contribute to the debacle of the past two months but I think most people are coming to the realization that a strong role for the government in our economy is essential to its stability. We can no longer assume that budget deficits do not matter because ***an and China will always be there to lend us the money to sustain our profligate spending and insufficient government revenues. We can no longer afford to spend more on Defense than the rest of the world put together. We can no longer think of our $10.2 trillion national debt as an abstraction and will have to start to realize it is a real claim on our future income and wealth that amounts to $34,000 for every man, woman and child in the United States. We are going to have to go back to the 1990s when Clinton enforced a pay as you go system that actually created surpluses and a reduction in the debt.
I still maintain that the sudden and total collapse or Reaganism in September-October 2008 will be seen as a watershed development on a par with the 1989 disintigration of communism.
The sudden collapse of Reaganism in the Fall of 2008 is comparable in its significance to the disintigration and discrediting of Communism in the 1980s.
I'm no economist, but my take on this whole thing may be just as partisan:
a: Bush I began deregulation of the financial services industry paving the way for the creation
or 'derivatives' such as collateralized debt.
b: it was the Democrats with la-la pie in the sky 'give themoney away' policy who mandated under severe
penalties, the forced offering of mortgage credit to unworthy borrowers under the mistaken premise
that it's a person's right.
c: 2 slob democrats oversaw the 2 biggest mortgage holders in the country, FNMA and FHLMC and allowed
the set of circumstances which made them government step-children.
I do not see how reaganomics had anything to do with this. Rather, the greed of the lenders, the
stupidity of the borrowers, and the corruption of the overseers. Reaganomics is basically sound, insofar
as the tenets of this financial 'plan' are conducive to a favorable trade and business atmosphere.
The euros are socialists thru and thru and it's no skin off'a their apple to socialize their own privately held
financial system. Thankfully, here in the USA there is somewhat of a well-deserved stigma attached to socialist tendencies.
Thankfully, here in the USA there is somewhat of a well-deserved stigma attached to socialist tendencies.
Those fine Reaganite anti-socialist Republicans had no trouble sendingUS jobs off to theircommunist buds in China at the request of their corporate fat cat contributors.
Thankfully, here in the USA there is somewhat of a well-deserved stigma attached to socialist tendencies.
Those fine Reaganite anti-socialist Republicans had no trouble sendingUS jobs off to theircommunist buds in China at the request of their corporate fat cat contributors.
Again, your train of thought is off on a spur to nowhere. The export of US jobs to commies, socialists,
and whatever have you is not anything other than Capitalism in its purest form. And if you wanna see the direction of THIS election, see Obamamama's 'fat cat' contributors....namely George Soros, the anti-American socialist buying American devolution....
Clinton did his share to ship jobs over seas too. Carter signed the bill forcing Fannie may to make risky loans Johnson got it started. Reagan started the deregulation everyone else including clinton did nothing to stop it. Bush ll Tried but Frank and Dodd shot down all efforts to rein in Fannie and Freddie. That about brings us up to date. McCain also tried to pass legislation to regulate Fannie and Freddie, again, Frank and Dodd shot it down. Everyone since LBJ at least has a hand in this mess.
Clinton did his share to ship jobs over seas too. Carter signed the bill forcing Fannie may to make risky loans Johnson got it started. Reagan started the deregulation everyone else including clinton did nothing to stop it. Bush ll Tried but Frank and Dodd shot down all efforts to rein in Fannie and Freddie. That about brings us up to date. McCain also tried to pass legislation to regulate Fannie and Freddie, again, Frank and Dodd shot it down. Everyone since LBJ at least has a hand in this mess.
And yet, the democrat crapbags wash their hands of thematter and point to republicans. What vile
creatures these be !
The Ascendency of Socialism
Hey, the Republicans drew up the plan. Phil Gramm, Republican from Texas, drew it all up, granted Clinton signed it, But it was Republican Policy
