"I have a mind like a steel... uh... thingy." Patrick Logan's weblog.

Search This Blog

Loading...

Monday, February 25, 2008

Too Big To Fail

A NY Times article on the credit crisis...

Over the last two decades, few industries have lobbied more ferociously or effectively than banks to get the government out of its business and to obtain freer rein for “financial innovation.”

But as losses from bad mortgages and mortgage-backed securities climb past $200 billion, talk among banking executives for an epic government rescue plan is suddenly coming into fashion...

Surprisingly, the normally free-market Bush administration has expressed interest.

Bush? Free-market? Right.

Here's the surprise: "free-market" is a euphemism. Rarely has it meant what you think it means. And that is intentional. This has nothing to do with whether or not a "free-market" would work. Nobody with any current leverage wants a free-market. Why should they? Just look at this very deal being worked out, right in the open. This isn't even a back-room deal.

It reminds me of the Bush tax cuts, more than anything else.

3 comments:

DavidM said...

Free market has always meant laissez-faire (hands off) marketplace, which our current system is not.

Subsidies, heavy regulations, business taxes, government competition in the market, import tariffs and the Federal Reserve bank printing money by fiat(backed by nothing) ALL violate this.

The Bush tax cuts were for people paying taxes, the top 50% of taxpayers pay over 97% of all taxes so they should get the tax breaks. And that number has increased since the tax cuts took effect.

http://www.ntu.org/main/page.php?PageID=6

This 'Bush tax cuts' canard is a good 'rich vs poor' tactic but has NO basis in reality, Patrick.

Paula said...

Hello-
To me there is nothing like a local example of a national problem to bring home the point. In my town of Kaysville, Utah, I walked by a new foundation being put in at the Davis Area Technical College (on 5th East and about 3rd South.) The excavation shows what I consider a very obvious example of offset on faults. It seems that the new building should not be put in and that there are a lot of people who would have like to have known about the presence of such a fault before the area was allowed to developed with private homes. When government cannot adequately regulate and check on the "freer rein of financial innovation" it is not the developers who really suffer (there are other projects, after all) it is the people that have to live with the consequences.

Paula Wilson, Ph.D. Geology

Patrick Logan said...

"Free market has always meant..."

Yes, in the dictionary. In rhetoric, the definition varies by the speakers' intent either to mislead, misdirect, or otherwise.

"the top 50% of taxpayers pay over 97% of all taxes so they should get the tax breaks"

That is a simple formula that seems intuitively obvious, but may or may not be the best choice based on your desired outcome.

There are other formulas to meet other needs.

Blog Archive

About Me

Portland, Oregon, United States
I'm usually writing from my favorite location on the planet, the pacific northwest of the u.s. I write for myself only and unless otherwise specified my posts here should not be taken as representing an official position of my employer. Contact me at my gee mail account, username patrickdlogan.