…when I should be out on the streets with a protest sign, I suppose.
The growth of the bailout of the U.S. financial industry U.S. corporate interests is depressing. Maybe easily foreseen, but still depressing. Yesterday the federal government agreed to guarantee crappy assests of America’s largest bank and give it a further injection of cash.
First, the U.S. Treasury and the Federal Deposit Insurance Corporation (FDIC) will backstop some losses against more than $300 billion in troubled assets.
Second, the Treasury will make a fresh $20 billion investment in the bank. The government has already injected $25 billion into Citigroup as part of the $700 billion bailout passed by Congress in October.
Another step in the wrong direction. Bolstering the private financial sector with public money ultimately does not solve the irresponsibility that led to these problems to begin with. Even when it comes with further market regulation. The government, through regulatio,n cannot halt America’s declining production base, our uber-consumerism, our lust for credit, or our negative savings rate.
Sure the financial sector took on bad debt. There were others however, on the other end who were gobbling that credit up.
We have become a nation of spending. We believe we have come to deserve. Luxuries have become rights and financing those luxuries means everyone has to spend more than they truly have. It is shocking.
Claims that the financial sector’s major players are “too big to fail” is absurd. Sure, it will be painful but rebuilding our economy on a viable base is arguably impossible unless people get burned a little bit. We have too short of memories unless there is some pain involved in our learning.
Let the financial sector fail and declare bankruptcy. And then let us start moving towards some real solutions.
There Is Nothing The Government Can Truly Do
The above is unlikely of course. Congressman Louis Gohmert has thrown a bill into the hopper which would repeal the Emergency Economic Stabilization Act of 2008. If it even gets a vote in committee I’d be stunned.
Oh well, I’ll sit here with my beer imagining what my protest sign should say.