Four weeks later Fannie and Freddie have been ordered to acquire $40 billion a month in “troubled assets.”
I recently ran into a moving bus and have forgotten the reason why the two GSEs were originally “rescued.”
Was it because they bought a lot of tulips? Was it because they speculated in the Mississippi river basin? Did they invest heavily in beanie babies?
Srsly, what exactly are they drinking in DC?
Via Robert Wenzel.
See also: The Bailout Reader
The Recession Reader
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Economic thinking is getting both more confused and more ominous.
The ticker line on one of the cable news shows this morning was, “Rescuing the Rescue” — I kid you not.
Then I got a call from an old friend who is a self-confessed conservative (and an accounting expert for a world-class firm) who said he has “inside intelligence information” the reason the “rescue” isn’t working is “economic terrorism” — somebody “in Dubai or somewhere” is manipulating the markets to make them go down even though the government is intervening.
I suggested that rather than listening to the excuses being floated by the same intelligence community that’s shown such a lack of intelligence over the years, he ought to consider the role of a century of Fed Reserve interest rate price fixing…
That’s when some liberal or conservative fascist congressperson popped on the tube announcing that the financial meltdown is a “national security issue…”
So we see the new “party line” — the “rescue” is failing not because the market is smarter than the manipulators, but because of the terrorists…
The next step is that anyone who question the new economic order is a terrorist…
Hyperinflation, here we come!
Ralph, that reminds me of Lenin blaming all the inherent dysfunction of marxist intervention in industry on “capitalist saboteurs”.
This country is seriously inching closer towards revolution everyday. Even most of the Obama people I talk to are disgusted with him, but are still voting out of force of habit and admit that it [voting] now is a bad addiction(!).
Did someone say revolution?
You say you want a revolution
Well, you know
We all want to change the world
You tell me that it’s evolution
Well, you know
We all want to change the world
But when you talk about destruction
Don’t you know that you can count me out
Don’t you know it’s gonna be all right
all right, all right
You say you got a real solution
Well, you know
We’d all love to see the plan
You ask me for a contribution
Well, you know
We’re doing what we can
But when you want money
for people with minds that hate
All I can tell is brother you have to wait
Don’t you know it’s gonna be all right
all right, all right
Ah
ah, ah, ah, ah, ah…
You say you’ll change the constitution
Well, you know
We all want to change your head
You tell me it’s the institution
Well, you know
You better free you mind instead
But if you go carrying pictures of chairman Mao
You ain’t going to make it with anyone anyhow
Don’t you know it’s gonna be all right
all right, all right
all right, all right, all right
all right, all right, all right
The fallacy here is believing Washington is capable of learning.
Pavlovian responses are hard to unlearn without major punishment (impeachment or ousting) to counteract the previous reinforcement schedule (votes for pork).
Ralph,
Up until the early 1990s, I’d have said I was conservative. Funny thing though, while I have better information to support my position, my political views haven’t changed much but the concept (at least the concept I was brought up with of what it meant to be conservative) has changed. I now would have to call myself libertarian to express my political views.
Ralph,
If I was a rich guy in Dubai I’d be attempting to break the rescue as well. Of course it would be a sneaky thing where the larger the evential resecue the more I benifit, so breaking this rescue means I get more in the end. I’d be willing to lose 10 billion if the next rescue would give me 20 billion.
Of course I’m not rich. I’m just a normal guy. All this inflation will reach me very late. So I end up poorer while this rich guy gets richer yet.
Assuming the rich guy exists of course. The markets are smart enough to break the bailout without extra help of a rich guy in Dubai.
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