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Welcome to socialist states of America
by yamil 18y ago
Welcome to socialist states of America
- albertcardona 18y agoHasn't the USA been engaged forever in heavy market protection, tariffs for imported goods, and heavy subsidies to internal industries like metal foundries, the car industry and particularly agriculture? Hasn't the USA at the same time demanded open markets of all other economies in which it invested or participated in some way? Hasn't the USA's tax dollars funded most private research, yet the economic benefits have been ripped by private industry? The double standard is just showing a bit more than usual at the moment, but nothing has changed.
- Prrometheus 18y agoWhen you have a $3 trillion entity in an economy, people have the incentive to petition it for favors. Even when the government's budget was a lot smaller, businessmen could still finagle for tax breaks and the like. Rent seeking is in the DNA of democracy.
- vitaminj 18y agoI'd prefer to call it the pragmatic states of America. You can't live on ideology alone.
- sethg 18y agoYou obviously missed the LCTM bailout ten years ago. Also the S&L and the Continental Bank bailouts of the 80s. Also the Lockheed and Chrysler bailouts of the 70s.
- nickb 18y agoPartially correct. It's socialism for the rich. If it were socialism, you wouldn't have poor/middle-class people dying from treatable diseases.
- yummyfajitas 18y agoWhat treatable diseases are poor/middle-class people dying of, that could be prevented by socialism?
- sabat 18y agoCancer. Diabetes. Yadda yadda. Do you know how many people are not insured and cannot afford insurance? ("Go to the emergency room" is not a health plan.) Do you know how many people with serious illnesses are turned down by their own insurance companies every year? I'm not saying socialism is an automatic answer, but it'd better than this mess.
- GavinB 18y agoActually, "go to the emergency room" is a health plan. It's just the most inefficient health plan for all involved.
- easyfrag 18y agoand it is also one that treats symptoms and not the underlying conditions.
- jrmurad 18y agoI'm not saying you're wrong that socialism is better than this mess but I will say that capitalism is better than this mess and better than socialism too. Having health insurance provided by the State (i.e. you through your tax dollars after several layers of corruption and bureaucratic waste) does not guarantee quality of care. A competitive free market is more likely to develop better medicine.
- jfoutz 18y agoI'm first to agree efficient markets are fantastic at allocating resources effectively. I'm curios though, how do you guarantee people who are sick/hurt/dying behave as rational actors? I might be mis-remembering but i thought rational actors were a requirement, otherwise they would be to quick to give away money.
- mseebach 18y ago> If it were socialism, you wouldn't have poor/middle-class people dying from treatable diseases. No, since nobody would be middle-class or above, it would only be poor people dying from treatable diseases.
- netcan 18y agoGovernment owned companies does not mean a socialist country. It's something socialist countries do. Eating grass doesn't make you a sheep.
- helveticaman 18y agoEating grass is still stupid.
- mynameishere 18y agoQuacking like a duck doesn't make you a duck. God, that was too easy.
- mynameishere 18y agoWow. Why did this get downmodded? Just curious. It's 100 percent apropos: http://en.wikipedia.org/wiki/Duck_test http://en.wikipedia.org/wiki/Duck_test ...used the phrase when he accused the Jacobo Arbenz Guzmán government of being Communist. Patterson explained his reasoning as follows: Suppose you see a bird walking around in a farm yard. This bird has no label that says 'duck'. But the bird certainly looks like a duck. Also, he goes to the pond and you notice that he swims like a duck. Then he opens his beak and quacks like a duck. Well, by this time you have probably reached the conclusion that the bird is a duck, whether he's wearing a label or not."
- netcan 18y agoBecause this is the opposite. It's more like 'it drink water like a duck'
- sd 18y agoObviously, it's impossible to determine the effect of any one action on the economy -- but if this $85b prevents the markets from crashing, I'd argue its money well "spent." U.S. market cap has already fallen $4t in the past year. Do you really want to risk losing considerably more?
- ojbyrne 18y agoThat was the argument for Fanny and Freddie. Didn't seem to work, and I bet it won't this time. WAMU is next.
- sd 18y agoJust to clarify, I meant that the other course might result in much more massive decline than has already happened. Think 22 sigma level -- like the '87 crash. Bailing out distressed financial firms is almost expected now. Thus, if it doesn't happen, then a lot of market participants may reevaluate their choice to invest in firms with heavy debt. Obviously, these bail outs have their costs, such as the value of money lent as well as increased moral hazard, but it's worth considering whether this is worth the potential cost of a market collapse to the whole economy.
- helveticaman 18y agoThe market collapse of a whole economy? How's Google going to get torched by this? Or Boeing? Or most exporters?
- quasimojo 18y agobecause they are part of an integrated economy. where will google's advertizers find their ad budgets in a stagnant economy? boeing is no different. would these firms be as adversely impacted as wamu? no. but everyone suffers.
- ojbyrne 18y agoMore directly related to Boeing, according to the NYT (http://www.nytimes.com/2008/09/17/business/17aig.html http://www.nytimes.com/2008/09/17/business/17aig.html), AIG has an aircraft leasing division that was planning to buy 73 aircraft this year.
- iamelgringo 18y agoThe US has actually had a much more mercantile approach to business than socialistic. They are capitalistic up to a point, but the governent tends to step in and manage, regulate, bailout, give tax cuts to companies and industries when they deem necessary. There are entire industries that are heavily subsidized and regulated, Telecom, Healthcare, Energy, Transportation, etc... Our countries national roadway system came about more or less as an assistance to the automotive industry. The 401k laws have been a huge boon to the stock market. And, now, the government is making a big move into finance and investment banking.
- eru 18y agoI hope they get some international competition.
- pmorici 18y agoIsn't this called fascism?
- DenisM 18y agoWhoever modded you down needs to know that collusion of state and big business is a distinct attribute of fascism.
- netcan 18y agodistinct?
- aaronblohowiak 18y agohttp://en.wikipedia.org/wiki/Corprotism http://en.wikipedia.org/wiki/Corprotism
- davidw 18y agoThis is exactly the kind of comment that I feared we would see when articles like this start gaining traction. It's a cheese puff comment: it's got some taste, but it's empty. It has nothing to back it up, no content, no reasoning, no well crafted argument. It's just an empty "rah rah" type of slogan of the type that politicians regularly regurgitate. There is nothing new or clever about the comment, it's the sort of thing that's made the rounds elsewhere 100's of times. Being such a cheap, throwaway comment, it mostly/usually doesn't lead to particularly interesting discussions, as we can see here, despite a few good comments, but more zingers, one liners and similar "go home team!" cheering for one political side.
- steveplace 18y agoFreedom.
- netcan 18y ago!!!
- yamil 18y agoMy comment was one of the first reaction to the post (16 hours ago) it was a spontaneous reaction to the somehow shocking news that the US government is taking (again) over a private company in the financial sector. When I wrote "socialist" it was for the irony of the situation, the financial market in the past has been very hostile to any regulation and it is the most visible flagship of liberalism as we know it since Reagan. People who read about economy (check comments bellow) know exactly what I was talking about, this is a well known topic about the contradiction between "less government, less regulations" and "the need of government help in time of troubles". Some more clever and much more articulate people wrote about it and their conclusion is the the current crisis is a direct consequence of lack of proper regulation in the first place. Go read the source it's free, it's online, it's better than expecting Techie guys to spend 30 minutes of their precious time writing a "reasoning" and "well crafted" comment a topic which is only one of their many "hobbies"
- furiouslol 18y agoAIG is getting badly punished for this. They are getting the loan at LIBOR + 8.5%. That's downright punitive. LIBOR + 8.5% is not a rate at which a company with AIG's business model could survive at. AIG lends to people at around LIBOR + 4% for mortgages or LIBOR + a lower % to insure BBB to AA rated borrowers. They'll probably have to sell off their assets in a hurry at below fair value. The longer they wait, the more pain the high interest inflict on them.
- jcl 18y agoWhat happens to them if they fail to pay it off?
- furiouslol 18y agoThe taxpayers suffer. You have to eat the loss.
- icey 18y agoWell, thanks to you I just learned something. I had no idea the US government used the London index to figure out rates for loans. I actually went and looked it up; and you're totally correct. Amazing.