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This Sunday the Bush administration asked Congress to approve a “rescue package” that would give officials the ability to inject “billions of federal dollars” into Freddie Mac and Fannie Mae. The Federal Reserve also announced that it would make its short-term lending programs available to Freddie and Fannie, said the NYT.
An official said the Fed’s decision to permit the companies to borrow from its so-called discount window was approved at the request of the Treasury, but that it was temporary and would probably end once Congress approved Treasury’s plan. Some officials briefed on the plan said Congress could be asked to extend the total line of credit to the institutions to $300 billion.
The actions, which taken together could provide an overwhelming surge of capital to the companies, were the second time in four months that the housing crisis had prompted the government to scramble over a weekend to rescue a major financial institution.
Last March, the Treasury Department engineered the sale of Bear Stearns to prevent it from going into bankruptcy and cause a shock to the financial system.
Is this deja vu all over again? Nah, it’s just months of war money.
#29–SL==ok, I’ll accept that quibble if you will accept that “heavy regulation” does not mean excessive regulation.
You missed Scott’s point when he said corporations are not people==much of what is wrong with our law about corporations is that they are given rights of people but not the responsibilities of people. That with limited liability often in practice meaning NO liability for Officers and Directors gives us a MONSTER in the market place.
So, in fact you have turned the argument on its head==its individuals and partnerships that are not allowed to act like corporations.
But how to focus this so that either one of us might benefit?
I think we need to get specific. Can you name a law at all that you think is “unfair” to corporations, whether or not individuals are free from it?
I’ll give you the parallel construct–management’s total compensation should be limited to some multiple of the employees as a whole. No reason for CEO compensation to have gone up 20 Fold in last 40 years in comparison to the workers and foreign based CEO’s. It corrupts the entire function of management as opposed to the owners.
#21 – KwadGuy,
The person that created that presentation likely worked in the subprime market and is likely now out of a job (just a guess, of course). I bet you could get him/her over to give the presentation for the cost of a beer.
#30–dark aerow==is the solution to bad regulations good regulations, or no regulations? Seems to me that bad regulations and no regulations lead to immediate harm.
Only “good” regulations strike the balance between productivity and predictability and a level playing field on which healthy competition can take place?
So==when you argue for “no regulation” I know that you are simply a charlatan looking for a mark to fleece. I hope you take comfort in Bush, Cheney, and Grahams warm embrace. You deserve comfort nowhere else.
#29 – Sea Lawyer,
#28, and there you go making up things I have not said. Minimal regulation does not equal no regulation. Scott Scott suggested that people should be free, but that corporations should be heavily regulated. So does that mean that the sole proprietor isn’t going to be made to operate under the same regulatory rules as a corporation, if he is so free and the corporation is not? How is that in any way just to the owners of the corporation?
The big difference is that the sole proprietor is legally responsible for his/her actions. Officers of a corporation are rarely if ever held accountable for theirs.
So, the shareholders and executives should indeed be free. They just should not be free to commit crimes under the name of the corporation and be absolved of all responsibility, as is usually the case in the corporate world.
Corporations should not be free because they are not life forms. Do you not see that a corporation is not alive? Do you think that a corporation, as a tool for humans, has inherent rights? I do not.
Therein lies the difference. Union Carbide is not guilty of murder. However, it’s executives are. When India attempted to prosecute the president, the U.S. stepped in and got him out. Why? Do you think this was an accident? Perhaps so, in the same way that driving with a blood alcohol level of 3% and killing someone might be considered an accident by some, but not by me.
Check out the cost cutting measures that the executives of the company decided to take. Tell me after that how those 3,800 people were killed by accident. Then tell me why the executives should not be immediately arrested, brought to India, and tried by the local courts with all due speed.
Or, one might ask why no one at ExxonMobil has ever been tried for criminal charges for similar reasons, though Valdez did not result in human death.
In short, rich scum buckets should not be able to hide behind their corporate charters.
With human rights come human responsibilities. A corporation has neither.
#34-bobbo…WTF?
First off, I hate bush, cheney and grahams, they do not stand for what I stand for.
I would argue that regulation and government involvement has caused the problems we see today. Afterall would corporations have rights if the government didn’t give them those rights? Would our dollar be have been devalued if we still had a pre 1913 gold standard? Would all this mal-investment have taken place if government didn’t bailout companies and allow easy credit? Would we have a business cycle that ravages our economy if it weren’t for the federal reserve? Would company A be able to squash company B if it didn’t get some arbitrary subsidy/regulation/special privelege from the government?
Maybe you could give me an exmpla of what a “good” regulation would be? I can think of very few regulations that are benficial to creating an equal playing field.
I believe that minimal regulation is they solution not the problem.
I really wish there was a preview button…
/sigh
#29 Sea Lawyer:
“So does that mean that the sole proprietor isn’t going to be made to operate under the same regulatory rules as a corporation,
He already doesn’t. The corporation exists because it is given special privileges by the government, primarily, limited liability, but also other things like tax treatment. And of course it can conduct business in two places at once.
“if he is so free and the corporation is not? ”
The proprietor is a human being….endowed by his creator with certain inalienable rights…
“How is that in any way just to the owners of the corporation?”
They paid their money, for stock, and they take their chances based on the rules in play. Or, if they don’t like the rules, they don’t buy in. Simple as that. But those who buy in should keep in mind the fact that the corporation exists as a protectorate of the state, and although such investments can often be extremely profitable, they are subject to the whims of regulators. The most the investor can lose is the money they invested. The most the sole proprietor can lose is everything up to and including the shirt off his back. There’s a fundamental difference in risk.
#36–aerow==you spout the same economic nonsense that Bushco does. My point is clear at #34 with an example at #32.
You must be living in a different reality than I am if you think that what I was spouting is anything similar to what Bushco is spouting/actually doing…What a load of crap.
Bushco certainly spouts economic nonsense…They will occasionally pay lip service to SOME of the things I believe…but thats the extent of it…it’s all talk…Talk is meaningless when there isn’t any action taken.
Saying that I “pout the same economic nonsense that Bushco does” is like saying that Ron Paul supports GW and his economic policies. It’s absurd…it’s….MADNESS!
#39–aerow==as I stated above, lets get specific. What regulatory laws do you think go too far and need to be pulled back?
#36 Dark Aerow,
A good regulation would be one that required banks to maintain some standard of risk averse investment portfolio. Another might be that those issuing credit default swaps, a form of insurance, be required to maintain the funds to pay out in the event of a claim.
How about safety regulations for automobiles and airlines? Fuel economy standards for automobiles? Safety standards for chemicals produced? (On this last, I’d advocate that the chemical companies be required to prove safety of their products before release, rather than having lawsuits to award damages for the dangerous ones after the harm is done.)
Do you need more examples? That was just a quick list off the top of my head.
#42–Right you are Scottie. It may be semantic since Aerow claim no affinity for BushCo BUT I take no, or limited, or minimal regulation as NeoCon code words for “remove the protections that were put in place and forgotten why years ago so that we can cheat and steal once more.”
That is EXACTLY what minimal regulation gave us with the Enron LoopHole and the sub-prime mess. Those are just the two most recent. So, in the end as usual “labels” are for idiots. We have to discuss specifics otherwise only name calling is achieved.
Now I like name calling, but I’d rather learn something if there is anything to be learned?
Seems to me:
a) Money is a direct substitute for sex/power vis a via our nearest relatives the good old bonobo monkey;
b) Regulation, power to enforce power to create, is a form of sexual selection, for instance any religion;
Money(food) tends to the male, whilst power(selection) tends towards a female
Therefore there is an excess of powerful females with too much money
(or in other cases there could be too many powerful males with too much money but never enough power)
#44 – stalinvlad,
Seems to me:
a) Money is a direct substitute for sex/power vis a via our nearest relatives the good old bonobo monkey;
OK, you tripped my wildlife errors flag, everyone else please excuse the tangent.
<rant>
1) Bonobos are not monkeys!! Like humans, bonobos, chimps, gorillas (mountain and lowland), and orangutans are great apes. Even gibbons and siamangs are apes, elbeit lesser apes, but are definitely not monkeys.
2) Our behavior with regards to sex and power is far more closely related to chimps than to bonobos, with the exception of a brief period of counterculture in the late 60s and early 70s (much better times, IMNSHO; too bad I was too young to reap most of the benefits).
Bonobos resolve issues of power using sex. Whenever there is any kind of conflict, bonobos have sex to resolve it. All combinations are acceptable in bonobo society. Truly bonobos would rather fuck than fight. In fact, alone among the great apes, intra-species lethal violence has never been observed in bonobos in captivity or in the wild.
Chimps resolve issues of sex with power. They fight, sometimes to the death even within the tribe. Inter-tribally, they have full warfare. Numerous cases of intra-species lethal violence have been recorded in chimps both in the wild and in captivity.
We are equally closely related to both species.
However, with regard to sex and violence, we are obviously chimps on steroids.
With regard to some other interesting characteristics, we are more bonobo-like. Bonobos are more gracile in appearance, and have longer legs. They also have a much greater tendency to walk upright, especially when carrying tools.
Anyway, sorry for the rant. I just can’t stand such really bad misinformation about the wildlife I love. I hope that one day soon, the D.R. Congo will calm down enough to allow tourism. I would dearly love to see bonobos.
</rant>
I really want to continue this discussion because it interests me, however I wont have much free time until late wednesday or thursday. Hopefully, no one will have forgotten this topic exists by then. >.>
I didn’t forget … did you?
I didn’t forget…I’m just extremely busy.
#36 Dark Aerow,
@ Misanthropic Scott
“A good regulation would be one that required banks to maintain some standard of risk averse investment portfolio. Another might be that those issuing credit default swaps, a form of insurance, be required to maintain the funds to pay out in the event of a claim.”
So you want to regulate banks so that they won’t take on ridiculous risks? Maybe you should look at the real problem. That is, easy credit and bailouts from the government. The easy credit created by the Federal Reserve creates the bubbles and mal-investment; then the bailouts enforce these bad business practices. Essentially we’ve decided to privatize the profits and socialize the losses.
“How about safety regulations for automobiles and airlines? Fuel economy standards for automobiles? Safety standards for chemicals produced? (On this last, I’d advocate that the chemical companies be required to prove safety of their products before release, rather than having lawsuits to award damages for the dangerous ones after the harm is done.)”
Consumer groups, property rights, the market and the court system should be more than capable of dealing with bringing safety to the market place. The market place is self regulating as long as people’s rights are protected by the government. The Idea that government can centrally manage an economy is silly to me.
@bobbo
“That is EXACTLY what minimal regulation gave us with the Enron LoopHole and the sub-prime mess. Those are just the two most recent. So, in the end as usual “labels” are for idiots. We have to discuss specifics otherwise only name calling is achieved.”
Who were the ones that caught Enron? Was it the government or was it the market?
I subscribe to the Austrian school of economics, according to their theory of the business cycle the sub-prime mess isn’t caused by the market; it’s caused by the Federal Reserve.
“Now I like name calling, but I’d rather learn something if there is anything to be learned?”
If you want to learn something I’d suggest actually learning something about how a free-market is supposed to work. I’m for a very small federal government, you name a federal regulation or law or department and chances are that I want to see it abolished or shrunk. Of course, that’s a huge can of worms, I encourage you to read about these sort of ideas on your own That is…if you really do want to learn something…(mises (dot) org)
Relevant Side note: We don’t have a free market and we certainly don’t have free-market capitalism. Instead we have a mixed economy where special interests, corporations, industries and other groups lobby for special privileges in the market place and a centrally planned monetary system.
Capitalism shouldn’t be blamed for this mess, because we haven’t had capitalism.