Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Tax Payers Funding Banks Corporate Welfare System

Politics / Credit Crisis 2008 Mar 19, 2008 - 07:52 AM GMT

By: Walter_Brasch

Politics It's a Welfare State—If You're Rich - Listen to conservative talk show pundits and blowhards. Listen to any of the political candidates who proudly amend their names with the phrase “conservative Republican.” One theme resonates in all of the heavy wind—keep the government out of our private lives; let business enjoy a free market economy. Not only should government regulation be minimal, they say, but we must end the “welfare state.”


Of course, what they mean is don't help the individual; help only corporations by giving them significant tax breaks and low-interest loans.

The Federal Reserve last week approved a $200 billion loan program at significantly less than market rates to aid the nation's largest banks. It has also created an almost unlimited credit line for the top 20 struggling investment firms. This past Sunday, it approved a $30 billion credit line to allow financial giant JP Morgan Chase to take over failing financial giant Bear Stearns. Less than a year earlier, Morgan Chase was the recipient city and state subsidies of more than $750 million over a 15 year period; with assets of about $1.6 trillion, it is the nation's third largest financial institution. The $236 million sale, brokered and sanctioned by the Fed and the Department of Treasury, includes Bear's New York skyscraper and about $30 billion in assets of a company days from filing bankruptcy.

Bear's stock one year ago was about $170 a share; Morgan Chase paid just $2 a share. As many as one-third of Bear's 15,000 employees, and several thousand of Morgan Chase's 175,000 employees, are likely to be laid off in the acquisition.
Twice in the past three years, Fortune magazine rated Bear Stearns as the nation's “most admired securities firm. The 85-year-old company had survived the Great Depression of 1929 and several recessions; it couldn't survive the current recession, the one George W. Bush doesn't believe exists.

Bear's problems, like that of dozens of major lenders, stemmed from aggressive sub-prime lending practices. About $1.3 trillion of sub-prime loans is still outstanding, according to the Center for Responsible Lending. The materialistic greed of two years ago, which led to inflated stock prices, has become the financial panic of George Bush's last year in office.

Perhaps the Fed's multi-billion dollar dealings will help the economy. George Bush says he's “on top of the situation.” He says that although there is “a lot of uncertainty,” things are “ not that bad.” He says he wants Americans “to understand that in the long run we're going to be just fine.”

That isn't much consolation to all Americans who are paying more than $3 a gallon for gas, or to the 7.4 million Americans who are unemployed, the two million Americans who were forced to declare bankruptcy the past two years, or the one million Americans, most of whom have unblemished work histories, who have already lost their homes—none of whom are beneficiaries of the government's corporate welfare system.

By Walter M Brasch PhD
http://www.walterbrasch.com

Copyright 2008 Walter M Brasch
Walter Brasch is a university journalism professor, syndicated columnist, and author of 17 books. His current books are America's Unpatriotic Acts , The Federal Response to Hurricane Katrina , and Sex and the Single Beer Can: Probing the Media and American Culture . All are available through amazon.com, bn.com, or other bookstores. You may contact Dr. Brasch at brasch@bloomu.edu

Walter Brasch Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in