Wells Fargo, JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, Morgan Stanley, Merril Lynch, to name some of the more recognizable institutions that you, the American taxpayer now own part of, Federal investments for the above institutions range from 10-25 billion each.
Ask most people what the bailout is, and chances are they won't answer with: The partial nationalization of the banking system. To speed the plan through congress the administration said the money was needed to purchase bad mortgage-related assets, and said nothing about direct stock purchases.
Most of the Treasury's investments so far have been in preferred bank stocks and most of them thus far have been losing investments.
The government has thus far given Citigroup 45 billion dollars, aside from preferred stock at $1000/share, the government deal included warrants for 210 million shares at $17.85 and 254 million shares at $10.61, Citigroup closed today at $7.02, a potential loss of over 3 billion dollars.
Today, the President offered a 17.4 billion dollar bailout to the auto industry, declaring, in a gesture worthy of Hugo Chavez, Public Law 110-342 to be 'non-binding'. The bailout demands concessions similar to those rejected by the Senate a week ago.
If you'd like to read what the law says:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ343.110.pdf
Some of the terms include a requirement to cut compensation for rank-and-file workers, executive compensation restrictions, sale of aircraft or interests in aircraft, detail spending on holiday parties, travel and new real estate, and get White House approval for asset sales and other transactions of more than $100 million. Nothing like a free market, eh?
The question that remains, is why is this all silently passing by?
Socialism by any other name...
~Finntann~
3 comments:
What was the President's Comment? Something about having to violate free-market capitalism in order to save it?
I think I first heard this on Bill Bennet in the Morning, although I found this through google, it is the same argument:
http://www.lewrockwell.com/tucker/tucker115.html
That was a good article. Thanks for the tip. It's called creative destruction.
I don't even thing the car industry will go the way of the piano industry. An orderly bankruptcy could force out entrenched thinkers in management and clean house, providing for a bright future.
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