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Monday, March 31, 2008
Capitalism Gets Its Biggest Overhaul Since The Great Depression, And Republicans Are Going To Do It
An article in the (London) Telegraph by its financial editor indicated that the Bush Administration, led by Treasury Secretary Paulson, and the Federal Reserve Bank, led by Chairman Bernanke may soon propose the nationalization of the United States banking system.
Huh? Yep, those free market in the pinstripe suits and power ties are certainly thinking the unthinkable, and very well may act on their thoughts.
THAT'S HOW SERIOUS THE CURRENT FINANCIAL CRISIS IS!
Talk is that the model being considered for emulation is Norway's, when that and other Scandinavian countries found themselves in a financial quagmire produced by private enterprise in the early 1990's. Reportedly, the actions then taken proved efficacious, in contrast to the drip-by-drip approach taken by the Japanese in the 1990's when their economy imploded. That approach still has not brought Japan back to where it was economically before the implosion.
Already here in the US, the Fed has opened its borrowing window to Wall St. "Investment Banking" firms for the first time since the Great Depression, at least; and, perhaps, for the first time ever. The Wall St. firms have not hesitated to that counter and borrow.
The Administration has released initial drafts of new regulatory powers that they propose the Federal Reserve System be given regarding Wall St. This would have been unimaginable even 3 months ago.
In short, while the mass media covers every detail of Hillary's ensemble of the day and Barack's reason for leaving "Barry" in the dust and McCain's confusion regarding four-letter words beginning with an "I" and others starting with the letter "S," the entire centerpiece of our capitalist economic system is about to undergo its most significant--and traumatic--overhaul in 80 years, all with less media coverage than Britney gets if she puts on or takes off a pair of dirty panties.
Finally, the Norway model mentioned earlier ensured that shareholders of the nationalized organizations came away with nothing, zilch, zero, unlike the Bear Stearns bailout,where those responsible still walked off with their pockets bulging, thought the bulge was much smaller than they expected.
