Monday, July 14, 2008

Privatizing Profit, Socializing Risk

There is something fundamentally flawed about the conservative economic ideology as first propounded by Reagan and then implemented by George Bush that is fundamentally flawed. And if any time, the current banking-mortgage crisis is providing the first real world test of the ideology of ownership which Bush proudly flaunted (but which actually mean owning on bad debt while Dubya's friend get to charge fees, get big profits and government guarantees for bad behavior) as ownership society during his 2000 run and 2004 rerun. This bogus ideology of ownership and privatizing (including social security) everything is indeed a bad idea, and am surprised that even with being offered the best opportunity to attack- democrats are not offering the biggest broadsides on the idea.While it sounds good on paper, privatizing social security, increasing home ownerships for every Tom, Dick and Harry with bogus debts, and fighting wars on credit are terrible economic ideas. Today, how many seniors due for retirement in 5 years or even younger workers whose 401-k are so decimated will wish to have turned over their social security funds to Wall Street?

Truth is, social security as it is - is an insurance against the exact spectacle we are witnessing on Wall street today with banks failing right and center due to the lax regulation of the current administration (because of its closeness and buddy buddy relationship with the business community). Indeed, there is nothing more reassuring to a would be entrepreneur than a reliable insurance against loss. Any American take business risk today mindful of the fact that social security will be available at retirement not thrown as craps on the crap table in Las Vegas, Wall Street. Thus, progressives and liberals should be mindful and boastful of the positive role this social insurance scheme plays in aiding entrepreneurship: as it is actually a pro-small business program contrary to what big business republicans will want us to believe. Fact is, few people understand the market- and even pros lose money year over year (only 20% of mutual funds beat the market). It is insane that McCain can get away with calling social security a disgrace while he is busy cashing his social security check!

It is so ridiculous that even after tax payers are made to bail out Bear Stearns, and were promised that was it, we now learn we need to pick up the tab for Fannie Mae and Freddie Mac too. But wait a minute..what happened to free market? What happened to that age long republican principle of no handouts? Oh I get it, it is only okay to bail out rich wall street folks and not ordinary people. If you have the right contacts and lobbyists, you will be able to convince a congressman that your company is big enough(courtesy of shady deals, accounting and false statements) that it must not fail. Pray tell, if Bear Stearns is crucial to the economy- I bet 80% of the big boys are. Tax payers picking the tab of course got no dividend check, golden parachute nor are the bosses that ruined these institutions losing sleep that their fraud will land them in the big house. That is the stuff of George Bush led business friendly, people hating administration. But where are the Dems? Have they lost their nerve and backbone to stand up and be counted? This is ridiculous! And by the way, the federal regulator hitting Senator Schumer for stating the obvious is as dumb as George Bush. It is like blaming the person who called 911 for causing the home to burn. This administration is really on rocks!

Today, Pat Buchanan has the nerve to state that GM is losing jobs to overseas market but the fact that the ideology this moron have supported since the days of Nixon is lost on him. When Japanese, European and Chinese manufacturers don't need to deal with rising health care cost, how do you expect their debt bogged down American cousins to fare? Oh well, so much for hating socialized medicine when your citizens need to go to Mexico and India to get treated, and to socialized medicine Canada to buy drugs. These folks should be called out for whom they are: hypocrites! Pat's party killed healthcare for all in the 90s that would have made the auto companies more prosperous and are here trying to blame others for shipping jobs to where visionaries had taken the step to remove the burden of medical cost from corporations. Dumb.

The even more ridiculous fact is that this country today manufactures nothing but debt. My business partners and I had to endure a meeting over the weekend with this guy making a proposal we invest in debt for residential homes. God forbid! You can be sure we turned it down. Today, the country is fighting 2 WARS with borrowed money. Common! That is like borrowing money from your enemy i.e. banks,China and Middle East, and then literally blowing it up. Get this, you are not even using the money on licentious living- you are crapping it. That is what happens to bullets and bombs- idiots. And yet, McCain have the guts to say we are whining? The only 2 industries that are net beneficiaries of this administration is the Defense and Energy industries- go figure! You don't need to trace the previous connections of the big boys in the administration to figure out why that is. You better to move to Texas! Or better still, get ready to ship to Canada. This Titanic is just about going under.

There is something fundamentally wrong with an economic ideology that asks the public to pick up private risks, while ensuring the rich folks keep their money when the going was good. It is a flawed economic theory that the democrats must challenge.

This is a nice read on Bush's busted ownership society...well, before its time.


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