Posted on 10/12/2008 3:49:47 PM PDT by DeaconBenjamin
WASHINGTON: As international leaders gathered here on Saturday to grapple with the global financial crisis, the Bush administration embarked on an overhaul of its own strategy for rescuing the foundering financial system.
Two weeks after persuading Congress to let it spend $700 billion to buy distressed securities tied to mortgages, the Bush administration has put that idea aside in favour of a new approach that would have the government inject capital directly into the nations banks in effect, partially nationalizing the industry.
The Treasury Department's surprising turnaround on the issue of buying stock in banks, which has now become its primary focus, has raised questions about whether the administration squandered valuable time in trying to sell Congress on a plan that officials had failed to think through in advance. While the Treasury says it still plans to buy distressed assets, the scope of that plan is unclear. Treasury secretary Henry M Paulson Jr has refused to say whether the capital infusion programme for banks would be bigger than the original plan to buy troubled assets.
Still, Treasury has directed Fannie Mae and Freddie Mac, the state-owned mortgage giants, to ramp up their purchases of hard-to-sell mortgage bonds, in what could be a speedier and less formal process than the auctions proposed by the Treasury. Underscoring the gravity of the situation, President Bush convened an early morning meeting at the White House on Saturday with finance ministers from the Group of 7 industrialized countries. "All of us recognize that this is a serious global crisis, and therefore requires a serious global response, for the good of our people, Bush said.
Bush said the countries had agreed to general principles to respond to the crisis, including working to prevent the collapse of important financial institutions and protecting the deposits of savers. But he offered no details on other measures, suggesting that there were still differences among countries about which steps to take to shore up their respective financial systems.
To some extent, the effort to agree on a coordinated plan is being driven less by the hope that such measures will carry more punch than by the fear that nations acting alone could destabilize the system. Those worries grew in recent days when Iceland seized its three major banks, which were failing, and appeared to guarantee the deposits of Icelanders over those of foreigners. That provoked a fierce reaction from Britain, which is now in talks with Iceland to get back the deposits of British citizens.
With US and Europe working together on ways to secure their banking systems, economists are concerned that money may flow out of other countries, particularly emerging markets, to Western countries if investors decide that those markets are not as safe. Germany has been reluctant to put state capital into banks, though officials said there were signs of movement in that position
Apparently, to some, Socialism is acceptable if it is forced upon us by a Republican.
The government causes the problem, the government tries to fix the problem.
How reliable is the source — I don’t have a clue.
The fact that the first bailout won’t work was easy to see. I guess this is plan ‘b’. And Peloser’s free money is plan ‘c’.
Ronald Reagan is rolling over in his grave.
that’s what eventually happens when the $ is based on nothing.
The worst part of this is that somehow the label of “conservative” has been tied to Bush, who has not been a conservative at all. So now if you try to sell conservatism to the general public, they think of the big government, borrow and spend policies of Bush and the Republican congress. This has been horrible for the conservative movement.
Well..., we’re in the Great Depression again (it will build throughout this year and into next year...).
I was wondering if I would ever see the day, having heard so much about it from my grandparents and my parents — and here it is — melt-downs of a historic and catastrophic nature all over the globe, enough to get the entire world to working together on a *global finance system* (yes, that’s coming...).
Jackson ... President Jackson .... call on line one ... you’re needed in the oval office again .... President jackson ... call for President Jackson .................
You said — “This has been horrible for the conservative movement.”
Well, besides being horrible for everyone..., yes, Great Depressions are horrible, most of the time, for conservatives... LOL...
George Bailey to the crowd, during the run on the Bailey Savings and Loan, in
It's a Wonderful Life (1946)
I couldn't agree more. We have to start making the distinction between big government conservatives and the small government conservatives.
It is correct because unless implemented funds will be drained from US banks off shore to places where soveerign banks guarantee deposits.
The process began in Europe and deposits flooded from continental countries to Ireland where they were government guaranteed
Money is but electronic blips and can be moved in an instant
There is a panic
Andrew Jackson, Bank Veto Message, July 10, 1832
The present corporate body, denominated the president, directors, and company of the Bank of the United States, will have existed at the time this act is intended to take effect twenty years. It enjoys an exclusive privilege of banking under the authority of the General Government, a monopoly of its favor and support, and, as a necessary consequence, almost a monopoly of the foreign and domestic exchange. The powers, privileges, and favors bestowed upon it in the original charter, by increasing the value of the stock far above its par value, operated as a gratuity of many millions to the stockholders....
The act before me proposes another gratuity to the holders of the same stock, and in many cases to the same men, of at least seven millions more....It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners. By this act the American Republic proposes virtually to make them a present of some millions of dollars.
Every monopoly and all exclusive privileges are granted at the expense of the public, which ought to receive a fair equivalent. The many millions which this act proposes to bestow on the stockholders of the existing bank must come directly or indirectly out of the earnings of the American people....
It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class.
Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country? The president of the bank has told us that most of the State banks exist by its forbearance. Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace and for the independence of our country in war? Their power would be great whenever they might choose to exert it; but if this monopoly were regularly renewed every fifteen or twenty years on terms proposed by themselves, they might seldom in peace put forth their strength to influence elections or control the affairs of the nation. But if any private citizen or public functionary should interpose to curtail its powers or prevent a renewal of its privileges, it can not be doubted that he would be made to feel its influence.
It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society the farmers, mechanics, and laborers who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles.
Nor is our Government to be maintained or our Union preserved by invasions of the rights and powers of the several States. In thus attempting to make our General Government strong we make it weak. Its true strength consists in leaving individuals and States as much as possible to themselves in making itself felt, not in its power, but in its beneficence; not in its control, but in its protection; not in binding the States more closely to the center, but leaving each to move unobstructed in its proper orbit.
Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy....
1835; Jackson withdrawals government’s money from the National Bank. (Federal Reserve)
1836; Jackson pays off national debt by using real money instead of reserve type notes.
Yeah, I meant horrible for “Conservatism” too — because everyone is “going down the tubes” (well not everyone, but “enough”). And that’s disaster for Conservatism — because (face it) — people are going to be looking out for themselves and their families first — before any idealogy.
That’s the way it goes...
For years the Dems have been screaming that Bush is an idiot. You really do not know how hard it is to say they were right.
There, now that did not hurt as bad as I thought it would.
Bush is not a conservative. He is a big government Republican. Germany is the father of the modern socialist state. But as the article states,
Germany has been reluctant to put state capital into banks, though officials said there were signs of movement in that position".
So socialist Germany doesn't want to nationalize its banks, but the Bush administration is planning to do just that. This is really bizarre. Bush the Socialist.
We need a war. I mean a REAllY BIG war. Start throwing nukes around and get people’s minds off the economy.
In completely unrelated news, Venezuelan scientists announced they have invented a machine that allows the consciousness of Hugo Chavez to take over the minds of other world leaders.
Really? You want a nuclear war? Could you wait ‘til I move out to farm country? Right now, I get my food from Kroger’s. And somewhere I heard nuclear war might be bad for Kroger’s.
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