[kj] OT- I couldn't help but to think of the West

[B. Oliver Sheppard]

To wit:

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=03&year=2008&base_name=media_overlook_fed_bailout_in

Here's one gist: Bailing out financial institutions, ie. corporate 
welfare/welfare for the rich, is different than kicking the sods who got 
their institutions into trouble to begin with (poor managers, by 
standard free market ideology, who drove their entities into the 
ground)because the US bailout package will keep the current 
multimillionaires, etc., in charge of their nstitutions, or at least 
leave the prerogative with their boards of directors, major investors, 
etc, on how to handle the restructuring, if any.

When England's Northern Rock failed, the managers who drove that bank 
into the ground were tossed out on their ear, and the state took over 
the bank, which enabled it to keep its commitments. In other words, if 
the institution is THAT crucial, let's not take a chance, and remove the 
llows who are the helm of the sinking ship. That is not what is being 
done in the US. It could be, but the stubborn ideological resistance 
("it's communism" or something) to it prevails (so far). But the 
socialism that allows 200 billion to go to these guys to help them keep 
their mismanaged sinking ships afloat is magically not socialism. 
Because it helps out the right people -- the already-wealthy.

The piece above explains it pretty well.

-Oliver



B. Oliver Sheppard wrote:

> TB, the piece I linked to by Dean Baker deals with what you are 

> talking about -- "if the financial institutions start going under, 

> it'll spread, contagion, etc, etc."

>

> Well, there is a way to fix that. Do what England did with Northern 

> Rock, which went under. That is, take it over, and kick the owners out 

> on the street, so that the bank can continue to honor its commitments 

> without retaining multimillionaires and their salaries on board as is 

> being done now.

>

> That is ideologically unthinkable to many Americans because that's 

> "socialism." but apparently funding these same guys and keeping their 

> bank afloat is not. It'd be nice if folks read stuff I posted instead 

> of basically ignoring it and responding to straw men.

>

> -Oliver

>

>

> T.B. wrote:

>> In this case of several lending institutions getting aid from the 

>> Feds, I don't think it's so much knowing the "right" people, it more 

>> the fact that if major banking institutions start going under, it 

>> will have a tremendous domino effect on every facet of our economy.