UPDATE: The bailout bill failed in the House with 133 Republicans and 95 Democrats voting NO.
Larry Kudlow believes the next version to be voted on will be worse. Will the Democrats pass a hard left bill ?
More evidence that the free press is a myth. Too bad. At least I’m 70 years old.
This bailout bill is very worrying. In the 1920s, Weimar Germany made two fatal decisions. One was to rearm with the assistance of the new Soviet Union. Germany was barred from having an Army General Staff, the innovation that had made the Prussian Army almost invincible. They were also severely limited in the size and composition of the German Army. The Soviets allowed German Army facilities and armament plants on their territory.
The second decision was to deal with the onerous provisions of the Treaty of Versailles, with respect to war reparations, by starting an inflation that quickly became hyperinflation. The result was a collapse of middle class confidence. The present housing crisis and the collapse of the financial services industry, due to political manipulation of rules on lending, has had a similar effect on the US middle class. They don’t realize it yet but this new legislation is the first step to fascism. Government, principally the Democratic party and its presidential nominee, is now empowered to choose winners and losers in the financial sector. These people already vote overwhelmingly for Democrats and contribute to Democrats. They have sent money to both sides but the people who created this crisis with CRA got the vast majority.
What does the future look like ? The Wall Street Journal seems optimistic, but I’m not.
We’re also told the government ownership provisions in the bill are narrow enough not to ruin the securities auctions. The government will get warrants to benefit from any market upside in return for buying the securities, and this will probably be reflected in the price the feds pay for the debt. Our Treasury sources say the warrant provision is de minimis enough that it shouldn’t interfere with price discovery, which is one of the major goals of this exercise.
We now have a situation very similar to corporate capitalism but we are about to have a government with veto-proof majorities and a like-minded president that does not believe in capitalism. That is how fascism comes to power. Obama is already threatening prosecution for “misleading” anti-Obama ads. There is some controversy about who is issuing threats but I just saw a Missouri prosecutor threaten those who “mislead” voters with ads. He was on TV and identified as a prosecutor. Sounds like fascism to me.