The President Says No to Socialism, For Now
Posted by JimTry this experiment: watch Fox News and count how many times you hear “socialism” in an hour. The Fox talking heads are assuming that Mr. Obama is not only a puppet of the ghost Karl Marx but is leading this nation down the road of ruination.
Yesterday’s latest bailout plan, the public-private partnership to buy bad mortgages, is anything but left-wing. In fact, many leftists probably feel a bit betrayed as the miscreants in the melt-down are given their free pass and are in fact invited back to the party.
This makes perfect sense to pragmatists. I am all in favor of allowing the private sector to sort our the mortgage-derivative-collateralized debt obligation-AIG nightmare. After all, they created it and probably can at least value the remains. The bonus in this package is that taxpayers will share in the gain, and I surely believe there will be profit.
Consider that 85% of mortgages are current. This should mean that the toxic assets are really only slightly bad. When the meltdown started last fall the assumption was these assets were worth pennies. I suspect they will end up worth more like 80 cents on the dollar. If the private investors wisely manage the disposition and operation of these mortgages and properties, there will indeed be profit for us and them.
I watched the Resolution Trust Corporation single-handedly destroy a lot of people’s net worth in the early 90s. By unthinkingly dumping property on the market that drove down further the price of real estate. And that led to more foreclosures and more bank failures. This will not happen this time around, not with the profit motive.
