September 15, 2008

But you voted for it, Senator...

Think Progress has a great hit up about Palin and McCain's support of the Agency bailout (I'll post my thoughts in the supersize).

In an op-ed in yesterday's Wall Street Journal, Sen. John McCain (R-AZ) and Gov. Sarah Palin (R-AK) reluctantly endorsed the federal takeover of Fannie Mae and Freddie Mac, arguing that the two institutions' lobbyists are the "primary contributors to this great debacle." McCain and Palin wrote that, should they be elected, their administration would "no longer use taxpayer backing to serve lobbyists, management, boards and shareholders."

Here's the thing, John. You VOTED, over and over again, to deregulate. Because you thought that would free up the Invisible Hand and we'd all be better off. Lo and behold, you and the other Republicans discovered that what the Democrats knew and were SCREAMING all along was right... business needs oversight because left to it's own devices, it'll foul it's own bed.

Now that it's all come crashing down, you can't admit your error and are, like a degenerate gambler, doubling down in an all-or-nothing effort to deflect blame and avoid the inevitable conclusion that your ideology is a bankrupt as the banking system.

But, I guess I'd do the same thing if so many of the staffers, senior advisers and FRIENDS were lobbyists at one point or another for the Agencies. You should be proud, John McCain. You've mastered the art of talking out of both sides of your mouth.

As for the bailout, I'm pretty disappointed but not really surprised. For one thing, there were easier ways to inject capital into Fannie and Freddie without taking on as much risk or wiping out the poor shareholders. I am THRILLED to see management turned out of both companies as I had absolutely no respect for either of them. All in all though, the Friedmanites engineered their chance and now Fannie and Freddie are on the chopping block.

What kills me about this is that it was purely and simply a crisis of confidence. People were afraid the government wouldn't backstop the Agencies which forced them to do just that. And then there is Lehman today which is reporting close to $640 bn in assets and a little over $600 bn in liabilities. Sounds good, right? We'll see how much of that is marketable and how much is pure level three and untradable at any price. I'd also like to know non-performance in the mortgage pools. But that's just my curiosity... I have a feeling that as bad as things are, they ain't that bad.

What brings down a bank like Lehman is the same thing that brought down Bear and would bring down any investment bank. Their funding, the money they need to revolve to float their balance sheet, evaporated. Without it, the bank couldn't survive. The fun part of all this is figuring out how much of this was Lehman... and how much was the result of it's financiers getting cold feet (not to mention it's counterparties).

This should SOLIDLY put the lie to all those morons on the right who think everything would be better... without as much regulation. As predicted, no regulation means common sense is replaced with raw greed and poor credit decisions. Discipline, when billions are involved, goes out the window when their is no examiner coming into your office a few times a year to make sure you haven't gone hog wild.

Posted by mcblogger at September 15, 2008 08:57 PM

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McBlogger Sez: "You should be proud, John McCain. You've mastered the art of talking out of both sides of your mouth".

I would only add one thing... He's mastered the art of talking out of both sides of his mouth as well as blowing it out his ass! McCain has become one of the most despicable excuses for a human being that I have ever observed... and that's a lot considering the garbage from George Bush for the past 8 yrs.

I cannot imagine wanting any public office or anything else so badly that I would become such a vile person. Heaven save this country from this nasty person and his cohorts.

Posted by: Magginkat [TypeKey Profile Page] at September 16, 2008 08:54 AM

Oh, I think the country is rapidly making the decision that "we're done".

Posted by: mcblogger [TypeKey Profile Page] at September 16, 2008 09:04 AM

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