When the Government Plays Favorites

[Clementine]

Particularly interesting is the "moral hazards", which are situations the government creates that will end up costing the tax payers billions. The bail out and many smaller things are designed to keep the average American a slave to government through higher taxes and a crushing debt.

One example of the moral hazards given here is when people, who have considerable means, build a fancy home on the edge of the beach. Of course, it's a matter of time before a tropical storm or hurricane levels the house, but the home owners don't lose. It's the tax payers who foot the bill because of government programs that protect people who make risky decisions. As soon as the wealthy people receive more money, they rebuild in the same spot, knowing they are covered for next time. Homes are expensive, but imagine the cost of those fancy hotels that line the beaches.

The government protected the risky loans after forcing banks to make no-doc loans to people who likely had no business taking out a mortgage. But they did and we are still paying.

Banks were considered too big too fail. I think we should have let them fall on their face to teach them a lesson for taking such stupid risks. Why did they play fast and loose with all that money? Because government had their backs. If not for that, wiser decisions would have ruled the day.

The people responsible for the financial crisis are congress, past and present and all the presidents. They called the shots. They chose who to favor. They chose to rob the tax payers to fund Wall Street. This isn't the left vs right. This is about the people vs a government who has long been in bed with the same corporations they now call evil.

Everyone has heard the phrase, "Divide and conquer." People, we are already divided and ready to be conquered. Time to start calling people out, regardless of party lines.

The political class claims the economy would have been destroyed in 2008 without a bailout of the big banks. Stockman says that's a myth: "The Main Street banks were not going to go into a huge retail bank run ... and (Fed chairman Ben) Bernanke is totally wrong when he says we were on the verge of Depression 2.0. We weren't close. We would have worked our way through it. We've done it many times in history."
Worked our way through it? Without the bailouts, there might have been a bigger stock market drop, and more businesses would have closed! But Stockman says, so what? It would have been worth it. And I agree with him.
Today, taxpayers would be $1 trillion richer and not on the hook for trillions in loan guarantees. Prices would now have found a natural floor, business would be eagerly hiring again, and America would be free of moral hazards like "too big to fail" banks.

When the Government Plays Favorites
Government continues to threaten our future while claiming to help us.
When the Government Plays Favorites - Reason.com

 

[Clementine]

After creating lame regulations overseeing the banking industry, refusing to allow a group of senators numerous times over the years from looking closer at regulations and oversight regarding Fannie and Freddie and then stealing from the tax payers to bail out Wall Street, can how anyone really believe that government ever wanted to fix the problem? They just wanted to cover their own butts and stay true to their friends who probably helped get them in office.

Another quote from OP link:

When the housing bubble burst, politicians got panicked calls from their friends on Wall Street -- in many cases former colleagues. Instead of letting their old friends take big losses and trusting smaller banks to expand and take their customers, the political class propped up risk-takers who made bad bets.