Hardcart to Hell - A Crisis of Political Economy - 2008 Bailout

[WhiskeyGirl]

A Crisis of Political Economy

Oy, what a mess.

The "mess" of which I speak is, of course, U.S. Political Economy. And make no mistake about it: We are talking about political economy.

The final chapter of the story is that in 2004 and 2005, following the accounting scandals at Freddie, both Freddie and Fannie paid penance to Congress by agreeing to expand their lending to low-income customers. Both agreed to acquire greater amounts of subprime and Alt-A loans, sending the green light to banks to originate them. From 2004 to 2006, the percentage of loans in those riskier categories grew from 8% to 20% of all US mortgage originations. ... The banks were taking on riskier borrowers, but knew they had a guaranteed buyer for those loans in Fannie and Freddie, back[ed], of course, by us taxpayers. Yes, banks were "greedy" for new customers and riskier loans, but they were responding to incentives created by well-intentioned but misguided government interventions. It is these interventions that are ultimately responsible for the risky loans gone bad that are at the center of the current crisis, not the "free market."

That's why, I maintain, it does not matter one iota who gets elected President. The emphases might vary slightly under Obama or McCain, but the fundamentals of U.S. political economy, and, I should add, U.S. foreign policy, will not change. Indeed, even for those of us who view the current Bush administration as the worst in our history, well, certainly the worst in our lifetime.... it is clear that nothing proposed by Obama or McCain is going to change the structural defects of this system.

It is the government's monetary, fiscal, and global policies that have created insurmountable debt and record budget deficits, speculative booms and bubble bursts. In such a "crisis of global statism," nationalizations and bailouts are not the only goodies in this "rescue package," being wrapped up as an unwanted gift for taxpayers. And because there is an organic link between domestic and foreign policy, be prepared for even more tragic fiscal and monetary irresponsibility at home, and an ever-expanding institutionalized war abroad.

Indeed, the "ultimate decision-makers" of U.S. political economy have a host of new battlefields on which to wage war, both literally and figuratively, in their efforts to stabilize the ship of state. None of the choices being offered will challenge their hegemony or topple them from their positions of power.

But a war beckons; it is primarily an intellectual and cultural one, and it must begin by questioning the fundamental basis of the current system---in any effort to overturn it.

read more here -
http://www.nyu.edu/projects/sciabarra/notablog/archives/001540.html

What has Obama proposed to fix the fast track to slavery for Americans, in the present and in the future? 

How many new 'gifts' will taxpayers get from the next administration?

Will the next administration be any better at recognizing and fixing problems when they arise?  Did they do ANYTHING to fix Fannie/Freddie in the past?  Or, did they just raise the speed limit for the hard cart of financial hell?