Is why, combined with the Bear Sterns bailout, I have left the Republican Party. Make no mistake about it, this move by Paulson on Sunday does much more for the bond holders on Wall St. and around the world than it does for the American taxpayer.
I am familiar with the counter argument that this move was necessary to keep the mortgage industry from crumbling and causing a panic in the markets. Obviously, a market correction is not fun for anyone, but ultimately these poor investments need to bear losses on someone and I would prefer China or Japan suffer the loss in bond value. The stock holders were crushed by this move. Why not the bond holders?
We are now in a time where Paulson is being praised for a move that once again challenges the free market economy we Americans hold dear. I cannot believe I am actually saying this, but I agree with Jim Rogers statement that this is a communist type move intended to benefit the rich.
Think about it. Who are going to suffer the greatest losses under this plan? The bond holders are now protected by the full faith and credit of the US government. The share holders have lost 97% of their value and all ownership voting rights! This is a bad deal, shortsightedly structured to prop up the market.
I wonder if history will look at this moment in time as the point where the free market stopped, and socialism began. If our leaders in Washington continue to bail out their rich buddies with deals like this, the middle and lower classes will have no choice but to counter act their nefarious plans. Unfortunately, my fear is that the counter punch will be election of leaders like Obama who is hell bent on creating a form of socialism 180 degrees the opposite of the Bush plan. The problem is, us in the middle will still be paying the freight. We will be treading water the same as today, just in a different pool.
God Bless America,
EG
erik@exchangeyourgovernment.com
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