Tuesday, March 18, 2008

Welfare for Wall Street

photo from Associated Press/Henry Ray Abrams

When your children one day ask what the hell this country was thinking, don't say we didn't warn you. In regards to The Fed's collusion in assisting J.P. Morgan with purchasing Bear Sterns Co., here's how the federal government would like to paint this shameless example of corporate welfare disguised as fiscal responsibility:

They're avoiding or at least curbing the beginning of a fiscal meltdown in the banking and finance industries.

Here's how Bear Sterns' shareholders (30% of its stock is owned by the firm's own white collar employees) are painting the bailout, uh we mean buy out:

The poor shareholders aren't being fairly compensated with the company being sold at such a low price ($2 per share) and many may lose their jobs.

Here's how Onyx Cranium sees it:

We are not happy to see people lose their jobs, but we do believe that in a RECESSION that often happens, so it is to be expected. The federal government is working OVERTIME through this deal (and much less publicized others) to save corporate America's ass while throwing middle and low-income tax-paying individuals a bone. Bear Sterns, numerous hedge funds and others in the securities and mortgages business were gambling just as much as people who took the risk that they'd be able to pay their adjustable rate mortgages. And please understand that it goes beyond the subprime market. These companies assume UNFATHOMABLE debt and bet on manipulating opportunities in the stock market to turn enough temporary profit to pay that debt back and then get more. And so how does the federal government behave under a Republican administration that touts letting "the market operate without interference"? Well, as usual, they completely excuse the rule when the money of rich people is at stake. And one can make it seem that it's about saving the entire economy and not panicking the global market (too late), but it's nothing more than old fashioned corporate welfare that will make J.P. Morgan Chase a shitload of dough. As if they needed more. Let's see what kind of RIDICULOUSLY low-interest loans the Fed is willing to give individuals who are struggling due to poor financial choices right now. Our guess: $0. But we could be wrong. (We're not though.)