Who Needs Regulations When You’ve Got a Golden Parachute? by Ralph Nader, and A Temporary Respite from Permanent Decline by Paul Craig Roberts: Both via counterpunch.com.
The interesting point is the comparison of the two articles. Paul Craig Roberts was…
…Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions. He can be reached at: PaulCraigRoberts@yahoo.com.
While Ralph Nader, the Democrats favorite boogeyman, is an icon of the left known for his strong advocacy for consumers over the years.
Roberts’ key point:
The Treasury already has to borrow $600 billion a year to finance the operations of the US government. How much in addition will the Treasury need to borrow, or co-sign, in order to keep the two companies afloat and to keep mortgages from defaulting?
The total could be greater than the US Treasury’s credibility.
So here we are. On Monday September 8, 2008, the value of common Fannie and Freddie stock dropped to under one dollar – just one day after Secretary of the Treasury announced the government takeover. White House Press Secretary Dana Perino said, “[F]or years we have encouraged Congress to put in place a strong, independent regulator to oversee the institutions. We believe the actions will help to improve conditions in the housing market.”
Senate Banking Committee Chairman Christopher J. Dodd , D-Conn has questions for the Administration, so there is more to be revealed. And, reporters are spilling buckets of ink talking about the takeover of Fannie and Freddie and the lack of proper oversight by regulators and Congress which brought us to this day of appreciation for regulation. Too bad it is all a little late for the small shareholders, and pensioners and taxpayers who pay the bill for speculators and executives, many of whom seem to escape with lots of money.
Both seem to think this is a bad sign for the economy and both seem to not be sure that the bailout is going to work in the long term. If their pessimism proves to be warrented, we’re in for a really bad time economically.