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    • And The Mass Evictions are ON
      So, the evictions moratorium expired Saturday at midnight. Over a quarter of renters are behind in some states, according to the Center on Budget and Policy Priorities think-tank. Southern states are some of the worst affected, though some 16 percent of US households owed rent — about double the amount before the pandemic. This wasn’t necessary, but the choi […]
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We already practice socialism

1928-great-depressionthumbnail.jpgScarecrow at FireDogLake has a sobering post this morning. The Republicans are well on their way to making over the US economy in the Iraq model. We are headed into a recession, boys and girls, and it will be a hard landing, complete with rampant inflation, tight credit and a falling dollar. Congratulations, George! You have managed to compare favorably to Hoover. Nice!

Both NPR and Marketplace: Morning Report had extensive coverage of the takeover of Bear Stears by J.P. Morgan this morning. Over the past week, Bears Stearns, “not the nicest bank in town”, went from trading at $30/share to $2/share. And the scary thing is that Bear Stearns investors might have gotten more than the bank is worth at $2. Now, Morgan turns around and borrows the money from *us*, the taxpayers, to buy Bear Stearns. So, essentially, we now own a worthless company, but the people who drove Bear Stearns into the ground are not going to go bankrupt. Hallelujah for them! Not so much for the poor home owners who were suckered into paying extravagant prices for modest housing by getting an adjustable rate mortgage with a teaser rate. Their investments are worth less than the mortgage and they can’t unload it on the government like J.P. Morgan can. So, what we have here is socialism for the rich where we redistribute tax payer wealth from the people who work to the people who invest. What a sweet deal for the well-heeled.

At least one of the interviewees this morning makes this point and goes one further. He says we ought to let the market take care of itself. The impact will be deep if the investment community starts to go bankrupt but it will be soooo much worse if we keep bailing them out. When will they ever learn? What’s the worst that can happen other than some very rich people become suddenly not so rich? If we keep them above water, we just cover up the rot at the hollow core of the finance industry. Cut them loose, let us take the hit and get on with rebuilding.

And it goes without saying that when the $#@% hits the fan, you aren’t going to want a neophyte or a economic lunkhead (by his own admission) be in charge of the fallout. I suspect you want someone who’s actually seen a crisis up close and personal to be in charge.