Tuesday, September 16, 2008

Moral Hazard, My Ass

The Fed was unable to broker a deal to get anyone in the private sector -- anyone -- to loan money to AIG because it wasn't a sound business venture, because it wouldn't make any sense to throw good money after bad, because nobody really knows just how big the hole is.

So what did the Fed do? The Fed decided that the US taxpayers would have to step up and save the day by eating yet ANOTHER bite of the big shit pile. You know... the big shit pile that the private sector won't touch with a 10 foot pole? We just gave it $85 billion. On top of the F&F bailout that put taxpayers at risk for $25 billion. On top of $29 billion Bear Sterns bailout. And nobody really knows if $85 billion is enough!

Here's a number to add some perspective to this mess: The actual 2007 budget allocation for re-training workers displaced by the global economy was $150 million. Get it? Corporate welfare for Wall Street totals BILLIONS but the poor slobs who got kicked to the curb so Corporate America could maximize their profits (yay, globalization!) got $150 million to put their lives back together. Republican "bootstrap" philosophy apparently only counts for people who pay payroll taxes.... the investor class must be protected at all costs. And social security is EVIL.

But what really pissed me off today is that as soon as Wall Street caught a wiff of a Fed rescue, what happened? Why a rally, of course!

Hey man, let the party continue.

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