What justification are fiscal conservatives offering to justify the current bailouts of various players in the financial markets? Isn’t the extent of the government’s actions akin to socialism?
I’ve always thought it awkward for Republicans to offer themselves as fans of small government and reduced gov’t spending - instead, they seem to just wish to spend huge sums of money on certain things and not others.
I’ve got the same question. I’d love to see how this gets explained on a ideological level.
Is it simply a product of what could happen if it’s not done?
Frankly, there’s enough in this mess to disgust conservatives and liberals alike - which probably shows that it is a pragmatic solution and not an ideological one.
That is especially so in the case of Fannie Mae and Freddie Mac - which were permitted to operate as freewheeling enterprises, racking up the rewards of extreme risk taking while assuming all along that the government would cover them if things went to hell. Lots of times, it seems, well-meaning people looked to reform this in the last few years, only to be thwarted when these operations threw around lots of lobbying money.
Some Republicans are mad about it.
Maybe they are just more mad about not being consulted.
Of course it is an election year and realpolitiks suggests they need to save the economy as it will hurt them more than the Dems in the upcoming election.
One could also argue that these entities are simply too large to be allowed to fail. At least when considering the seeming domino effect of these huge firms going down. That causes people to have a crisis of faith in the markets and everyone starts bailing. That is what got us the Great Depression. Nipping it in the bud may halt that.
Note I am not saying it should or should not be done…certainly a debatable point.
I’d just like to see the outgoing CEO NOT get a $7 million severance for three months of work but that is another debate.
I think another thing we can agree on is the complexity of the ball of shit the situation is. It’s part Freddie/Fannie, but there’s also the subprime mess, regulation/deregulation…it’s just a lot of stuff that all came to a head at the same time; of course, it’s all related as well.
I don’t know if there are any fiscal conservatives in leadership in the U.S. GWB has been spending like a drunken sailor for 7.5 years. Idiot Bernanke famously said that he would “drop money from helicopters” to stabilize interest rates, etc.
No, of course no fiscal conservative could be happy with taking on what amounts to a trillion dollars of debt/obligations, all to prevent the market from clearing. Adam Smith would not be happy. Nor Von Mises.
What Marx and Lenin couldn’t do, a Republican administration has achieved.
I agree - plenty for just about everyone to object to. But it always surprises me to hear folk claim to be fiscal conservatives - and yet favor huge military expenditures. Or object to social spending on certain issues as creeping socialism, while supporting spending on programs that are consistent with their lifestyle.
Conservatives hate welfare. Unless it’s corporate welfare. Especially when it’s corporate welfare that benefits them personally.
None. Most the fiscal conservatives are being quite loudly (and somewhat obnoxiously) opposed to it.
All depends how pragmatic you are I suppose. Most fiscal conservatives concede the bailouts are necessary, as the alternative would be worse. Idealogues oppose it anyway.
The Controvert, anyone who supports corporate welfare isn’t a fiscal conservative, even if they say they are.
In general you are quite correct. I’m definitely opposed to government bailouts (both for private citizens AND for business). If a business can’t hack it then they should fail. If businesses rely on the government to bail them out then there are going to be distortions in the market because they will do things with that in mind.
Couple of things though. For one thing, part of this mess we are currently going through is BECAUSE of the government and distortions they put in the housing market (and the banking aspects). For another thing though we are talking about what could be a cascade event if something like AIG goes down where the end result of doing nothing could be disasterous…after all, we are talking about a company with assets (IIRC) at over a trillion dollars. That’s real money, even to the US.
There are times when the government has to step in because the problem is simply to big to work itself out. The irony though is that a big part of this problem stems from the government sticking it’s nose in and ‘fixing’ things in the first place…unintended consequences and all. Sort of like the philosophy that everyone should be able to get a house of their own, regardless of if they can actually afford it or not. It SOUNDS like a great idea (to some) at first…but it has a ripple effect of unintended results later down the pike.
Well, I’m not sure how seriously you thought the current crisis was, but to my mind we were pretty close to the brink there and I was serious worried on Monday. Today I’m…less so. I guess what I’m getting at here is that, at least from my non-economist perspective it was a matter of the government stepping in or our economy going into free fall. When those are the stakes I think maybe philosophy has to be set aside, ehe?
-XT
So is the looming health care disaster, but we don’t see conservatives clamoring for universal health care. At least not until a complete meltdown of our health care system is inevitable, and the stockholders see their investment threatened. Then it will suddenly require a government intervention to prevent the entire health care system from imploding. And they will all becoming card-carrying socialists as far as the risk is concerned.
They aren’t the same thing at all. And this leaves aside the debate about whether there is a ‘looming health care disaster’ on the horizon, and whether or not UHC would do anything to ‘fix’ it even if there was.
Um…no. AFAIK none of the health care systems in the US is tied into our economy so closely that if it failed it would send the rest of the economy into free fall. Nor do I think any of the health care providers has over a trillion dollars in assets, nor are any of them so closely tied into peoples every day lives that if it failed it would effect millions of people.
You are making an apples to oranges comparison because you have an agenda, frankly.
How? How would the entire health care system implode? How would UHC ‘fix’ this so it wouldn’t happen? Why would the government need to bail it out if it did happen? Do you figure that if the various HMO’s went tits up that the doctors would stop seeing patients? That the hospitals would shut down?
-XT
When taxes are raised because of this huge bailout ,the repubs will stroke out. Unlike the war ,they will want to pay for this 1 1/2 trillion dollar fiasco.
Only Nixon could go to China.
To torture a paraphrase: conservative ideology isn’t a suicide pact (Bush admin notwithstanding). The current crisis has a real chance of trashing the world’s economy. There’s nothing irrational about believing that, under normal conditions, less restraint and intervention in the free market is better, while favoring a massive, life-saving intervention in dire times. The economy has to function in order to function in ideologically conservative ways.
There’s also a more pragmatic distinction between normal and abnormal circumstances: free market Republicans won’t have a chance to deregulate if the conservative movement as a whole is destroyed by having the meltdown of the world’s economy happen on their watch, when they could have prevented it.
So, gonzo, you were willing to simply let the entire economy fold, ehe? It’s only evil Repubs who will ‘stroke out’ on this issue?
Correct me if I’m wrong here, but it looks to me as if the Democrats in Congress were ALSO in favor of this bail out…as was the current Presidential candidate for the Dems, that Obama guy (maybe you’ve heard of him?). They in fact want the bail out to be more in depth (Obama wants to make sure that ‘Main Street’ isn’t forgotten when it comes to handouts).
-XT
So now there is no daylight between the conservatives and the godless liberal socialists in the Democratic party. Let us hear no more about how superior conservative economics are.
When this first started my reaction was “To hell with them. Let them fail.” After my initial reaction I reluctantly admitted to myself that it was a bad idea. My ideology won’t prevent me or the rest of you from being flung over the abyss when we let these companies fail. They’re saying that these companies are “too big to fail”. They are. How they got that big is something that might be worth addressing, but since the damage is done the aftermath must be addressed.
Oh, to be sure…no difference at all. 
So, ‘Let us hear no more about how superior’ <liberal> ‘economics are’, ehe?
-XT
I can’t answer for gonzo of course but while I see a legitimate need for the bail out (much as it sucks but it is what we are faced with) I’d like to see the Repubs attach strings to those bail outs. How CEO and others can walk away wealthy after tanking so badly and leaving me to bail them out is beyond me. Not sure what can be done about CEO/Executive payouts at this point but I’d like to see something that does not reward their ilk in the future for walking into such a catastrophe. If they think they are truly worth their insane big buck compensation packages then seems fair they bear responsibility for when it tanks.
Of course add in some regulations and transparency as well. Yeah I know that is anathema to Repubs but opening the loopholes and easing restrictions certainly helped allow this to happen as well.
THEN I will be ok (well, more ok) with the bail out. Still sucks anyway you slice it.