Sunday, October 11, 2009

Economic Crisis: A Failure of Socialism

The Sub-prime mortgage crisis has been blamed on capitalism. This is a bald-faced lie told by those who want to bury capitalism under their own dirty dealings and make the way clear for more exploitation of the average citizen. Let's start from the beginning

The Federal Reserve is a quasi-governmental institution. The only government agency that has the authority to regulate the Fed is the Fed. Fannie and Freddie are quasi-governmental institutions. Their directors and managers were Democrat operatives and fund raisers who made millions on bonuses that have not been paid back in spite of accounting violations. Fannie and Freddie are regulated by the Democratic controlled congress. When the government refuses to regulate itself that is a failure of the government not a failure of capitalism.

The Community Reinvestment Act that lowered lending standards was a government regulation of the banking industry; it in no way represented a “liberation” of the banking industry or a free market; it required that banks make more loans (according to lower standards) to people with bad credit ratings; it dictated those standards to the banks that would otherwise have practiced good lending practices; that is regulation, not capitalism.

Government backed loans offered to people who cannot afford to pay them back is a failure of government not capitalism; it is the government that could not back these loans but yet told a lie that the loans were secure.

Government backed worthless securities sold as investments by Fannie and Freddie to an already over-regulated financial services industry is a failure of government not capitalism; it was government that made people think the securities were good investments when, in fact, they were worthless.

The entire sub-prime crisis is a result of the idea of government re-distribution from the rich to the poor…it was a government-caused crisis, advocated primarily by Democrats and based upon a Marxist premise; not a capitalist premise. Re-distribution is the Marxist idea that government should re-distribute money and power 'to each according to his needs (the poor need homes) from each according to his abilities (investors in banks must pay)'. This is not a capitalist premise.

The people who backed this entire fiasco from Frank to Dodd to Fannie and Freddie to Obama and other Democrats in Congress (who protected the scheme of sub-prime lending and blocked reform of the system) were not capitalists. The very people who are responsible for the crisis are now claiming that it is a failure of capitalism. They are all socialists. It is these people, not capitalists, who should be investigated and prosecuted.

The sub-prime crisis is a failure of socialism.

No comments:

Post a Comment