Today Treasury Secretary Henry Paulson has presented to the American people a plan that would bring more regulation into the American financial system.
Capitalism is the cornerstone of our great Democracy. I am sure many people are applauding this as a way to get back at the “rich”. The regulations and systems of checks and balances have been round for many years. They have done what they were enacted to do, make America prosper. In recent years the government has decided to put their hands into the workings of the market. Whether making laws that obstruct business (the accounting overhaul after Enron and Worldcom) or giving publicly owned business billions of dollars (Bear Stearns).
Many people complain that it costs so much more money to have their businesses audited for accounting purposes than it did before. Thus, raising prices and in a lot of instances it hasn’t helped. Bear Sterns had some creative accounting going on to help them show that they were turning a profit even though they hadn’t in sometime. Of course, that is only one aspect of the problem with Bear Sterns. The market forces have dictated that Bear Sterns goes out of business. The Federal Government, has decided that they will save this huge company by propping it up and letting a competitor buy it for pennies on the dollar. Did this go through normal regulatory channels, no. The Federal Reserve decided that they would just give Bear Stearns and its new owner JP Morgan Chase 30 billion dollars. This is not a loan. They just gave them thirty billion dollars. Just say thirty billion dollars. Our government is giving money to corporations that are going out of business and were dismantled financially by their leaders. Enron’s leaders were brought up on charges. How come Bear Sterns leaders are not being investigated? It would seem that the people at Bear Sterns and JP Chase Morgan knew the right people in the government to bail them out of their corporate pillaging.
Upon further investigating, or just looking around the web, I see many powerful companies owned quite a bit of Bear Stearns stock. Maybe that is why the Fed stepped in and GAVE 30 billion dollars to a failed company and its buyer. JP Morgan Chase has only taken twenty-nine billion dollars of the thirty billion dollars offered. How nice.
Here is the list of big shareholders from Wikipedia (remember its wikipedia)
The largest Bear Stearns shareholders as of December 2007 are[3]:
Barrow Hanley Mewhinney & Strauss – 9.73% of the company
Joseph C. Lewis – 9.36%
Morgan Stanley – 5.37%
James Cayne – 4.94%
Legg Mason Capital Management – 4.84%
Private Capital Management – 4.69%
Barclays Global Investors – 3.60%
State Street 3.01%
Vanguard Group – 2.67%
Janus Capital Management – 2.34%
Legg Mason Funds Management – 1.95%
Fidelity Management- 1.93%
Putnam Investment Management – 1.90%
Neuberger Berman – 1.55%
UBS – 1.54% *
The sub prime mortgage “crisis” is a small part of what helped bring down Bear Stearns. They had their hands in many different pies that all seemed to go bad at the same time. Once again I ask, Why aren’t these guys being investigated? The major shareholders still got screwed and they are not asking where is our money? Or why are these guys still walking around among us? They should be in prison.
The government has set a precedent that if you are failing we will bail you out. This is communism. They say they are not asking for the money back but, what will they ask for in return. Will they want to put some bureaucrat on the board or as CEO or CFO of the corporation in effect making the company a government entity? This scares me to death. This is how corporations are run in China. This is what the Russians are attempting to do in their country. Their corporations are run by party people, who answer not only to shareholders but the central government. If this is what the Feds are trying to do, then they should let our armed forces own companies. The Chinese Red Army owns many companies that they use to try and undermine other nations.
Michael Savage today gave me the answer to that question. He stated, he and I hope he is wrong, that the government is persecuting the Marines because the Feds know that if the push came to shove the Marines would not allow them to destroy America. That is paraphrased and put into my own words, but he sparked the thought. However paranoid it may be. Our Armed forces used to believe in the United States. I am not so sure now. The Feds see still see the armed forces as something evil. So they would do all they can to not allow them to become more powerful than they are now. By giving them the means to make money on their own.
We as conservatives feared that AL Gore or John Kerry would become the President of the United States, but is George Bush and his group any better? With AL Gore we know that we would not be in any wars, but we would have lost many more people on our own soil. John Kerry would be doing the same thing as President Bush. You can’t just leave Iraq. He knew that and the democrats running for office know this.
The democrats are saying that the proposal for the Fed to have more control over the markets doesn’t go far enough. Of course, they know that you have to take small steps to take away what makes the United States great, freedom. They only say it doesn’t go far enough, because they want to make their simpleton constituents to feel good.
Secretly, everyone in the government is trying to take more control over our capitalist society. They don’t realize that the reason they are in the positions that they are in because of capitalism. Allowing Bear Stearns to fall and whomever invested in them to lose their money, will only help strengthen and move the economy forward. The government is only fending off the inevitible crash of the companies that they forced their poorly thought-out communist view of the world on.
Just so everyone knows what sub-prime mortgages are. They are mortgages that were given to people whom couldn’t prove income or assets. People whom also didn’t have enough money to put down on a house or had poor credit. These sub-prime mortgages also, helped people get into homes that they could not regularly afford. I am not going to say all sub-prime mortgages are bad because there are many regular mortgages insured by mortgage insurers that are going bad too. The government enabled this to happen so that lower income people could get their own homes. By using this communist thinking it has helped to destroy many lives. People have lost jobs, their homes and their credit has been tarnish horribly. All this to get votes and bring about more government control of the economy.
The school system doesn’t teach these things because an informed public would not stand for this. This is why the teachers union doesn’t want competent teachers to teach our young. I am sure that some economic professor is teaching his students that this thirty billion dollar gift to a private company is a good financial decision.
http://en.wikipedia.org/wiki/Bear_Stearns
http://www.msnbc.msn.com/id/23880336/
http://www.michaelsavage.com/
