Socialising losses and the American Dream.

Where have all those free market ideologists gone? Where is all the constant prattle about the benign creative destruction characteristic of capitalism? Where are all those who claim that governnment intervention and ownership is taboo and always inefficient? Why is it that no one is talking about letting inefficient corporations fail and the evil of bailouts?

The people behind all that ideological claptrap are driving the U.S. stock market up hundreds of points as I type this! Why?

The reason is simple: the profits of selling the American Dream of home ownership were privatised going to all those who sold the overvalued paper that caused the sub-prime mortgage meltdown. Much of the loss was suffered by other financial institutions but now Fannie Mae and Freddie Mac are being taken over and backed by the government. In fact their losses are being indirectly assumed by the U.S. taxpayer to the tune of billions upon billions of dollars. The general public did not share in the ill-gotten gains but it will assume the loss from the whole charade.

I am sure that many small businesses would be happy if the government stepped in and saved them from bankruptcy by guaranteeing to cover their losses.