The Progressive17 September 2008If there are no atheists in a foxhole, there certainly aren't any capitalists in a financial crisis.
After making one reckless bet after another, Wall Street firms have run to Washington with their tails between their legs.
And except for Lehman Brothers, Washington has thrown them some expensive bones.
The Fed just dished out $85 billion to AIG, after forking over $29 billion to Bear Stearns, and getting us all on the hook for hundreds of billions of dollars to back Fannie Mae and Freddie Mac.
This is socialism for Wall Street.
But it doesn't help the people who are hurting in this country, especially the people who are being foreclosed upon.
God forbid we had socialism for them.
For less money, Washington could have backed their mortgages and let them stay in their homes. It could have marked the mortgages down by 25% or so, since the homes were overvalued. But this would have made it easier for people to make their payments, and the government also could have frozen the increase in the subprime rates that were killing the homeowners.
Since the housing sector was at the epicenter of the financial crisis, the government's backing of individual mortgages could have lent some stability to the industry, and put an orderly floor on the deflation. This could have stanched some of the bleeding at the investment firms that had recklessly bet on the housing market, as well.
But rather than put the individuals first, the government has put Wall Street first.
And that's socialism for the greediest, not the neediest.
