Beware
XM Radio launched a channel last year called P.O.T.U.S – all about politics all the time. It’s sort of a C-SPAN with analysis – from both sides, I should hasten to say. Like C-SPAN they cover complete speeches and events unlike the conventional media. I’ve enjoyed the channel a great deal over the past cycle, in part because it provides content from both sides and hearing the primary material is always fascinating.
Yesterday, they covered a gathering of conservatives at, I think, the “Values Voters Summit.” The segment I listened to had a series of short statements from participants about what they were concerned about politically at present. Among the most fascinating was an articulate woman with a slight Midwestern accent of the sort you hear in Michigan. Her concern, passionately stated, was that the government was taking over the private sector and now owned 30% of corporate profits and wanted more. This is a stunning interpretation of the tightrope act performed by Treasury and the FED over the past two years, years that bridged both the Bush and Obama administrations I should note.
The bailouts, as the infusions of capital into the banking, automotive, and financial sectors are called, were desperate moves that may or may not work according to many. But there was pretty much universal agreement that the absence of these actions would likely have made for an even more severe recession or even depression. That the conservative right now appears to be recasting this as an intentional intrusion into the private sector by an avaricious government is truly remarkable.
This reminds me of the similarly amazing assertion, now marching steadily through the wing-nut blogosphere, that those who worked for the Community Reinvestment Act and groups that decried predatory lending over the past decade were actually the cause of the financial meltdown. It’s truly a stunning conclusion to draw in the months following the largest federal bailout of Wall Street ever. Everyone, with the possible exceptions of Fox News and Lou Dobbs, realizes that the meltdown was caused by greedy financial cowboys who, unregulated as they were, simply rode roughshod over reason, pocketed the fees and commissions to the detriment to the poor people duped by unscrupulous lenders, and then left the rest of us with the joyous task of rescuing the system from bankruptcy with our tax dollars.
A second speaker at this conservative function railed about the recent legislation passed in the House ending federal subsidies to private banks for originating student loans. In a move that will save some $87 billion, the bill shifts student lending to a direct system and would utilize some of the savings to increase federal grants to low income students to help them complete school. The speaker believed this was precisely what the healthcare reforms were designed to do – create a public option that would put the private sector out of business. What he failed to do was account for the failure of private banks in providing the needed service. Some 180 banks exited the field over recent years, and those that remained were challenged to sell the repackaged loans into the private markets.
What the right seems to miss over and over again is that the private sector can’t do it all. And, sometimes, they do it so poorly that it costs us all a whole lot more than a simpler, well-managed public system. No one ever suggests that police or fire protection should be privatized. Or do they??
Apples and oranges, Mr. Pike. The reason the banks left the student lending program or could not sell the paqckage of notes into the private market is that is was non profitable. Meaning they were losing money due to the many defaults which were occuring. Student loans are made based on the person not collateral. So if the person decides not to pay back the loan there is nothing the bank can do to get that money back (sure they can send to collections but get blood out of a turnip is more likely). Sure the government can get into these loans but they still will not be profitable and I will argue less so since they will be making loans to anyone without regard to character or willingness to pay back the loan regardless of outcome (getting a college eduction, votech or dropping out of college with no intention of paying). Secondly, the government has no mandate to be in the business of health care. They do not need to make a profit and therefore can charge lower premiums than companies who need to make profits in order to stay in business. This will drive the companies from business (simple economics as this is what a monopoly does to disgard their competitors). Of course those who have power and wealth (I should add political connections) do not have to worry. They will receive top notch health care regardless of what happens to the health care industry. I would be haapy to elaborate further on what will occur if the government gets their hands on our healthcare such a decrease in the number of doctors, poor quality of health services and long waiting lines. As for the government being involved with police and fire, these are seperate areas which are for the protection of the entire community and therefore paid for by the entire community through taxes (well most of the community who pay taxes). I would ask you what governmental entity provides a service which is well managers (the military being exempt).
Comment by David Persich — September 22, 2009 @ 2:34 pm