Bailout rage: "Socialism in America ... Welcome to the Third World!"

Backlash against the unprecedented taxpayer bailout for banks is building, with critics ripping recent U.S. economic policy as "punch drunk," "casino capitalism" and "socialism in America."

"The free market for all intents and purposes is dead in America,” said Sen. Jim Bunning, R-Kentucky, the most vocal bailout critic in the Senate.  “The action proposed today by the Treasury Department will take away the free market and institute socialism in America."

"Dear United States,  Welcome to the Third  World!" wrote Los Angeles Times columnist Rosa Brooks. "It's not every day that a superpower makes a bid to transform itself into a Third World nation."

Housing and economic blogs again crackled with rage against the Bush administration's emergency plan to purchase illiquid assets from the nation's banks and lenders.

"I am livid," commenter "Jenna" wrote on L.A. Land. "Words fail to express how angry I am. I didn't get million dollar bonuses, I didn't use my home like an ATM, I didn't buy a home I couldn't afford. Nonetheless, I am going to have to pay for sgovernmentomething that was completely avoidable. It isn't brain surgery to know that selling homes to people who can't afford them was a bad idea and that someday they would have to pay the piper."

"We are doomed," wrote another commenter on L.A. Land. "I am fresh out of outrage."

Another commenter asked, "How can they do this? The financial system will start the party over again tomorrow. It is so unfair and crooked, stealing from our children to pay for this."

Mutual fund pioneer John Bogle said the U.S. government appears "punch drunk" in its stumbling efforts to rescue the financial system. “We're playing a game of casino capitalism, interfering with the way the market is working,” Bogle told Bloomberg News. “The  seems punch drunk. It doesn't seem systematic.”

Historian Allan Meltzer called the bailout plan "social democracy at its worst." He told Bloomberg News, "
“If they remove financial losses from the financial institution,” the government should ensure that “the financial company will still owe the money,” he said. “Civilized countries like Chile do that.”

-- Peter Viles

Your thoughts? Comments? Follow L.A. Land on Twitter, or e-mail story tips to Peter Viles.

Photo Credit: Bloomberg News photo shows, from left, Federal Reserve Chairman Ben Bernanke, President Bush and Teasury Secretary Henry Paulson.

Comments

[MyLessThanPrimeBeef]

Let's hope China is not thinking about extending their Great Wall to cover their vulnerable Yellow Sea shores.

A lot of people could use those empty, west-bound container ships.

What a disaster it would be if they then erect right there at the Bund in Shanghai a Statue of Economic Liberty to welcome the tired and the poor.

[Sal B]

Instead of "privatize the profits, socialize the losses," it's now "privatize the profits, nationalize the losses."

This administration makes sure the guilty are rewarded, not punished.

[whatsnew]

ONLY ONE'S COMING OUT OF THIS MESS SMELLY LIKE ROSE'S ARE THE CEO'S.!!!!!!

[LA-renter]

September 19, 2008
HAVANNA - Tears fell from the eyes of the Generalissimo today. In a rare brief statement from Fidel Castro, the former Cuban leader acknowledged the remarkable terms accepted by the United States of America. "Given my deteriorating health, I really never thought I would live to see this day." Doctors are concerned that the shock of recent events in the United States might prove detrimental to El Jefe's condition. Nevertheless, Castro is determined to visit Washington as soon as possible to meet with President Bush and congressional leaders...

[cindy]

Do you think the government is prepared when this story really hits main street? The rightly deserved anger and bitterness will be something we have never seen before in this life time. Are they prepared for this unattended consequence? Do we double what we already spent to make these people happy? Can I be made "whole" after paying the credit card company 30% interest for 5 years and paying off the card? Can I get the money back? Where is the payoff for prudence? Will the crime rate go up?

[Michael Snyder]

Once more with feeling: this is not socialism anywhere. It has become an elected monarchy with a striking kinship with the last of the Czars.

[Joe]

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, NORTHCOM, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

http://my.opera.com/richardinbellingham/blog/army-combat-team-to-deploy-october-1st-for-civil-security-emergency-management-r

[M C]

Watch out when the baby boomers retire. We're going right down the drain.

[MattJ]

Anyone who is still blaming the current state of the economy on one President or one party does not understand the seriousness of the situation or how we got to this point. Housing and economic bloggers have seen this coming for years; many of us have been doing what little we could to prepare ourselves for what is coming for years.

Mish (Mike Shedlock) had a good post earlier listing the actions that led us to this point:

http://globaleconomicanalysis.blogspot.com/2008/09/peak-insanity-sec-plans-to-temporarily.html

These are bipartisan mistakes made over many, many years. It will take a lot of time and a lot of pain to get past this.

[jbunniii]

Soon Mexico will have to build a fence along its border to keep Americans out.

[JesusCrispy]

This is what America voted for when they elected Bush. Quit crying and learn to live with total failure.

[johnfrom]

bailout will be inflationary

no bailout will be deflationary

what do you want , worthless money or worthless property?

no money? no property ? no problem !

[David Theiss]

Given the history of unprecedented giveaways to the rich that occurred during the term of this administration, no one should be surprised at the recent developments. After all, nothing should be surprising from a leader who started a war on false pretexts merely to enrich war profiteers. Nevertheless, average Americans have a right to ensure that those responsible for looting the Treasury and committing what amounts to treasonous acts to prosecute a needless war are held accountable for their crimes.

[Anonymous]

I think the very worst part is that this bailout is still not dealing with the root of the problem. The root of this problem is that we have a society that consumes more than it produces. This is why we have such a high public/private debt burden in the first place. It is the root cause of every financial problem we have. We consume too much. We do not save enough. And thus we have to borrow. This is a widespread problem, and there is only one way to solve it: consume less and instead save more.

But of course no politician wants to enact policies that would curb our consumption. Why, you ask? Because the only way to curb our consumption is to induce a severe recession and no one wants to preside over something like that, even if it is necessary for the healing process to begin. This is all our fault. We want to have a free lunch. We want to consume and we don't want to pay for it. Until you direct your leaders to slap us in the face and stop this disastrous consumption binge, it will continue.

[johnfrom]

bailout will be inflationary

no bailout will be deflationary

what do you want , worthless money or worthless property?

no money? no property ? no problem !

[kristin]

This is a bailout for the rich, pure and simple. The rich CEOs gambled and lost big time. Now, they want the rest of us to bail them out so they can do it again. Within a few years, they'll be paid millions of dollars to be CEOs of other companies even though they lost billions of dollars. The system is truly stacked against regular people.

[Buy Houses Now!]

No Banker Left Behind!

[Van]

Where is my bailout for paying my mortgage, car payment, credit card on-time, every month, streching my budget to have a good credit record? Is the government going to write down the balance of my mortgage, tax-free, to the amount it is currently worth?

What happens to all the people who paid their mortgages and didn't get in over their head when they need to sell their home to move to another job location, larger home, etc? WE WILL BE STUCK WITH A LARGE MORTGAGE THAT WE CAN'T GET OUT OF!

[Spambotgo]

Now you expect Bankers' families to fly COMMERCIAL??

You savages.

[MyLessThanPrimeBeef]

Per new SEC regulation, I hereby declose that I own no raft at all, but I might 3 days after this is posted.

Here is what I recommend, free of conflict of interst: a raft, for commuting to work in China and for going to Cuba for free medical care.

[Rob]

I would like all of my financial burdens lifted from me. I have not made horrific decisions to live well beyond my means and borrow irresponsibly to enable people to carve themselves a massive unbroachable debt. WHY should I miss out on the free homes and money instead of managing my finances in a responsible adult fashion.

This is a load of bollocks.

[Depressed in LA]

how's the weather in Vancouver these days?

[socalinvestor]

Trotsky, Stalin, Lenin, Mao, and Marx are all looking down and laughing right now.

[copter]

I know laland is not the place to go for bailout sympathy, but in real life I have yet to meet anyone who is not angry about the bailout. I have many friends and family members across the political spectrum, and none of them support a bailout. Who are these people???

[David]

Dear Hank,
Please send me money. I went to Vegas and lost my shirt. I request $1 million now. I will write you again when I want more. Thanks!