CUI BONO
The federal government's rescue of Fannie and Freddie has a lot of small-minded people scratching their heads over why Treasury Secretary Paulson did not allow the two GSEs to go belly up.
Think. No, think hard. Really hard.
Who loses if Fannie and Freddie go belly up? And don't give me that crock about how the American taxpayer ultimately loses if Fannie and Freddie die--that is the front, not the truth. If you bought that, you are beyond STUPID. You are on par with a pet rock in the department of intelligence.
Here's the skinny.
China, America's secondary creditor, owns $376 billion of Fannie and Freddie bonds.
America owes China $502 billion.
China wants its interests protected, and since America owes China a ton of money, their interests are America's interests.
Thus, letting Fannie and Freddie fall flat on their face was NEVER an option.
Did you think Paulson did this on a whim?! This is not a simple matter of free market capitalism vs. command and control economic intervention. This is a matter of the relationship between debtor and creditor. That power structure looks like this:
Creditor/Debtor
where the denominator is the one getting fucked. Are we crystal?
Shylock said, "I'll have my bond. Speak not against my bond.
I have sworn an oath that I will have my bond."
That's all that is. Go read the Bard.
Think. No, think hard. Really hard.
Who loses if Fannie and Freddie go belly up? And don't give me that crock about how the American taxpayer ultimately loses if Fannie and Freddie die--that is the front, not the truth. If you bought that, you are beyond STUPID. You are on par with a pet rock in the department of intelligence.
Here's the skinny.
China, America's secondary creditor, owns $376 billion of Fannie and Freddie bonds.
America owes China $502 billion.
China wants its interests protected, and since America owes China a ton of money, their interests are America's interests.
Thus, letting Fannie and Freddie fall flat on their face was NEVER an option.
Did you think Paulson did this on a whim?! This is not a simple matter of free market capitalism vs. command and control economic intervention. This is a matter of the relationship between debtor and creditor. That power structure looks like this:
Creditor/Debtor
where the denominator is the one getting fucked. Are we crystal?
Shylock said, "I'll have my bond. Speak not against my bond.
I have sworn an oath that I will have my bond."
That's all that is. Go read the Bard.
posted by Noel at
7:11 PM
1 Comments:
Exactly.
Well said.
When it comes down to it, that's all any exchange in this country really is -- a debtor/creditor relationship.
Economic theory only offers potential ways to ease, accommodate, or otherwise increase the efficiency of the relationship. It never changes the involved parties' interests or the roles they play with regards to each other.
Another smoke screen for the idiot masses -- something to bounce around and huff about on television "news."
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