Political & Cultural Commentary with a Libertarian Conservative View.
I mentioned last week that the Government and Federal Reserve had spent, lent or committed $12.8 trillion, here’s video from stopspendingourfuture.org that helps put that in perspective:
In short, we have spent more bailouts than we did on World War 2!
I’m at a loss for words here… From the AP via Michelle Malkin:
President Bush argued Monday that the government’s dramatic rescue of Citigroup was necessary to “safeguard the financial system” and help the economy recover, and he said there could be more such moves if other institutions need help.
Bush said he approved the action, recommended by Treasury Secretary Henry Paulson, while flying back to Washington on Sunday evening from meetings in Peru with Pacific Rim leaders. He said he also spoke with President-elect Barack Obama on Sunday night, part of what he has promised will be “close cooperation” between his administration and the Obama camp.
Referring to the Citigroup rescue, Bush said, “We have made these kind of decisions in the past. We made one last night. And if need be we will make these kind of decisions to safeguard our financial system in the future.” Read the rest…
They say the definition of insanity is when you keep doing the same thing over and over and expecting different results… We can’t keep printing money and think we can inflate our way out of this crisis.
If you haven’t read Christopher Woods Op Ed “The Fed Is Out of Ammunition” in today’s Wall Street Journal you should. While I disagree with his suggestion that we return to the gold standard – not that it’s a bad idea, I just don’t think we can get that Gennie in back the bottle at this point… Woods does an excellent job of explaining why the current bailout circus is doomed to fail.
From the Wall Street Journal:
The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup by moving to guarantee close to $300 billion in troubled assets weighing on the bank’s books.
Treasury has agreed to inject an additional $20 billion in capital into Citigroup under terms of the deal hashed out between the bank, the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. Treasury officials will charge a higher interest rate for the capital injection — 8% for the first few years — than it has charged to dozens of other banks now borrowing money under the government’s the $700 billion rescue package approved by Congress last month.
Here’s my prediction: It’s not going to work… Sure it’ll make everyone feel good and stocks will rise in the short term but once the euphoria wears off and reality sinks in we’ll be right back where we started.
Michelle Malkin says:
Crap Sandwich 2.0 is morphing again.
We’ve gone from the toxic assets purchase plan to the capital injection plan to the throw-it-all-against-the-wall-and-whatever-the-hell-sticks-sticks non-plan plan.
And there in lies the problem, at least from my perspective… We rushed into this bailout business without really understanding the full scope of the problem and are now groping around in the dark trying to find a way out.
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