The U.S. Government's historic reaction<http://online.wsj.com/article/SB122182746619856569.html>to the financial crisis firmly puts us in a place not seen in generations. We have officially crossed the line from capitalism to socialism in less than a week. The Fed synthetically owns Wall Street as we speak.
The historic checks and balances built into the system, e.g. the ability to freely buy and sell, have been suspended<http://online.wsj.com/article/SB122181688114256411.html>for a large segment of the market. While the sayings "Wall Street privatizes gains and socializes losses" and "When there is too much capitalism you need a little socialism, and when there is too much socialism you need a little capitalism" have had symbolic meaning to me, they have never sounded so true than they have this week. I believe in times of crisis that while moral hazard must be noted and managed, addressing systemic problems swiftly and decisively is absolutely critical. And to the Fed and the Treasury's credit, they appear to have shifted from a one-off crisis management model<http://www.informationarbitrage.com/2008/09/the-paulson-doc.html>to a far-reaching, comprehensive approach<http://www.informationarbitrage.com/2008/09/good-bankbad-ba.html>for dealing with the crisis. However, there is a line between protecting the U.S. citizenry while supporting the health and functioning of the global financial system and pro-actively redistributing wealth based upon the political tides, and I believe this line has been crossed. "
I'd love some reactions.
And please, tell me how you really feel about the piece. Have some fun.
-- peace,
boddi
http://financialroadtosocialism.blogspot.com/