Tuesday, September 9, 2008

Nationalisation back on the agenda

I guess Labour govts aren't the only ones willing to nationalise to cover market failures. Now even the US govt is into it, buying up Freddie Mac and Fannie Mae.

As it happens, I agree with our libertarian readers that the market would efficiently self-regulate to overcome problems like this, so technically no nationalisation is necessary. But "efficiency" and "self-regulation" aren't interested in emotive side issues like whether you lose your house, job and possessions in the process. A govt elected by voters has to pay less attention to efficiency than to what voters who've lost their houses, jobs and possessions might think of the govt. So let's hear it for democracy - the libertarians in their Randian ideological purity would see you go under and consider it a beneficial weeding out of the weaklings. Fuck 'em.

Most interesting feature of the linked article above:

Paulson had briefed the US presidential candidates Barack Obama and John McCain at the weekend about the plan. McCain gave it his backing, but Obama said he would reserve judgment. "We have to protect taxpayers and not bail out shareholders and management," he said.


Oh yeah - the divide between left and right is just so clear in this election, huh?

5 comments:

Observer said...

One of the interesting things in the Fanny Mac issue is that, just like in the scAir New Zealand issue, the existing shareholders are the ones who have lost most; their shares are now worth 0.001% of what they were worth at the start of the year. In a fire-sale they would have probably been worth more.

Nor is it true that there weren't any other options! If the shares had been allowed to drop to their 'market' value it's probable that a middle east or Russian syndicate would have been put together to take up the majority and then make loans from their almost unfathomable cash flow.

Sadly, what this, the scAir New Zealand, Northern Rock, etc., affairs all show is that governments like market forces only so long as they like them, and not one inch further - irrespective of what is good for regular market participants.

Anonymous said...

just like in the scAir New Zealand issue,

and in Telecom. and in Genesis. and in Meridian.
and in anything touched by Labour.


But "efficiency" and "self-regulation" aren't interested in emotive side issues like whether you lose your house, job and possessions in the process.

Oh for goodness sake: I though you at least understood basis mathematics.

The houses aren't going anywhere, and cannot be left empty. If half the US mortgages collapsed overnight then what would happen is that the houses would be resold back to their occupiers at realistic prices with mortgages they could sustain

Possessions - well even in the US if you declare bankrupcy you can keep "your" possessions. If you have stuff on hock or HP or credit cards you can't pay back then the stuff belongs to the bank anyway

Jobs - well the jobs are going anyway, whether the housing market is saved or not makes little difference to the US competitiveness overall.
Again, the big buyout only makes things worse, pushing up government debt and thus interest rates, thus suffocating businesses that would otherwise be able to flourish in a low-interest rate, realistic wage rates, and realistic property prices
that would certainly have resulted from Mae & Mac collapsing

Sus said...

"So let's hear it for democracy -"

No, let's not. It's mob rule. Nothing less.

"the libertarians .. would see you go under and consider it a beneficial weeding out of the weaklings. Fuck 'em."

So fuck innocent taxpayers instead, eh? Make Peter pay for Paul? Ahhhh .. the good old "fairness" of socialism, once again!

Psycho Milt said...

It's mob rule.

Which has been the cry of the Right against democracy since the 18th Century. Fuck all y'all.

So fuck innocent taxpayers instead, eh? Make Peter pay for Paul?

It's also a feature of the Right that they'll try and make a virtue out of casting large numbers of their fellow citizens into the abyss for the sake of pretending there's no such thing as society. Again, fuck all y'all.

Sus said...

Democracy: two wolves, one lamb, dinner = lamb fucked. No argument.

"Casting large numbers of fellow citizens into the abyss"? WTF? Was anybody *forced* into signing a mortgage agreement?

And yet you'd force innocent parties - themselves working to pay off their own homes - to bail out the former. Ah, there's none so immoral as those who scream morality.

And there's no jackboots like socialist jackboots, eh.