Government needs to cut the Wall Street cord
It’s long past time for government to cut the cord with greedy Wall Street
To the surprise of many, I did support the Stimulus Package. We needed the liquidity to keep making loans after 2008 and the only way to do it was by government funding. The Fed has been babysitting the economy since then with QEI and II in addition to other programs to stimulate job creation. And while I believe they all did good in the sense that the markets and economy have at least maintained their levels, it’s time for government now to step aside and allow either the crash or correction to happen.
We can’t keep borrowing and printing to stave off the inevitable. That will only make it worse. The economy and markets need a consistent message from regulators. A clear message to them that you’re on your own would force the markets to correct themselves finally.
The irony is, despite calls from Congressional, “pro business” laissez faire republicans for no more stimulus and government aid, Wall Street loves that same government aid. At least until yesterday’s “Operation Twist” which has led to a massive sell off.
This appeared though to be only a moving of money from short to long term treasuries, which could help keep long term rates low and spur mortgage refinancing. How the refinancing of mortgages will help anything is beyond me as this just moves borrowed money from one account to another and doesn’t change the fact that too many people are unemployed or underemployed. or scared of losing their jobs and won’t be building a new house which would actually create and save construction jobs.
Mortgage rates were already low and after closing costs very few people would see any savings at all. Those who are underwater or have damaged credit wouldn’t be able to buy or refinance anyway. Do we start yet another government program to loan people who can’t qualify for a conventional loan to borrow from the government at the same rates? Let the government take the risk of default? In essence, government buying high risk loans as banks did a few years ago and hope they pay off.
I think not. It’s time for government and the Fed to keep it’s hands off. If you want to swim with the sharks in banking and Wall Street, don’t cry foul when you get bitten. We’ve learned much in the last two years about what the markets and economy can bear and how they react. seemingly every headline moves them up or down. Government can’t regulate the headlines. It’s done all it could to keep the economy afloat. It’s now time to let it go and if need be, pick up the pieces later. At least government won’t be as debt riddled if and when it does rather than continuing the path of more borrowing to prop up what has broken legs.
Whomever the author of this piece is, you should have known from the beginning that “stimulus” package was wrong…most Americans did and were busy calling their congressmen/women to vote “No” but the elitists, including McCain at the time, said f**k off and did it anyway. Why, sir or maam, was it good then, but not a good idea now.
You have a serious lack of understanding of true laissez-faire capitalism, to wit: the right to succeed and keep your earnings ANd the right to fail without having momma cover your ass.
I’m talking about bailouts and the propping up of a falling system. Not the regulatory relationship.
Government can no longer afford to be the cosignor for Wall Street. Saving it from itself.
As usual of late, Milton, you make a lot of sense.
The flaw in your “logic” is the government and Wall Street share a symbiotic relationship. One cannot exist without the other, rather like the Shark/Remora dynamic. The remora needs to feed off of the sharks leavings as the debris floats in the water. Without being able to do this the remora will die. In exchange the remora takes care of any unwanted hitchhikers for the shark. Same type of thing with the government but I don’t know which is the shark and which is the remora.
I’ll say this; whatever the relationship has been up to this point, from now on, the Government had better be the fuckin’ shark!