Krugman of the NYT Explains Fannie and Freddie and Failure

We are always excited to take delivery of the facts by reading the egalitarian minutiae from the latest political proclamations from the New York Time. We expect little else from essays of the NYT—aka the Walter Duranty Papers[1]. Today, the emotional and financial demise of the quasi-government corporations are the issues and we will be educated on their proper role in the government, their imminent but probably concluded bail-out and more. Watch your taxes soar.

We always need to be alert for ringers and phony political facts by using our usual diagnostics for the pedestrian–level propaganda from the Times. These NYT staff types are simple  automatons[2] who thrash about their cages while mangling the basic elements of reason and history for their essays and are crude redaction artists that can command the rapt attention of the compliant future because they can manipulate the present or the past as necessary. Our krugmaniacal hero from the Times graciously explains Fannie and Freddie and their failure to perform because of  the overt corruption of capitalists. The capitalists must be punished by high taxation. Bastille Day [3]is always a proper occasion to discuss filling the baskets and confiscation wealth. There were only 7 prisoners in that slammer that day and the real reason for the riots was inflation when the price of a loaf of bread rose above the pay for  an average man’s work day. [4]

“And now we’ve reached the next stage of our seemingly never-ending financial crisis. This time Fannie Mae and Freddie Mac are in the headlines, with dire warnings of imminent collapse. How worried should we be?”[5]-- By Paul Krugman Published: July 14, 2008. [Emphasis is mine in all quotes. This link references all quotes in this essay unless otherwise noted. ]

Of course not! This pair of government wreckages, the two faces of Baucus from the Franklin Delano[6] Roosevelt's New Deal[7] to ‘help out’ with the mortgages during the Great Depression, was only great for socialists. Successful and honest citizens always lose on such phony programs. This brand of marvel is exactly what a socialist would, and d0es, slobber about when exalting such governmental monsters. This must be preserved and our krugmaniacal tax monger will put out clarion calls for money from the tax payers to restuff this bag of pus.

“Well, I’m going to take a contrarian position: the storm over these particular lenders is overblown. Fannie and Freddie probably will need a government rescue.”

There is nothing contrarian about tax whoring. This is standard NYT fluff.

As to their quasi corporate privileges:

“The most important of these privileges is implicit: it’s the belief of investors that if Fannie and Freddie are threatened with failure, the federal government will come to their rescue.”

Did we need to hear more than this?? This is a license to steal, or better, to be an incompetent financial parasite and bask warmly in the soggy glow of socialism as your pay and retirement bennies are assured and lashed to the backs of the tax payers, 97% of which are in upper half of the population. Power to the people!

“This implicit guarantee means that profits are privatized but losses are socialized. If Fannie and Freddie do well, their stockholders reap the benefits, but if things go badly, Washington picks up the tab. Heads they win, tails we lose.”

Stark and accurate facts from the Times. But, Krugman does not mention that such profits are taxable.

“Investors have been dumping shares and buying the bonds of the government sponsored entities (GSEs) instead in anticipation that a state takeover would effectively give their combined outstanding $6.1 trillion in debt a clear government guarantee.”[8]--Wikipedia

Sometimes, Krugman gets it left but accurate. We can salute his candor and concern for the moment.

“Such one-way bets can encourage the taking of bad risks, because the downside is someone else’s problem.”

He abbreviates here. This is the norm for ALL GOVERNMENT PROGRAMS because if they fail or mess up things they call on the tax payer to wipe up the scattered offal and they keep their phony government jobs. The propagandistic element of choice here for the left is to balme capitalism and ingnore the ecnompassing and intrisic symptoms of of a sick government and questionable socieity here.

A major part of the problem is the hopeless tax situation for inner cities where  victims and muggers live in close proximity and the city needs  somebody to buy run-down houses and pay exhorbitant taxes. Flop houses would be cheaper and more effective. Some of this phantasm  is faciiltated by a leftist process known as that the Greenlining[9] [10] project. The credit ratings of deadbeats, muggers, druggies, prostitutes, felons and street crime types had their credit ratings masked so that they could buy a house for nothing down and live there at the expense of the tax payers. Then, there are the flippers who bought house in the hope of quick profits. The cities need tax revenues from such dumps and getting bank monies to do so is just fine. Money from banks and honest people are not marked as such. Neither is the drug money that supplies so many jobs to inner cities like Baltimore or Philly or the ChocolateCity.

“Still, isn’t it shocking that taxpayers may end up having to rescue these institutions? Not really. We’re going through a major financial crisis — and such crises almost always end with some kind of taxpayer bailout for the banking system.”

Not really. The liberal Democrats also fixed the system in Social Security where they could barrow 1 bln dollars and stick it to the tax payers.[11] [12] They also spent the highway trust fund of about 30 bln dollars.  So, now they whine about the ‘infrastructure.’

“And let’s be clear: Fannie and Freddie can’t be allowed to fail. With the collapse of subprime lending, they’re now more central than ever to the housing market, and the economy as a whole.”

This Freddy, Frumpy, Floppy program is another socialist disgrace from the FDR era just like Social Security, and related to similar LBJ wreckages the Great Society, War on Poverty and HUD, HHS, Department of Education and other phony government programs. The only solution to any problems of government outlined by the New York Times is more government, higher taxes bigger and more taxes later to cover up the blunders.

The expected political and financial outcome outlined by the Walter Duranty Papers here is to bribe ignorant liberals, criminals, druggies and other losers to buy homes [whether they have the cognitive skills to understand the mortgage contracts or not] and then reward them with a subsidy at the expense of the tax payers.

This but another variant on the ‘redistribution of wealth’ nostrums from the Communist Manifesto, Frenach Revoltion and incohernt yowlings from those in California.

 Grunt and Grab

The liberals will say and do anything to get more political power and grab more wealth. Anything at all.

rycK

Comments to: ryckki@gmail.com