Friday, August 31, 2007

Bailout Who?

Ben Bernanke, the Chairman of the Federal Reserve Board, has lowered interest rates and has signaled that he will continue to do so, to keep the stock market liquid. This action has the effect of propping up the practice of making highly leveraged and unsound investments by Wall Street fatcats. It also drives pension funds and more modest private investors into riskier areas of investment, in an effort to meet their obligations. It causes inflation, so that people who have spent their lives saving, end up with nothing. It is a bail out of the wealthy, at the expense of those of more modest means.

President Bush has announced that he will relax the standards that the Federal Housing Administration uses to insure mortgages. This does not so much mean that the homeowners who have been enticed to borrow too much easy money from Wall Street, will be able to keep their homes. It means that when they finally lose their homes, It will be you and I, Joe Taxpayer, who takes the loss.

It's clear that the Bush Administration is worried about the wellbeing of it's constituents an is taking action to protect them. Unfortunately you and I are not members of that constituency.

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