Patent Law

Moral Hazard

By Gary Odom and Jordan Kuhn

This is a patent weblog, so pardon me. But the proposed $700 billion dollar bank bailout plan is astonishing in its giveaway to the financial industry. It's nothing but a bank holiday with taxpayers footing the tab.

Let the banks fail. Greedy bastards made their bet, let them go bankrupt. It's called capitalism, the system this country supposedly has. You take the risks, you reap the rewards, you pay the costs. Home of the brave and the free to win or lose.

$700 billion is bodacious fiscal lubricant. If the government wants to give away $700 billion dollars, give it back to taxpayers. That'll keep the economy running.

Now, if the U.S. is fascist, then prop the banks up. In other words, the plan is a clarion admission that this country is really corporatism, run by and for corporations. The shift in tax burden from corporations to workers in the past forty years is proof positive. This plan is barefaced proof positive. As if George Bush didn't do enough, John McCain wants more, further lowering corporate taxes.

The little guy can eat dirt as far as the government is concerned, but BIG money is too big to fail - they must be bailed out.

The Wall Street Journal:

The plan would allow the government to buy up unmarketable assets, such as mortgage-backed securities, that economists say are clogging the financial system and blocking access to many types of credit.

The banks screwed up lending, their supposed core competence, so now they have nothing more to lend. While noting "irrational exuberance," the government did nothing as the crisis built year after year. But now the government response is: Gee, let's give them more to lend by buying their worthless mistakes.

Oh, how the hoopleheads eat it up. The sky is falling. As in, inventors asserting their patent rights against corporations are "patent trolls." Nothing but corporate propaganda, mouthed by corporate dupes.

The Economist:

Mr Paulson's plan... could safeguard irresponsible bankers' jobs, while doing little to stop troubled mortgage debtors from being thrown out of their homes. It seeks to invest massive power in a treasury secretary with a lifelong loyalty to Wall Street. The banks with the worst assets (ie, those which have made the worst decisions) could receive the most help. Most disturbing, the taxpayer will be funding an enormous, ill-defined programme, without any stipulation as yet that the banks who orchestrated the mess will pay a penalty.

The right bailout, already in place, is FDIC insured deposits for deposit holders.

The randomly competent who think this bailout a good idea have given no thought to the consequences, the dynamic put into play. What happens to the dollar, the very foundation of the American economy? How is this paid for, on the heels of a $3 trillion dollar worthless war in Iraq? The Wall Street Journal:

Already, the Bush administration's proposal to spend $700 billion buying troubled assets from U.S. banks has shaken confidence in the dollar among foreign investors who feel the plan could dangerously increase already-high U.S. debt levels. That concern could further weaken the dollar's status as the dominant global currency. China and other countries with huge holdings of U.S. dollars could also seek to shift more assets elsewhere, hurting the already wobbly American currency.

If you believe in the illusion of democracy for the shell game run in this country, contact your congressional representatives with a taste of outrage. Otherwise, sit back and enjoy the show. You paid for it.

Full post as published by The Patent Prospector on September 25, 2008 (boomark / email).