subsidized confusion
so the fed's answer to the crisis generated by the lending market's insatiable desire to disperse high risk loans to the poor is to give it more money.
that's it, no regulation, no slap on the wrist, nothing but free money. money has been "lent" to entities many times before and never repaid, therefore it is safe to assume that this money is essentially a gift, much like the money that was given to the airline industry after sept. 11. what's more, according to this story in the washington post, they are still practicing the same behavior that got them into this mess, because they know that the federal government will always have their backs.
meanwhile, what happens to the poor folks who took out these loans? is the federal government going to have their backs as well? are they going to give these people the money to pay off the bad loans that they took out?
free market capitalists always go on about how government should not interfere with markets through regulation. though it's funny how you never see them bitching when the government interferes in the marketplace in the form of subsidies.
even at the height of ronald reagan and his dismantling of the "new deal" and related regulations he borrowed the tool from "the evil empire" and gave $800 million to a dying chrysler.
subsidies are the tools of socialism to prop up industries that are not capable of sustaining themselves in a free, unregulated market. they were used in socialist states to carry various obsolete industries for fear that should an industry collapse, there would be significant unemployment and eventual discontent. in the case of america's use of subsidies, they are used strategically to artificially keep inflation down and avert financial disasters. they were one of the main targets and criticisms of free marketers in the era of socialism & communism. but now that these systems essentially no longer exist, except in a handful of arbitrary and isolated instances - not as a real threat, capitalism no longer has any clearly defined enemies, with the exception of governmental regulation. therefore the criticism of the use of subsidies no longer has weight. it is not part of a defined enemy, it is only a vague method to be used by the government on occasion, when the market needs, or in the case of certain industries such as farming, perpetually to artificially keep the cost of food down - food being the main gauges of inflation. keep the cost of food down, keep inflation down.
and now in the current instance they are being used, again strategically, to artificially sustain an industry that can no longer exist on it's own due to it's own incompetence.
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