phik

It may be the Democrats’ hypothetical message, but what about their actions?

bankers first, bailing out Fanny and Freddie, refusing to prosecute the fraud

war first, happy to go along with the Iraq adventure; keen for another in Georgia

debt first, selling out the next generation

inflation first, a tax that hits the poorest hardest

government first, even — perhaps especially — when it’s unconstitutional

To be clear: I’m no Republican apologist, and the last 20 years of GOP efforts have been one disaster after another.

But let’s stop pretending that the Democrats are any better, that there will be any kind of meaningful “change”. They just pick slightly different winners and losers:

Neither party stands for freedom; personal, social, or economic.

Neither party wants peace; both permit Iraq to go on. Both are eager for more war, be it in Afghanistan, North Korea, Iran, Syria, Georgia, Darfur, …

Neither party is economically responsible. They spend. They inflate the currency. They strangle any American business not large enough to buy favour. They bail out their friends.

Neither party upholds the constitution, in which the executive answers to Congress or the people. In which 50 states are allowed to compete for the best solutions.

In every way that matters, they are virtually identical.

SIR — Your article gets one thing right: this is capitalism at its worst, and it must not go forward.

Every prospectus for GSE debt for 30 years has included huge bold text on the cover making unambiguous its lack of government backing.

To bail out speculators and foreign governments — who collected billions courtesy of higher yields over Treasuries — at US taxpayer expense is not merely morally bankrupt, but treason.

Bailout or collapse are not the only choices. Sell the assets via receivership, like any other bankrupt company, and wind them down. If you believe your own rhetoric about asset values, the bondholders lose only a few percent. Either way, the responsible parties wear the loss.

Finally, the notion that this action reduces mortgage costs seems optimistic at best. More likely is that government borrowing costs rise, as the bond market punishes the US government for its profligacy. The spread may narrow, but nobody gets a cheaper mortgage.

Phil Schwan
Perth, Australia