Socialism almost comes to America

By Michael Fraase

Monday, 29 September 2008 08:12PM CST

Section: Politics

SocialismWhile we were all busy looking at the financial crisis and its attendant bailout in the US government’s flailing, waving right hand, the left hand of the US government was quietly and deftly bailing out the Detroit automobile industry to the tune of US$25 billion. The bailout was included in a bill allowing the offshore drilling ban to expire.

This particular bailout takes the form of a “loan,” except the loan payments are deferred for five years, making the cost to US taxpayers US$7.5 billion.

But wait, there’s hope. The bailout failed Monday in the House of Representatives vote, 228-205. Ian Welsh, writing at firedoglake, outlines four horrific provisions in the proposed bailout:

  1. Changes the worth of a security from what someone will pay for it to what a mathematical model says it will be worth at maturity
  2. Reduces mandatory reserve levels for banks to zero
  3. Any equity position taken by the government will be non-voting
  4. The bailout isn’t restricted to banks owned by US companies; virtually anyone can play
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