Henry Waxman is investigating whether the Bush Administration took a page out of Naomi Klein's book, "The Shock Doctrine" by deliberately precipitating a bear raid on Fannie Mae and Freddie Mac, according to the Washington Post.
Folks might recall that I have been speculating openly about whether the GSE crisis last month was the "mother of all Bear Raids." (A "bear raid" is when interests short a stock, then spread rumors of insolvency or other bad news in order to create a collapse of the stock, and then cash in). The run on Fannie and Freddie started with rumors at the end of June of an imminent collapse "within two weeks" of the US financial system. Then on Wednesday July 9, former Fed Governor Poole (now with the Heritage foundation), long a critic of Fannie and Freddie, claimed they were insolvent. This started a run which was only intensified two days later when somebody leaked a memo to the NY Times that the Administration was considering the nationalization of the two GSE's.
Fast forward three weeks and the Administration has been handed a blank check by Congress to spend as much as it wants without any limit whatsoever to "backstop" Fannie and Freddie, and a Morgan Stanley banker has been hired to oversee the same.
Nationalize?
hmmmm.....well, to get Congress to cough up a blank check for their investor pals, honestly ....is it that hard anyway?
That seems opposite of BushCorp. They usually are trying to privatize, so I don't quite get this, unless it shows somehow more funds for their investor class.
What would nationalizing Freddie and Fannie do for the neocon agenda long term? (how would it move large funds out of the national interest, working America's interests and to their cronies and pals?, long term...
or is this just to keep the Ponzi scheme going?
Latest reported earnings
Freddie Mac - $821M
Fannie Mae - $2.3B
AIG - $5.4B
Empircal Link between Manufacuring Job Loss and Housing Crisis
The empirical case between manufacturing job losses and the housing crisis is a slow meltdown of the U.S. Manufactures over 70 years - from WWII to 2008. For the increases in productivity, the US worker got deeper into debt over the last 70 years. WWII are the only years with both growth of savings and lower debt (savings were larger than household debt during War years).
Manufacturing job loss and Housing Debt are gradually unfolding crises until the level of debt becomes unsustainable and housing prices no longer support debt increases. WWII is unique for the quadrupling of GDP between 1939 and 1942 and the burst of manufacturing: half the world steel output is U.S made.
The standard answer is that automation, not trade caused manufacturing job loss. But technology manufacturing is a subset of manufacturing and tech production has all but vanished with the rest of the manufacturing base.
The surprising result is that folks working in Starbucks and Wally World have greater difficulty with paying mortgages.
Burton Leed
Automation
"The standard answer is that automation, not trade caused manufacturing job loss. But technology manufacturing is a subset of manufacturing and tech production has all but vanished with the rest of the manufacturing base."**************************************************
Indeed - I happen to work in the automation industry. You would think if it were true that automation was displacing workers then we would be going full steam ahead in our industry, but alas, such is not the case - as manufacturing declines so too does the demand for automation equipment
It is still cheaper to send production and do it manually offshore than it is to invest in automation. I know of whole automated assembly lines mothballed because production was shipped off to china or mexico.
Automation
I forgot to mention, there are still many many tasks that even the most complex robotics can not fully duplicate human labor
My observation is that we are losing more of the so called advanced manufacturing than the grunt labor jobs.
US Manufacturing is becoming a hollowed out shell with most operations becoming final assembly and packaging points using foreign made componentry.
Where do they come up with this stuff
I am curious how they come up with this nonsense that automation accounts for all the mfg job loss? What data are they looking at to support this assertion?
Did they ask anybody in the automation industry?
Middle Class neighborhood
Anecdotally, my neighborhood is and always has been a solidly middle class neighborhood of manufacuring blue and white collar workers.
With the major decline of midwest mfg base, so too are we seeing an increase in number of homes on the market as well length of time on the market
there are simply no new jobs except retail and resturant coming to the community that would allow people to afford these homes - typical two story colonials and rambler ranches. Especially without some gimmicky financing
The neighbors leaving are not for the most part due to credit or mortgage problems so much as the need to either downscale to a more affordable home, or relocating for a job change. And with no demand for these homes due to no new jobs, so too has value stagnated.