Bernake a Socialist?
I was thinking about the $35 billion the Fed infused into the system today. Some thoughts:
1. My understanding is that the Fed bought securities that were, in reality, home mortgages. In other words, the Fed now has the right to foreclose on homes... Sort of makes the government part of the capitalist system. Is that not a type of socialism?
2. Is this not hypocritical? On the one hand, conservatives believe markets should rule, i.e., if there is a bubble, let it be. On the other hand, if the rich stand to lose some money, it is the Federal Reserve to the rescue. I smell a double standard.
3. $35 billion is a bunch of bucks. Enough to pay for all the children in the nation to have health care. Enough to bring all of our bridges up to par. Enough to fund 3.5 months of Iraq. Could not the money have been put elsewhere? (Although, I guess it is just an investment... and the government will get its money back. On the other hand, isn't investing in infrastructure and children just as important?).
4. What happens when the markets stabilize? When the price of securities go up, will the Fed sell its portfolio at a market rate, or will it take a loss and allow the hedge funds to rake in the profits?
I have seen no blog ask, let alone answer these, questions.




