That's essentially what the bailout of Bear-Stearns does. A bunch of ruthless investors create a lax regulatory environment through their bribes, uh - contributions - to Congress. They lend sub-prime money to millions - mostly minorities and people who otherwise couldn't get large loans. Real estate prices go down at the same time the interest rates on these loans goes up. Hundreds of thousands of the ignorant people who were encouraged by predatory companies to get the poorly secured loans start to go belly up. Phony fix-ups for them are floated by politicians, with plans for implementation in the hazy future.Then a few sleazy hedge funds go where they inevitably were going to head - way, way south. A major investment firm is endangered because of their borderline criminality. Within hours the Fed and the Executive branch of our government are there with a bailout that would keep the Iraq war going for two months.
Wall Street welfare - Main Street bankruptcy. Only, these days, the victimized can't even declare a decent bankruptcy, because Congress changed the rules, making them continually vulnerable for retribution for the rest of their lives.
Privatize the profits - socialize the risks.
erin makes the same point in her new entry at Journey on the Wild Coast Blog. She and hig have gotten to the Pebble Mine site, one of the major goals of their 4,000-mile non-motorized trek from Seattle to the Aleutians. Noting how a mine like Pebble's legacy fits into our collective future, long after the gold has been extracted, the profits removed from Alaska, she writes:
They’re still exploring out there. Still finding more gold and copper, still expanding the already enormous size of this proposal. And with that enormous size comes an enormous amount of toxic waste - chemicals, tailings and waste rock that needs to be carefully contained - carefully kept separate from the groundwater and streams that feed Bristol Bay’s extraordinary fish resources. “Modern mining” has a shaky track record in protecting waters even for a few decades. And we would have to trust them for thousands of years. Through earthquakes, storms, and changes in climate… Through changes in corporations, generations, and even entire civilizations… Alaska gives permits to mines (like Red Dog Mine), that will require water treatment “in perpetuity”. But forever is impossible. And in hundreds or thousands of years, after the political and economic structures that keep the mine’s remains safe have shifted or dissolved, there may still be people there who need the fish in the streams and the animals along their banks.
photo by erin of prospecting rigs at the Pebble site.