Then came the huge tax policy change in their favor...

Fifty bucks says that our finest so-called conservatives justify this welfare

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/09/AR2008110902155_pf.html

Gosh, illegal theft of public funds for private institutions? That's the first plank of the modern Republican party.

What Would Jesus Loot? ;)

The change to Section 382 of the tax code -- a provision that limited a kind of tax shelter arising in corporate mergers -- came after a two-decade effort by conservative economists and Republican administration officials to eliminate or overhaul the law, which is so little-known that even influential tax experts sometimes draw a blank at its mention. Until the financial meltdown, its opponents thought it would be nearly impossible to revamp the section because this would look like a corporate giveaway, according to lobbyists.

and

No one in the Treasury informed the tax-writing committees of Congress about this move, which could reduce revenue by tens of billions of dollars. Legislators learned about the notice only days later.

not to mention the bit about 382 being the 'third rail' of tax law prior to the current crisis, were particularly telling -

If there's one thing this administration *has* done well (in reference to the other thread ;) ), it's 1) had an impressive ability to seize as much power as possible under the radar; and 2) had an uncanny knack for using a disaster (and the ensuing panic, which it fans as much as possible) in the most perverse means possible for personal and political gain. Why would we have expected the Bush-appointed Treasury head to behave any differently, since it wasn't explicitly prohibited (even if illegal)?

Regards,
Nydia

Jeeeze , is there nothing these elected and nonelected powers that be in Washington will do?

"Some conservative economists argue that not only should a firm be able to use losses to offset gains, but that in a year when a company only loses money, it should be entitled to a cash refund from the government."

Sounds like capitalism 101 to me.

"Some conservative economists argue that not only should a firm be able to use losses to offset gains, but that in a year when a company only loses money, it should be entitled to a cash refund from the government."

Sounds like capitalism 101 to me.

I don't know, sounds like Bush and his Treasury Secretary might be Socialists; they are spreading the wealth.

its why Ive mentioned in the past that so many of these bank mergers are really just huge money makers for the next decade for the purchasing bank.

I doubt it will change much and even if it does the tax payer will just bail them out anyway, nice win win.

A MINORITY VIEW

BY WALTER E. WILLIAMS

RELEASE: WEDNESDAY, NOVEMBER 5, 2008, AND THEREAFTER


Capitalism and the Financial Crisis


There has always been contempt for economic liberty. Historically, our nation was an important, not complete, exception. It took the calamity of the Great Depression to bring about today's level of restrictions on economic liberty. Now we have another government-created calamity that has the prospect of moving us even further away from economic liberty with the news media and pundits creating the perception that the current crisis can be blamed on capitalism. We see comments such as those in the New York Times: "The United States has a culture that celebrates laissez-faire capitalism as the economic ideal. Or, "For 30 years, the nation's political system has been tilted in favor of business deregulation and against new rules." Another says, "Since 1997, Mr. Brown (the British Prime Minister) has been a powerful voice behind the Labor Party's embrace of an American-style economic philosophy that was light on regulation."

First, let's establish what laissez-faire capitalism is. Broadly defined, it is an economic system based on private ownership and control over of the means of production. Under laissez-faire capitalism, government activity is restricted to the protection of the individual's rights against fraud, theft and the initiation of physical force.

Professor George Reisman has written a very insightful article on his blog titled "The Myth that Laissez Faire Is Responsible for Our Financial Crisis." (http://georgereisman.com/blog/2008/1...sponsible.html (http://georgereisman.com/blog/2008/10/myth-that-laissez-faire-is-responsible.html)) You can decide whether we have in an unregulated laissez-faire economy. There are 15 cabinet departments, nine of which control various aspects of the U.S. economy. They are the Departments of: Transportation, Housing and Urban Development, Health and Human Services, Education, Energy, Labor, Agriculture, Commerce, and Interior. In addition, there is the alphabet soup cluster of federal agencies such as: the IRS, the FRB and FDIC, the EPA, FDA, SEC, CFTC, NLRB, FTC, FCC, FERC, FEMA, FAA, CAA, INS, OHSA, CPSC, NHTSA, EEOC, BATF, DEA, NIH, and NASA.

Here's my question to you: Can one be sane and at the same time hold that ours is an unregulated laissez-faire economy? Better yet, tell me what a businessman, or for that matter you, can do that does not involve some kind of government regulation. A businessman must seek government approval for the minutest detail of his operation or face the wrath of some government agency, whether it's at the federal, state or local level. Just about everything we buy or use has some kind of government dictate involved whether it's package labeling, how many gallons of water to flush toilets or what pharmaceuticals can be prescribed. You say, "Williams, there's a reason for this government control." Yes, there's a reason for everything but that does not change the fact that there is massive government control over our economy.

It is incorrect to say that laissez-faire or free markets are unregulated. There is ruthless regulation, but it's not by government. Take the mortgage industry. In the absence of government interference, it is unlikely that a lender would extend a mortgage to a person with a poor credit history, making no down payment, and providing no verifiable employment history. But under the pressure of the government's Community Reinvestment Act and Fannie Mae and Freddie Mac buying up or guaranteeing such mortgages, a lender will.

When businesses make unwise decisions that lead to bankruptcy, their assets are sold off to someone else who might be able to put them to wiser use. Government bailouts give businesses a reprieve that the market wouldn't give them. Bailouts have at least two effects. They permit continued unwise use of resources and it creates what economists call moral hazard, the expectation of future bailouts and others hopping on the bailout wagon.

The blame for our current financial mess rests with government, with the major player being the Federal Reserve Board keeping interest rates artificially low and the congressional and White House market interference in the name of more home ownership. In the clamor for more regulation over our financial institutions, has anybody bothered to ask whether people in government know what they're doing?

Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com (http://www.creators.com/).

You know, that is really a very incorrect assessment of the situation.

You know, that is really a very incorrect assessment of the situation.


Specifics?

But under the pressure of the government's Community Reinvestment Act and Fannie Mae and Freddie Mac buying up or guaranteeing such mortgages, a lender will.

Ok, a specific. None of the things the author mentioned led to the wreckless lending spree. CRA has been in existence for almost 3 decades, Fannie and Freddie almost twice that long. However, this is the first time we have seen such insanity from our financial markets. Anyone with a semblence of intelligence would not lay the blame the way this author did. It was the unregulated bundling of mortages that were then sold onto Wall Street as securities that caused the lack of temperance and this current mess. It is quite simple. If I'm in the business of lending money and I'm going to lend you $100 and someday hope to be paid back $130, I'm going to make damn sure you can pay that back. If I'm going to lend you $100 and turn around and sell that loan for $110 and let someone else worry about the other $20 in profit, I just want to make as many $100 loans as fast as humanly possible. I NO LONGER CARE IF YOU PAY THE MONEY BACK. That is what happened, not this crap about the government made us lend the money.

Ok, a specific. None of the things the author mentioned led to the wreckless lending spree. CRA has been in existence for almost 3 decades, Fannie and Freddie almost twice that long. However, this is the first time we have seen such insanity from our financial markets. Anyone with a semblence of intelligence would not lay the blame the way this author did. It was the unregulated bundling of mortages that were then sold onto Wall Street as securities that caused the lack of temperance and this current mess. It is quite simple. If I'm in the business of lending money and I'm going to lend you $100 and someday hope to be paid back $130, I'm going to make damn sure you can pay that back. If I'm going to lend you $100 and turn around and sell that loan for $110 and let someone else worry about the other $20 in profit, I just want to make as many $100 loans as fast as humanly possible. I NO LONGER CARE IF YOU PAY THE MONEY BACK. That is what happened, not this crap about the government made us lend the money.


Excellent job of summing up what took place.