Treasury Secretary Henry Paulson at the conclusion of the G7 conference of the major industrialized nations announced that the U. S. Government is going to be buying stocks of financial institutions. Granted, these will be non-voting shares giving the government an equity ownership interest in these financial institutions.
Theoretically the government will not have the ability or power to run these corporations. But I don’t believe for one minute that an organization as large as our government will not have influence over these institutions. Here’s a scenario. The government wants the institution to do something and they balk at it. All the government has to do is to say that they’ll dump the stock if they don’t follow through!
This is already in addition to the $700B package in which we’re already buying distressed assets to remove them off the financial institutions books. That process makes the firms appear healthier and better able to resume what they are calling a ‘normal’ lending operation.
One question is, should the government be getting into the business of purchasing stocks in financial institutions? What does this overall mean to us? We’re already sometimes equated to second class citizens with lobbyists and big business winning out over us. Will this further mean that the financial well-being of these industry giants outweigh that of Joe Schmoe on the street?
This is all happening too fast and it’s being pushed down our throats. We’re being told that this needs to be done and also has to be done quickly. Yes, we’re supposed to believe that our legislators are looking out for our best interest, but we’ve seen enough of big businesses and lobbyists influence on them and the ensuing corruption. I apologize if I appear cynical – I’m just very concerned for us and our well being. Neither do I have the answer either!
The more I learn of these matters, I keep on having the concept of Socialism roaming around in my head. I know, that’s a scary situation in and of itself. Yes, we are far away from such, but doesn’t this concept push us more and more closer to it?
Would love to hear your thoughts.
See you next time at Marc’s Corner…..