Crying Uncle

Forbes magazine says, "Enough is enough:"

Stop dawdling around. We need a Chrysler-scale bailout of the monoline insurers, which are a crucial linchpin of our financial system.

These insurers--which deal in a single insurance product, usually those that guarantee bonds, complex derivatives and other mortgage-type securities issued by banks--are now becoming a wall of worry stretching from Wall Street to Washington.

Many of our most profound problems in the credit markets that are now whacking the stock market and the economy at large began when these insurers, in the interest of greater profits, started deviating from their initial purpose--to guarantee municipal bonds.

There are few things more pathetic than the captains of industry and the patriots of the new American financial revolution crying to Uncle Sam as soon as their greedy schemes turn to feces.

The monoline insurers chose to leave the (relative) safety of insuring government bonds in search of higher profits. Fair enough, I have no problem with people accepting risk in search of reward. But they put their seal of approval on all manner of subprime toxic waste that was sold all over the world to unsuspecting investors who paid top dollar for bonds "guaranteed" by these insurers. Those investors won't get their money back because the insurers can't stand behind their guarantee*, yet the insurers want to be bailed out with the tax money of the same people they just screwed by selling them subprime debt?

Wow, is that chutzpah.

Everyone loves capitalism** until their schemes to weave gold from straw come up empty; then it's time to cry out for some else to take the loss, someone else to take the blame. I have a daughter who cries when her hair is brushed. She has a higher pain tolerance than Wall Street financiers.

* And there was no way they ever could. But they accepted the fees just the same.

** The press calls it capitalism and even the capitalists call it capitalism. However, there is a word for an economic system under which all the risks of productions are socialized under a government which creates economic plans for them all. And it ain't capitalism.