Yes, we all know that this is the administration that robbed from the poor and gave to the rich and there are countless examples of that. The most obvious one are the lucrative contracts given to friends of the Bush Administration in Iraq paid for by the US taxpayer. And this was generally true…. until the current financial bailouts. My view on what the Bush Administration is doing lately is that shock, shock, shock, they are stealing from the rich and giving to the poor.
I know most of you will think I am wrong. And I may be, as only time will tell. But allow me to make my point. My thinking here is that when confronting the property bubble, Wall Street analysts have underestimated the ability of the average US citizen to pay his/her mortgages. This has depressed the mortgage asset class beyond reason.
I believe that over the next 20 years, many of these “worthless” mortgages will turn out to be very valuable and partly or fully repaid. As a result, I think that by buying these mortgages on the cheap from Wall Street the US government will engage in a gigantic Robin Hood like effort and steal from the bankers and give to the average tax payer. Moreover, Paulson and the guys now at Treasury are bankers and they think like bankers. They are hired guns who make money for whoever they work for. And now they work for the US Treasury and they are making the deals of their lives, but, paradoxically, on behalf of the American people.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars