SURE, BAIL OUT FAILING COMPANIES (But who gets rich and who loses?):

MY PAST WARNINGS:

Many years ago I wrote about the (then) coming credit crunch. I wrote about people getting 120% financing on their homes and the loose credit market that didn't do enough to assure good credit ratings of those who borrowed vast amounts of money.

But, I wrote about such things amid various scandals of Bush. Espionage, torture, unnecessary war (and lies to promote the war), and many other issues took precedence, and nobody noticed my dire warnings.

I knew that the real estate market was huge. Far more money was in real estate than all of the companies listed on all of the stock exchanges put together. So, I knew that when a credit crunch affected real estate, it would take down everything else with it, including corporations trading on the stock market.

THE CURRENT PROBLEM:

Today, it is obvious that financial institutions (and therefore almost all corporations) will be utterly smashed if there is not some kind of relief from the government.

AIG, Lehman Bros., Fannie Mae, Freddie Mac, Countrywide Financial Corporation (largest home lending agency in America), and others led the way to financial doom for the world. Many financial gurus who used to tell others how to manage their money were hit by this credit crunch.

Bush dismissed this as a minor glitch, but now that it is obvious that AIG had to be bailed out, even Bush admitted (without accepting any blame, of course) that this is a major financial emergency. Bush should not have allowed such loose lending standards, and he should not have tried to DEREGULATE the lending industry.

WHO GETS RICH AND WHO LOSES?

Obviously Fannie Mae and Freddie Mac were privately own and government regulated industries. Surely when a company loses money, the investors should be hit the hardest and it is not the responsibility of the taxpayers to bail them out. Perhaps such industries should be publicly run (given the important tasks that they perform, and that a financial disaster would result in world-wide catastrophe).

Bush's method is to allow corporate executives to get multi-million dollar golden parachutes (resigning their jobs for millions of dollars), and the bankrupt companies will have to pay them before the disaster deprives everyone else of their hard earned money.

Bush's method is to use taxpayers money to bear the losses of bad financial regulation and bad financial planning of privately owned companies, and, after the bail out, those companies will remain private. It seems to me that the government should bail out the companies (to prevent global financial meltdowns, but should take over the privately owned companies. Why should private investors who legitimately lost their money get their money back at taxpayer's expense?

Bailing out failing companies is not following FREE MARKET standards! I say if socialism isn't good for humans, it definitely isn't good for corporations. Let them die. They got here because they weren't good at business, they shouldn't be in business.

Sorry, its hard to care about a corporation when I'm watching millions of humans go down the toilet while our government hands out all our tax money to corporations to save the CEO and still flush the actual laborers down the toilet.

We have got to get these fools out of office. They have their heads so far up their own backsides they can't see a damn thing and they are taking the rest of us down with them. It is way past time for change. Way past time!

What fools are you talking about? Those in office are not fools. They and their cronies have pocketed the billions which have been stolen from the true fools -- the inert, complacent American Middle Class.

What these sonsabitches have done calls for aggressive revolutionary political action but what are we seeing?

Pay special attention to #5 & 6 on Krugman's list:

http://www.crooksandliars.com/2008/09/20/d...k-for-bailouts/

Both those are DESPERATELY needed at a minimum.

I heard this on Amy Goodman's Democracy Now! program (September 17, 2008)

http://www.democracynow.org/2008/9/17/us_s...rol_of_aig_with


Michael Hudson is the president of the Institute for the Study of Long-Term Economic Trends, an economics professor at the University of Missouri, Kansas City, and author of Super-Imperialism: The Economic Strategy of American Empire. He is also—was chief economic adviser to Congress member Dennis Kucinich. He is currently, as well, as well as when he was presidential candidate.



MICHAEL HUDSON: That’s his constituency. His constituency are the people who have caused the crisis. That’s who he’s representing. Now, of course, you’re not going to come in and say, “I’m going to support the people who have caused this crisis at your expense.” If you’re going to bail out your constituency, you’re going to say exactly the opposite. So what he’s saying has no reality at all.

These are the people who sang, “There’s no money for Social Security. We’re going to have to privatize it. We’re going to have to turn over your Social Security to Bear Stearns, to AIG”—to the very people who have shown how they’re mismanaging money. Imagine if the Republican program had gone through and Social Security had been privatized and these were the jokers who were managing your Social Security. They’d stick you with the losses.

So, these are his constituency. He knows he’s not telling the truth. He’s not paid to tell the truth. He’s pretending that it’s a crisis that has to be bailed out, that it’s the financial system. But it’s not the financial system that’s being bailed out; it’s the debt system. And it’s the debts that the homeowners own and the industry owns. And now the government is coming on the side of the creditors, who are going to close down the industries, sell them off to pay the debts, foreclose on the houses, sell them off to pay the debts. And the economy is going to shrink and shrink. That’s the program that they’re standing for.

AMY GOODMAN: They’ve always said that Social Security can’t be bailed out, but that it’s going broke.

MICHAEL HUDSON: That [inaudible] bailout. They’ve already spent $5 trillion in the last two weeks to double the size of the national debt by taking over Fannie Mae. How can they bail out the gamblers, how can they bail out Wall Street and not—and claim that the Social Security system doesn’t really exist? They’ve used the Social Security money basically for the bailout. There it goes. They’ve made a choice. The choice is to bail out Wall Street against the people.

The Treasury is supposed to represent the government and the economy, and the Fed is supposed to be the board of directors of commercial banks, but now Wall Street plays both sides of the game. It not only supplies the heads of the Fed; it supplies the Secretary of the Treasury. And that’s why I said the class war is back in business with a vengeance.

Thanks for that link. I am livid at this bit in the proposal:

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

This is totally bullshite. We are getting hosed, with no recourse. Unless we act....

u make great points...but i have been battling with myself as to what do we do...do we give bailout or go into a deep recession or possibly depression....i want to take the classic approach and let the markets work themselves out b/c I believe the only losses will be to CEOs bonuses....but I could be wrong look at lehman, they are gone out business!

And all the American tax payer complains about is welfare for single women with children, but don't dare permit abortion what a fucked up backward nation we have become!

No US Congress in its right mind would go along with that kind of unfettered discretion given over to precisely the same people who, a week ago, were telling us how sound the system was. Unfortunately, the current US Congress may be as bad as the Bush administration is.

It seems pointless to say we must act to prevent a Congressional cave-in. Thus far, Pelosi has shown herself to be utterly inept.

It is inconceivable to me that this Congress will allow this, but they have obviously been scared stiff in that meeting. Pushing them to act quickly is mostly a ruse, IMO, to limit the time for review and rebuttal from qualified minds outside of the Beltway. This is all just too convenient. This guy is from Goldman Sachs, for chrissakes. What are they THINKING??

120% financing?



and



That's dupid! I thunk 100% was the max. Silly me.

If these companies are being bailed out because too many people are defaulting on their mortgages, then what is the rationale for people to keep paying their mortgage? The lenders are receiving their money back from the government. Making mortgage payments now would be akin to giving gifts to the lender. Why should people have to pay on debt the government has cleared?

Say no to the Execs of these failed companies from getting golden parachutes........

House Financial Services Chairman Barney Frank (D-Mass.) argued Sunday that companies receiving taxpayer-funded bailouts should not be allowed to offer their executives lavish compensation ...

"I don't want the federal taxpayer to be at risk for their bad debt and then the guy who incurred the debt gets tens of millions of dollars on the way out the door," Frank said on CBS's "Face the Nation."

more -

http://www.cbsnews.com/stories/2008/09/21/...ce=search_story

Ben Stein........yes that Ben Stein, calls for regulating the markets..........

http://www.cbsnews.com/stories/2008/09/21/...in4463250.shtml

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I glanced at a political interview yesterday. As I watched, a Republican pundit said that the crisis was an emergency that would affect financial markets around the world and we needed to act quickly and use emergency power to fix it or the economy of the entire world would melt down. He kept saying that this is such an emergency that we have to ignore the cheats who are making huge fortunes. He acknowledged that there were those who kept two sets of books, one for the IRS and investors, and the real book for crooks. He acknowledged that there was a lot of illegal insider trading. I believe that we can catch the crooks and fix the system at the same time.

I've heard Chicken Little "the sky is falling" remarks from Bush before. Remember the WMD, and the phrase "mushroom clouds" of nuclear bombs over our cities, phony "Orange Alerts" which Tom Ridge (head of Homeland Security) said came from superiors (supposedly Cheney or Bush). Ridge's remarks were on the Paula Zahn show.

In this case, I think that the Bush administration really did foul up. This is not a "sky is falling" scare again. Loose regulations created this disaster (remember that the Republican party, from the time of Reagan, were touting deregulation. That is part of Reaganomics which says that we should decrease the size of government to save taxes and take costly regulations off of corporations so that they function better. Reaganomics collapsed banks during Reagan's term, also.

So we do need emergency measures, but I believe that investors in Fannie Mae et al should take their lumps. They should have seen this coming.

SOCIALISM:

Pure Socialism doesn't work because there is no incentive for people to work if they get paid the same anyway. There is no incentive for a doctor to get all that education if he will earn the same as a bank teller or teacher.

Pure Capitalism doesn't work, either, because it leads to a Monarchy (one person with all of the wealth and power) or Oligarchy (a small group with all of the wealth and power). Capitalism even affects the government (Powerful PACS bribe politicians with meals, money, vacations, gifts, advertising, etc. Powerful corporations buy newspapers and other media and slant the news (this already happened, and this is why people need to listen to Randi Rhodes instead)).

We need to strike a balance to make sure that the tax money is spent to benefit all of the citizens and still assure that they work. We need government run long term care for the elderly (Not the horrible care that they receive now. Nurses don't come for hours while patients lie in their own feces). We need free lab checks for the main killers (cancer, clogged arteries and cholesterol). We need care for the insane, retarded, and injured (a lot of Republicans will try to get paid because they are integrity challenged). Educations benefit corporations as well as individuals, so corporations should bear a greater tax burden to assure that we can hire American workers.

I take to heart the often overlooked preamble of the Constitution that says "promote the general welfare." That is what we Democrats want, and that is what Republicans oppose.

REPUBLICANS USE SOCIALISM TOO:

It seems to me that virtually any public use of tax money could be "tarred" with the name "Socialism." That includes Bush's use of the military, roads to transport manufactured goods and transport people to work and play, schools, etc. It seems that Republicans draw the line at free health care. I suppose that they would rather spend their money blowing up Iraq than saving the lives of human beings (some Christians, huh).

Bush uses corporate subsidies to boost the sale of US goods abroad. This makes it "look" as though the US is still productive, but it is actually costing a lot (and the cost adds to the National Debt). I believe that the bulk of the National Debt is from these subsidies.

Bush, therefore, is not using free market economics. He is using "managed" economics, and that management is costing us a fortune. It also violates the precepts of Capitalism. Capitalism demands free market economics to seek out the best deals with the "invisible hand of Capitalism" (as described by Adam Smith, the founder of Capitalism, in his book, A Wealth of Nations). It is impossible for Capitalism to automatically lower sales of inferior companies if Bush is artificially propping them up with subsidies. So, inferior companies thrive, contrary to the rule of Capitalism.

SUMMARY:

What it boils down to is this: Do we want to spend money to help people or not?

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What we are seeing is McCain declaring that he can take on these finance folks who caused this disaster because he is tough and has taken on bigger and tougher opponents than this in his long career. I loved Obama's remark that it would be called a staff meeting. Lol, yes, McCain is part of this crew of cheats and "deregulators" (coined term). McCain may not be paid directly to cheat, but he is politically protecting those who do.

I hate to make black and white distinctions in a world of tender shades of gray, but this is literally like star wars. Obama Wan Kenobi must defeat the evil Darth McCain.

Republicans stand for useless wars, torture, corporate greed, no help for the starving (no Christian charity), etc.

I think that Republicans want social programs to fail so that they don't have to pay for them anymore. To this end, they want Medicare to overspend (to get rid of it once and for all). They want evil and greedy corporations to manage old age safety nets so that they can take away those social programs and have the added "perk" of moving funds from old citizens (who paid for Medicare out of their paychecks every week) to the pockets of slick corporate fat cats.

So, Republicans want to kill Socialism and get rich too. All the while, they run campaigns saying that they want to help the elderly and the poor.

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stolen from wayne........

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