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TechnoratiBush: Bank Buyout Needed 'To Preserve Free Market'
The White House plan marks the first such deep government intervention in markets since the Great Depression. Bush noted that he didn't take the aggressive and unusual steps lightly, stressing that "these measures are not intended to take over the free market, but to preserve it."
![[Treasury Secretary Henry Paulson (R) and President George W. Bush listen during the evening's entertainment following an official dinner honoring Italian Prime Minister Silvio Berlusconi at the White House in Washington October 13, 2008.
(Kevin Lamarque/Reuters)]](http://www.commondreams.org/files/article_images/bushpaulson1014.jpg "bushpaulson1014.jpg")
Among the bold moves announced an hour before financial markets opened:
- Nine banks have "volunteered" to sell equity stakes worth a combined $125 billion to the U.S. government. The Treasury will get preferred, nonvoting stock. Other banks have until Nov. 14 to offer equity stakes to the government. The Treasury said that $250 billion of the $700 billion rescue plan that Congress approved last month would be deployed for this confidence-building step.
- The Federal Deposit Insurance Corp. will temporarily guarantee all new senior debt issued by FDIC-insured banks, thrifts and holding companies. This move addresses the freeze in short-term lending between banks, which threatens to paralyze the broader U.S. economy. Essentially, the FDIC will insure loans between banks until the crisis subsides. It will be paid for by premiums and transaction fees.
- The FDIC will guarantee all non-interest-bearing accounts in banks and thrifts that it insures. This is a new and important wrinkle to help smaller businesses across the United States. The FDIC recently more than doubled the insurance it provides on bank deposits to $250,000. But that figure didn't cover a lot of businesses that maintain accounts for purposes of payroll and cash flow.
All these steps had been signaled late Monday night, and rumors of a change in the original action plan sent U.S. stocks soaring to record single-day point gains. The Dow Jones Industrial Average rose 936 points Monday, and soared almost 400 points on opening Tuesday.
Treasury Secretary Henry Paulson last month pushed a rescue plan that sought to purchase distressed assets from banks and other financial firms, mostly toxic mortgage bonds that no one wanted to buy. It took two tries to get the plan through the House of Representatives, however, and the financial crisis spread globally, aided by Europe's inability to forge a common response in early October.
As the crisis deepened, Europe eventually adopted on Sunday an approach first pushed by Great Britain, namely guaranteeing loans between banks and taking stakes in banks to signal that these institutions won't be allowed to fail. Washington followed suit Tuesday morning.
"Government owning a stake in any private U.S. company is objectionable to most Americans, me included," Paulson said. "Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable. When financing isn't available, consumers and businesses shrink their spending, which leads to businesses cutting jobs and even closing up shop."
With the recent congressional battle still fresh in mind, Paulson stressed that the new, more comprehensive approach wasn't a giveaway to banks and other lenders.
"Institutions that sell shares to the government will accept restrictions on executive compensation, including a . . . ban on golden parachutes during the period that Treasury holds equity issued through this program," he said. "In addition, taxpayers will not only own shares that should be paid back with a reasonable return but also will receive warrants for common shares in participating institutions. We expect all participating banks to continue and to strengthen their efforts to help struggling homeowners who can afford their homes avoid foreclosure."
Not all nine of the banks that are participating in the government's equity purchase program did so voluntarily. Paulson met with their executives late Monday and let it be known that it was in their interest to participate, calling the move patriotic. One reason for the reluctance was that the Treasury will curtail the lucrative executive compensation and bonuses for top bankers who participate in the program.
The nine initial banks taking part are Bank of America, Merrill Lynch, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, State Street and Wells Fargo.
In another important development Tuesday, the Federal Reserve set Oct. 27 as the date to begin purchasing commercial paper from U.S. corporations. This paper is a short-term promissory note that helps corporations fund their day-to-day needs, but the market for this staple of finance has dried up amid the credit crisis. The Fed announced earlier this month that it would bypass banks and lend directly to corporations through the Commercial Paper Funding Facility. The lending will occur only on three-month notes that have the highest rating.
Bush sent a letter Tuesday to the leaders of the House and Senate, informing them of his intent to spend $350 billion to purchase distressed assets from troubled banks and financial firms.
The Treasury's point man on the rescue plan, Neel Kashkari, on Monday unveiled a number of appointments and hires designed to move on the purchases in coming weeks. He noted that he won't buy only complex mortgage-backed securities, which involve pools of thousands of mortgages, but also whole loans. These are individual mortgages held by banks, many of them community or regional banks. The distinction means that the Treasury will aim to remove bad assets from banks both big and small in an effort to remove obstacles to lending.
125 Comments so far
Show AllAll these fellows are trying to do is preserve the system which is at fault, even if that means at your ever greater cost:
http://perfecteconomy.com/pg-if-i-were-president.html
mike montagne — founder, PEOPLE For Mathematically Perfected Economy™, author/engineer of mathematically perfected economy™ (1979)
What is your opinion of a tax on derivatives as proposed by Ralph Nader?
OMG! The Neocons do stack shit that high! And there WILL come a day,,, and the People will throw that piee of shit bumm out of America on his ass!!!!!
Coffeelover,,,,,,
Nietzsche
Could whoever is sitting next to George slap that stupid grin off his face?
If we can get one step closer to understanding that the market has never existed any way except with support from the state, we'll be one step closer to pulling out the stops on this thing. Anything that outs the market cult is good right now.
Carol
I am sick of all of this going ons but what I am really sick of all these people of wealth walk around as though there in the same boat as all of us and just not true. Just by the body is jerking around and they never stand directly looking at us they are really hiding a lot just look at their faces and it says volunes and volumes and that is a fact.
This what I want everyone to do before you vote for someone we don't know anything about TODAY.
I want everyone to look up BARRY OBAMA and see what you come up with if don't believe me just look it up. I found a new seach engine by the name of cuil.com but you can look anywhere again BARRY OBAMA. THANK YOU!!!
That puke-head, fascist Berlusconi belong right there with Dubya and Paulson. Reverse Robin Hoods.
metal: your post is political satire at its best (especially the part about the stupidity..)
MiMiCcS: Excellent post - you have hit the nail on the head:
"The problem is not recognizing the problem. Government does not need to tax or borrow all the money it spends. It can create it's own money and loan it at interest, or just spend it on infrastructure and social welfare like national health care.
Allowing private international bankers the monopoly to create our money and determine who can borrow it is national suicide..." Absolutely.
There seem to be many people here who still believe that money is actually created by the government with the printing press but this is only the cash that is circulating (about 10% of all "money").The zillions that make up the credit system are in fact imaginary money created BY THE BANKS through interest.
I have tried to point out this root cause of the debt problem before - I keep repeating myself here, sorry, but those not familiar with the problem pls watch this video to see why we all have become slaves of debt:
http://video.google.de/videosearch?q=Money+as+Debt&emb=0&aq=f#
Here are two quotations from the video:
"Until the control for the issue of currency and credit is restored to government
and recognized as its most conspicous and sacred responsibility, all talk of sovereignity of parliament and democracy is idle and futile."
"Once a nation parts with control of its credit, it matters not who makes the nation`s laws, Usury once in control will wreck any nation."
William L. M. King, fmr. Prime Minister of Canada (who nationalized the Bank of Canada)
"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented.
Bankers own the earth. Take it away from them, but leave them the power to create money and with the flick of a pen they will create enough money to buy it back...
Take this great power away from them and all great fortunes, like mine, will disappear, and they ought to disappear for than the world would be a better and happier world to live in.
But if you want to continue to be slaves of banks and pay the cost of your own slavey, then let the bankers continue to control credit (and create money)."
Sir Josiah Stamp, Director of the Bank of England 1928-1941 (reputedly the 2nd richest man in England at the time)
In my view the crux of the "credit" crisis can be found here:
”Even an accumulation of debts may appear as an accumulation of capital, (so) the height of distortion taking place in the credit system becomes apparent.”
(Marx, Capital, Vol. III, Chapter 30: Money Capital and Real Capital)
Note: Marx´ analysis of capitalism is excellent and has nothing to do with the perverted system of soviet communism.
Wow, someone who knows what he is talking about!!!
I am a retired teacher and have a 403B (Kind of like a 401K) with AIG....I just got my statement and newsletter. (Sorry, I live in Spain and mail takes a while.) On the back of the newsletter was this two line statement, "AIG entered into a new Real Estate Agreement with IVESCO and Goldman Sachs in May of 2008"
Whoa Nellie!!!!! You mean the same company that Henry, I am Goldman Sachs Guardian Angel, Paulson came from and Directed for the tune of earnings of 700 million dollars and is now handing out checks for 10 or 25 BILLION DOLLARS to the same people that created a World Crisis, entered into a Real Estate deal with AIG who now claimed 85 BILLION DOLLARS from the U.S. Government and wants more.
No ! Look at the companies that will be contracted by the U.S. Treasury to hand out the checks......every one will be charging atrocious fees and they are all connected to Wall Street and were probably part of the scheme to privatize Social Security.....
Some people have said that Kennedy wanted to get the control of the money back into the government´s hands and out of the banks????? Am I right???
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http://www.pbs.org/newshour/bb/politics/july-dec08/nader_10-14.html
Ralph Nader PBS Interview:
If you make the speculators pay for their own bailout, then there's a relief throughout America that there's some fairness coming out of Washington.
A 0.1 percent tax on security derivative transactions in one year -- it's going to be $500 trillion of transactions in one year -- is $500 billion. So that alone would make a sense of equity. And you wouldn't put it on the backs of the taxpayer.
England has that kind of tax, by the way, for years. FDR had it. We helped finance the Civil War with it. But after World War II, it was scrapped.
So people go into a store in all your areas where your show shows, and they buy necessities of life, and they pay 6 percent or 7 percent sales tax. Tomorrow, someone in Wall Street can buy a billion dollars of Exxon derivatives, pay no sales tax. That's where the fairness has to go.
.
Preserve the status quo... not free markets... but then again... there is always doublespeak...
Why do I have this strange feeling, that this action to 'preserve the free market' has something to do with US Army troops starting to patrol US cities, all the interment camps that have been built, Bush giving himself 'emergency powers' and the talk of martial law being imminent - all ties together? Might it mean that by 'buying out' the banks, the flow of cash could be stopped immediately when civil disobedience erupts? Something is brewing - either just before, during or right after the November elections.
"Beat LBJ into a Plowshare!"
-1968 anti-war sign
I was griping to my neighbor (an ex-Bush supporter) as we were walking down the back stairs of our building about how when we need $Billions for some serious programs next year it will already be gone thanks to Wall St. & Paulson's mystery sales criterion. A Limbaugh lemming electrician--one of those 'my bro's in Iraq defending our freedom and liberals can all go f* themselves' types with his little yellow 'Support the Troops' ribbon on his Fnord Expecretion--puttering around next to the stairwell glances at me all sullen and says, "Unless Pelosi gets her hands on the money."
I looked at him like I would imagine James Carville looking at the chief of the Alaska Independence Party and said, "No one was talking to you slick, but the point of what I was saying is that the money is already gone. Pelosi has nothing to do with the Fed printing money and she wasn't the one threatening Congressional leaders with martial law if they didn't sign off on the $700 'bailout.' You ditto-heads need to start listening to some actual news for a change." He threw down his cable splitter and started to actually make a move on me--until he saw the Smith & Wesson I had strapped to my chest that I don't leave the building without these days. Five minutes later I called the landlord and had this prick fired.
These Republicans are too stupid to know when they're licked. PT Barnum would have said, "It's the Stupidity, Stupid!"
If only we could forcibly conscript all Republicans and the top 10 DLC people into the Peace Corps and make them go serve the 3rd World for 10 to 15 years.
.I can see why you need to remain armed....
.
We see things, not as they are, but as we are.
Anais Nin
Ardee-ar-arr!
Buzz off back to whatever dead horse you just flew in from.
.Thanks for yet another example....What do you contribute with stupidly hostile crap like this?
Some try to make a difference by persuasion and the use of facts. You think to change the course of this nation by venting and alienating? I own weapons myself, I keep them in locked boxes and a large safe, as the law requires and visiting grandkids mandate..Of course I am not so insecure about the size of my manhood that I have to display a forty five to show that I am, indeed , a man....
.
We see things, not as they are, but as we are.
Anais Nin
What do you EVER contribute with your posts on this site? Half-assed unsupported sound-bite polemics, reactionary snap-backs to justified insults of you for your original snot-ball put-downs (since you ALWAYS start the insults first) and unending hypocrisy evinced by your serene refusal to consider your Anais Nin quote as it most certainly pertains to your own garbled perspective.
And by the way, blow-fly, I'm required to wear a pistol on my job and my neighborhood has been subject to a rash of home break-ins and car thefts lately. That's why I leave the house strapped these days. Fuck you and your typical snake-shit insinuations. "Men" like you and Duhhbya are what is wrong with this nation.
As for persuasion and use of facts--LOL! I've posted more comprehensive, articulate well-supported screeds on this site in the last month than you ever have or ever will. You're too busy constantly bitching like debutante with an infected splinter in your ass.
.You should never, ever be trusted with a gun!
Firstly, I do not believe on single sentence of your sad tale. Who the hell would believe someone who points to his gun in response to a political retort? A nut job thats who! Who is going to fire some contractor because a gun waving moron requests it? You have obvious self image issues and castigating someone for being rude BY being rude labels you for what you are, probably a high school dropout with nothing to be proud of, still living at home with mommy.
Your tale was a phoney, reeks of your own depressive nature and self loathing. Though you certainly have a right to loath someone like you....
.
We see things, not as they are, but as we are.
Anais Nin
What I want to know is "How many executive mega-bonuses were saved" when we bought their stock options with bail-out money "acquiring an interest" in these banks?
The Free Market! What a flop! Bit like the idea of a flat earth.
The free market has fallen flat. Only religious types, the ones who believe in fairy tales, believe in free markets. And the occasional billionaire who doesn't need them anymore!
This crisis shows it's time to bring back the pillory. Remember it, the pelting and the jeering? No? It had great redeeming social value. Want to know more?
www.dangerouscreation.com
Keep in mind among the banks in which the United States Government is taking an equity position are banks that have recently bought up other failed banks, such as JP Morgan and Wells Fargo.
These are allegedly "Healthy Banks".
The US Governmnet is financing the mergers with tax payer dollars.
Now any merger tends to see the initial money sunk into such as an expense. In a normal business enviroment the two groups that merge and or where one is bought out takes several years in order to see a return on the investment.
What is happening here is the US Government is financing the "costs".
Its a sweetheart deal for JP Morgan and it does nothing to "free up credit" it just gives them a free ride on the back of the taxpayer.
PK
Do l understand this correctly the people who so vehemently oppose gun control are ready to give the government title to the house? Whoops you missed a payment on your mortgage and we found out you read Common Dreams on the computer: your evicted!
Any market that requires trillions to bail it out is hardly free. If I am being forced to invest in banks (that I got out of months ago) I want equity and some control.
I want the deal Warren Buffet got.
Capitalism is based on ever increasing growth. Sounds all fancy until you remember the earth is one size only. 'Freemarket' is really just a cover word for 'this is a stick up'.... robbing poor people of their labor and resources the globe over.
The problem is not recognizing the problem. Government does not need to tax or borrow all the money it spends. It can create it's own money and loan it at interest, or just spend it on infrastructure and social welfare like national health care.
Allowing private international bankers the monopoly to create our money and determine who can borrow it is national suicide. It is why our infrastructure is decaying, why we have not developed alternative green fuels, and why industry chooses to move it's operations elsewhere (health insurance burden is overwhelming). Private bankers will not loan money for long term projects that may or may not be profitable, this hurts the year end bottom line and reduces CEO's bonuses. Thats why the public sector must be allowed to create it's own money and spend it or loan it into the economy in the best interests of the country.
Until this one fundamental concept takes hold, nothing will improve. It's like watching people on a treadmill. A lot of effort and spent to stay in the same place, or go backward.
Since JFK, every President has spent more than what comes in putting our country in greater debt than any country in the history of this world. For the last 20+
years, each President has gone to great links to avoid an economic meltdown on their respective watch and the current Bush is no different. Regardless, we will pay soon for these wrongs - and this will be right by not sending our wrongs on to another generation to pay for it. The private sector has been equally bad on building debt, and both parties are to blame.
Please give us back the days of President George Washington and the few that followed him, where serving as President was a gift back to the country, and speding the government money was cherished as one's own. It was service then - not another step forward in a political career as it has been for these past 100+ years.
$25 Billion is going to Wells Fargo, which is apparently able to buy Wachovia for $12.5 Billion.
The AIG crew were bad corporate citizens for years ... it received an $85 Billion bail-out.
Paulson's Wells Fargo donation should be stopped:
http://www.google.com/search?hl=en&rlz=1T4RNWN_enUS215US215&q=Wells+Fargo+sued&start=30&sa=N
ISRAEL and the EXODUS of AMERICA'S WEALTH:
During George Bush’s recent trip to Israel he was told, in effect: "Give us the wars we demand or we’ll take the world down piece by piece, starting with America."
http://www.thetruthseeker.co.uk/article.asp?ID=9513
Alan MacDonald
'Free market' ideology in a system which allows the well known 'market failure' of 'negative externality cost dumping' to be 'gamed' is nothing but 'free looting' --- ie. a giant Ponzi scheme.
"- Nine banks have "volunteered" to sell equity stakes worth a combined $125 billion to the U.S. government. The Treasury will get preferred, nonvoting stock."
What a deal! We the People give them 840 billion and they give our corporate politicians back 125 to do what they wish, plus We the People don't get any stock or voting rights.
To get rid of Social Security, Medicare, Taxes and government programs to make Republicans happy and to make us all happy, all that's needed is to incorporate We the People and give equal, non-transferable shares of stock in our public treasure to every American citizen.
Nader for EPA Chief.
Kucinich for Department of Peace
Sanders for Attorney General
Paul for Surgeon General
Feingold for Secretary of State
Dodd, Dorgan, Wyden, Leahy, Waters, Waxman, Wexler, Abercrombie, Meeks, Jackson Lee, Lee, etc. for Cabinet and Department posts
But please, no more Bush/McCain/GOP.
.
Nader can win....... The voters will decide.
Nader will change things.
Nader is our only hope.
Nader is the only choice.
Fight the Two-party system.
VOTE NADER 2008… You’ll be glad you did and so will I…
http://www.votenader.org/index.html
.
I love Nader but you are far from reality.
If the corporate government was to nationalize anything to the possible benefit of the people, our government would nationalize the Federal Reserve... These private globally connected National Banks control everything including the War Machine and are the debt creating money credit machine that is the problem all over the world. We the people will have to take ownership of our nation for once before anything good really changes.
Creating something from nothing is the big lie from "Bible Creationism" to the "Big Bang Theory". The public's mind has been conditioned to accept these fables but now even the majority of people are skeptical.
They are just crooks telling us that more new Debt bigger than anything the world has seen will solve the Debt problem... and they aren't even sure it will solve anything. This may temporarily help the Stock market (Woopie) while the market goes up and down driving the people into the ground!
They are just diggin the black hole deeper.
This is gonna be a long revolution. If anyone can get it right, maybe we can.
This is an article by a real conservative. I'd like to know what you guys disagree with? I wouldn't usually do this, but its very good I think.
"Liquidating the Empire
by Patrick J. Buchanan
"Liquidate labor, liquidate stocks, liquidate the farmers."
So Treasury Secretary Andrew Mellon advised Herbert Hoover in the Great Crash of '29.
Hoover did. And the nation liquidated him -- and the Republicans.
In the Crash of 2008, 40 percent of stock value has vanished, almost $9 trillion. Some $5 trillion in real estate value has disappeared. A recession looms with sweeping layoffs, unemployment compensation surging, and social welfare benefits soaring.
America's first trillion-dollar deficit is at hand.
In Fiscal Year 2008 the deficit was $438 billion.
With tax revenue sinking, we will add to this year's deficit the $200 to $300 billion needed to wipe the rotten paper off the books of Fannie and Freddie, the $700 billion (plus the $100 billion in add-ons and pork) for the Wall Street bailout, the $85 billion to bail out AIG, and $37 billion more now needed, the $25 billion for GM, Chrysler and Ford, and the hundreds of billions Hank Paulson will need to buy corporate paper and bail out banks to stop the panic.
As Americans save nothing, where are the feds going to get the money? Is the Fed going to print it and destroy the dollar and credit rating of the United States? Because the nations whose vaults are full of dollars and U.S. debt -- China, Japan, Saudi Arabia, the Gulf Arabs -- are reluctant to lend us more. Sovereign wealth funds that plunged billions into U.S. banks have already been burned.
Uncle Sam's VISA card is about to be stamped "Canceled."
The budget is going to have to go under the knife. But what gets cut?
Social Security and Medicare are surely exempt. Seniors have already taken a huge hit in their 401(k)s. And as the Democrats are crafting another $150 billion stimulus package for the working poor and middle class, Medicaid and food stamps are untouchable. Interest on the debt cannot be cut. It is going up. Will a Democratic Congress slash unemployment benefits, welfare, education, student loans, veterans benefits -- in a recession?
No way. Yet, that is almost the entire U.S. budget -- except for defense, the wars in Afghanistan and Iraq, and foreign aid. And this is where the axe will eventually fall.
It is the American Empire that is going to be liquidated.
Retrenchment has begun with Bush's backing away from confrontations with Axis-of-Evil charter members Iran and North Korea over their nuclear programs, and will likely continue with a negotiated peace in Afghanistan. Gen. Petraeus and Secretary Gates are already talking "reconciliation" with the Taliban.
We no longer live in Eisenhower or Reagan's America. Even the post-Cold War world of George H. W. Bush, where America was a global hegemon, is history. In both relative and real terms, the U.S.A. is a diminished power.
Where Ike spent 9 percent of GDP on defense, Reagan 6 percent, we spend 4 percent. Yet we have two wars bleeding us and many more nations to defend, with commitments in the Baltic, Eastern Europe, and the Balkans we did not have in the Cold War. As U.S. weapons systems are many times more expensive today, we have fewer strategic aircraft and Navy ships than Ike or Reagan commanded. Our active-duty Army and Marine Corps consist of 700,000 troops, 15 percent women, and a far higher percentage of them support rather than combat troops.
With so few legions, we cannot police the world, and we cannot afford more. Yet, we have a host of newly hostile nations we did not have in 1989.
U.S. interests in Latin America are being challenged not only by Cuba, but Venezuela, Bolivia, Ecuador, Nicaragua and Honduras. Brazil, Argentina and Chile go their own way. Russia is reasserting hegemony in the Caucasus, testing new ICBMs, running bomber probes up to U.S. air space. China, growing at 10 percent as we head into recession, is bristling over U.S. military sales to Taiwan. Iran remains defiant. Pakistan is rife with anti-Americanism and al-Qaida sentiment.
The American Empire has become a vast extravagance.
With U.S. markets crashing and wealth vanishing, what are we doing with 750 bases and troops in over 100 countries?
With a recession of unknown depth and duration looming, why keep borrowing billions from rich Arabs to defend rich Europeans, or billions from China and Japan to hand out in Millennium Challenge Grants to Tanzania and Burkina Faso?
America needs a bottom-up review of all strategic commitments dating to a Cold War now over for 20 years.
Is it essential to keep 30,000 troops in a South Korea with twice the population and 40 times the wealth of the North? Why are McCain and Obama offering NATO memberships, i.e., war guarantees against Russia, to a Georgia run by a hothead like Mikheil Saakashvili, and a Ukraine, millions of whose people prefer their kinship to Russia to an alliance with us?
We must put "country first," says John McCain.
Good post Thomas More! John McCain, with countless homes and cars is hardly a candidate to put country first. McCain is Minime.
Yes, I read this on antiwar.com. Lots of conservatives and liberals there agreeing on the idiocy of our military empire.
I guess thats something I've been trying to say all year. I believe conservatives and liberals are closer together than they hasve been in years. Together we could kick butt.
Here's my take on Buchanan's article, Thomas. It needs to be said right away that Buchanan is not a Bush-style right-winger. He's very intelligent & well informed, but also has a screw loose. So in any given Buchanan article, he gets a lot of it right; but there's almost always something that's far off the mark, as well.
Here he says,
"The budget is going to have to go under the knife. But what gets cut?"
- Yes, there must be cuts, he's right about that.
"...Social Security and Medicare are surely exempt..."
- No, he's wrong about that. That's exactly what will be cut.
"...Will a Democratic Congress slash unemployment benefits, welfare, education, student loans, veterans benefits -- in a recession? ... No way..."
- No, Pat has illusions about the Democrats. They are going to slash precisely those things. Just wait and see. It will happen very soon in the Obama administration -- maybe even before he's inaugurated.
"...Yet, that is almost the entire U.S. budget -- except for defense, the wars in Afghanistan and Iraq, and foreign aid. And this is where the axe will eventually fall....It is the American Empire that is going to be liquidated....The American Empire has become a vast extravagance...
- Pat is right that the empire is a great extravagance. And I agree that the empire is exactly what SHOULD be axed. But Pat is predicting they'll actually liquidate the empire, & I think he's unfortunately wrong about that. They'll axe Social Security & Medicare & Medicaid before they even dream of touching the empire.
"but also has a screw loose."
Its been suggested that I fall in that catagory more than once, maybe thats why I see sense it many things he says.
You're right he does get some things wrong, but I have to agree with him SS and Medicare won't get touched. The first politician that truies that will draw back a bloody nub. Think about where the real political power still resides.
I agree they will have to cut some welfare, education, student loans, simply won't be as choice. But it will be the back door welfare priograms like the SCHIP aid to illegal aliens, etc.
I do agree we MUST cut some of our useless military spending as per some of his suggestions. We can field a stronger military, keep our noses out of places we don't belong and cut spending all at the same time.
As he points out our military has been declining in both budget and personell for years and its still the best around and all we need. So cut the budget.
Thanks to you all, I was very curious as to others takes on his thoughts.
.Pat Buchanon is a frequent guest on the McGloughlin Report, one of my favorite NPR shows. I find myself nodding in agreement with him right up until the time he draws a conclusion with which I simply cannot agree.
I agree with Rich that , when a choice must be made, the cuts will come down to that which aids the powerless, seniors, children, the poor, our infrastructure, all will see serious cuts in govt spending. While our military spends huge and unnecesary sums on weaponry designed to fight a world war, and while we fight local wars, while our foreign policies are hopelessly outdated and far too expensive, while the oil companies continue to gouge us all, exporting great amounts of our own domestic oil in order to take advantage of the higher prices paid overseas and keeping great amounts in storage as well.
Your reference to the monies paid out to illegals is , in my own opinion, a right wing smokescreen to avoid thinking about how we are getting ripped off by our own corporations, American citizens all....
.
We see things, not as they are, but as we are.
Anais Nin
Your reference to the monies paid out to illegals is , in my own opinion, a right wing smokescreen to avoid thinking about how we are getting ripped off by our own corporations, American citizens all....
Absolutely not a right wing smokescreen. Its economic fact. And the SCHIP money paid out to illegal alien adults when its supposed to be used for childrens health care still sticks in my craw. But thats minimal compared to the cost of each one each year to each citizen.
The cost is exorbitant, but much more evident in California and Texas, but it is indeed true.
"And the SCHIP money paid out to illegal alien adults when its supposed to be used for childrens health care still sticks in my craw."
Huh ! And the TRILLION dollars weve spent so far on bombing those aliens doesnt ??
The so called SCHIP amount is pennies compared to the billions we spend doing doo-doo, but it takes a conservative to point it out !! 'Pound foolish penny wise' sums it up nicely.
.It would be very helpful if you posted a link to such statistics. Also many illegals work under phony SS's and never collect the withheld funds, which ironically, adds money to the govt coffers....
.
We see things, not as they are, but as we are.
Anais Nin
Chalmers Johnson several days back made a similar case and I agreed with him then. This last weekend, Paul Craig Roberts, former Reagan Asst. Sec. Treas. (now a progressive columnist) also blasted our unaffordable empire and give-aways for crooked finance cronies. He also came up with more well-rounded ideas than Buchanan for helping to restore the economy.
[http://www.counterpunch.org/roberts10122008.html]
"Instead of wasting $700 billion on a bailout of the guilty that does not address the problem, the money should be used to refinance the troubled mortgages, as was done during the Great Depression. [Google: New Deal HOLC program.--metal] If the mortgages were not defaulting, the income flows from the mortgage interest through to the holders of the mortgage-backed securities would be restored. Thus, the solvency problem faced by the holders of these securities would be at an end.
"The financial markets must be carefully re-regulated, not over-regulated or wrongly regulated.
"To shore up the credibility of the US Treasury’s own credit rating and the US dollar as world reserve currency, the US budget and trade deficits must be addressed. The US budget deficit can be eliminated by halting the Bush Regime’s gratuitous wars and by cutting the extravagant US military budget. The US spends more on military than the rest of the world combined. This is insane and unaffordable. [The present system also weds Big Weapons and Big Oil, locking in a paradigm of fossil fuel hegemony that may soon render the global climate uninhabitable for near-future generations of human beings.--metal] A balanced budget is a signal to the world that the US government is serious and is taking measures to reduce its demand on the supply of world savings.
"The trade deficit is more difficult to reduce as the US has stupidly permitted itself to become dependent not merely on imports of foreign energy, but also on imports of foreign manufactured goods including advanced technology products. Steps can be taken to bring home the off-shored production of US goods for US markets. This would substantially reduce the trade deficit and, thus, restore credibility to the US dollar as world reserve currency. Follow-up measures would be required to insure that US imports do not greatly exceed exports.
"The US will have to restore sound lending practices. It the US government itself wishes to subsidize at taxpayer expense home purchases by non-qualified buyers, that is a political decision subject to electoral ratification. But the US government must cease to force private lenders to breech the standards of prudence. [This requires re-regulation of loan originators all the way down to the level of local real estate markets.--metal]
"The issuance of credit cards must be brought back to prudent standards, with checks on credit history, employment, and income. Balances that grow over time must be seen as a problem against which reserves must be provided, instead of a source of rising interest income to the credit card companies. [Restore laws against usury, limit credit card interest rates and rate change triggers back to sane levels, repeal the Bankruptcy Act sponsored by Joe Biden, etc.--metal]
"Fractional reserve banking must be reined in by higher reserve requirements, rising over time perhaps to 100 percent. If banks were true financial intermediaries, they would not have money creating power, and the proliferation of debt relative to wealth would be reduced." [Time to reconfigure the Fed into something that is neither private nor completely governmentally nationalized. The Legislative Branch needs to check and balance the Executive with bi-annual hearings reflecting stronger oversight on the Fed's authority to alter interest rates and print money. Any new incarnation of investment banks should also be required to carry adequate on-hand reserves--something Paulson and Bush's former SEC quack helped do away with in 2004 when Paulson was still head of Goldman-Sachs.--metal]
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Personally, I suspect some cuts will be made to Medicare. And in an economy that will continue to lose more jobs than it creates well into next year it makes more sense in the near term to cut some education and student loan spending from an education system graduating students into an increasingly jobless economy. We don't need more graduates with degrees for which there are no jobs. We need New Deal-type government work programs like the Civilian Conservation Corps (CCC) where the government paid young people directly to work on our failing infrastructure and maintain our national parks. A CCC Green Jobs Program plus alternative energy subsidies could be implemented to retrofit (and install on all applicable new construction) solar, wind and water/heat exchange systems for residential and business structures across regions where these energy systems are most applicable.
New laws could require the retro-fitting (and new development inclusion) of more energy efficient heating, cooling and refrigeration systems for commercial real estate along with subsidies and/or tax incentives for that. This would produce a more efficient and cost-effective national energy paradigm in the medium to long term. A paradigm whose planning and implementation could be exported to other nations--creating jobs for young Americans overseas in a new Green Peace Corps (pun intended). The New Deal's NRA, WPA, REA and other programs provided crucial employment in a wide variety of fields. Some of those programs even helped artists, writers, photographers, map makers and other creative culture figures survive the Depression to help keep our culture intact (back when we still had a real culture that wasn't almost purely derivative or endlessly regurgitated). Something similar would help revive a more creative artistic culture and improve American product design across the board.
The military/petrol empire should be completely overhauled, stripped of cost-plus privatization and all no-bid contractors. Intelligence gathering should be de-privatized. Private corporate surveillance databases that provide services to the government or State election officials should be outlawed and destroyed. Unregulated militias and mercenaries operating on domestic soil should be outlawed. The Military/Petrol complex and our foreign policy needs to uncouple the incestuous relationship between Big Weapons and Big Oil's oil majors and be reconfigured to think in terms of a global commonwealth of nations instead of imperial oil hegemony. Diversified, environmentally sustainable energy development should be the new goal for all nations with new treaties that provide for green technology sharing on a global basis. The ABM treaty and the 1963 treaty banning weapons in space should be restored, new rounds of nuclear disarmament talks should convene on a global basis including Israel and Iran. The president should be given line-item veto power strictly for the budgets of the Dept. of Defense and Homeland Security under special temporary economic emergency powers granted by Congress in order to use that power to evaluate the effectiveness of every military program every three years commencing next year.
Every high school student should be required to study the Constitution and Bill of Rights; watch Ken Burn's The Civil War, Baseball and Jazz; learn more about the New Deal and World War II, including the Marshall Plan and the successful occupations of Germany and Japan and how they differed from the ongoing monstrosity in Iraq; study the Civil Rights movement; study the original Endangered Species Act & Clean Water Acts; read Jacques Cousteau's Bill of Rights for Future Generations; read the Earth Charter. All of the above-mentioned subjects should be taught along with reading lists that examine these subjects in better depth.
There's no way SS will be axed; trimmed up a bit, yes. Who knows what the fuck will happen with Medicare and the health and insurance companies? But, one way or another, we're gonna have to spend less on war or we will end up with a pretty pile of rusting weapons. I gotta think that there's enough brains in America to not put our last sense/cents into a bomb. Hey, I'm an optimist.
What if they cancelled SS and replaced it with universal health care? No more retirement. Work or die.
Everyone: Look at the smirky smile on BUSH's face in the photo! He initiates this latest government plan to take over the banks by day and enjoys an evening of entertainment by night. Why do I have this terrible feeling that We The People are being so fucked over?
That's no smirky smile, EuroDan. Georgie has an expression on his face like something really stinks in here (himself!).
Yep. The Bush bastard is indeed smug looking now that he and his criminal cohorts have gotten away with another huge screwing of the American people. It just never stops.
In the hands of corporate criminals, banks are dangerous. In the hands of government criminals, just as dangerous. However, I am not against the nationalization of banks as long as we have a responsible government in power; people who work in our interest. This, however, would require a massive shift of ideals in America, and a surge of heightened intelligence.
Why would you think that the government which has recently acquired an unprecedented degree of power over the treasure and the people of the United States suddenly become responsible and work in OUR interest?
Well, that's the thing. I know these guys are frauds, but once we manage to finally elect a real government, we can work toward nationalization in benefit to us. This process will take years, though. First we have to somehow educate people out of their ridiculous neo-con, war mongering ideals, and teach people about free, independent media. I'm not very intelligent, as you can see, so I have no idea HOW we can do that. I think the only way to save us is to let things crash and burn. The only way people will learn nowadays is when it's too late. I'm just pissed that we let this happen AGAIN. For God sake, open up a history book once and a while. Everyhign that happened over the last 70 years is going to repeat itself over and over again until there is nothing left to save.
The idea of electing a "real government"...that is, for the people....will not happen by making the same mistake over and over, expecting different results. The current thugs and thieves must be totally replaced. Now, that may take some time, but voting for a third party like Nader will have immediate results and the process will get underway. Voting Repub or Dem will simply allow them to protect their own and continue the theft and the status quo of war, torture, loss of rights and treasure (what's left, anyway!).
Aye, and I want to vote Nader so badly, but then the process wouldn't be immediate because he won't get elected. At least if we have a Dem in office we have a foundation to pressure our government with. I believe that as long as we have people like Kucinich to help us pressure a Democratic government we have a good chance, but only if we are active politically as people.
We have pressured Pelosi and Reid since 2006 and where did that get us? Well over 80% of the public DID NOT WANT THIS BAILOUT....and where did that get us? Vote Dem and get the SOS. It will not change and you will have been fooled again.
Pelosi is a fraud, we all know that. We also need to do things at the local level. It's a lot easier to elect independents at local levels, we should start there. Sure Obama's not we all want, and the Dem's are bastards, but the less republicans we have (aside from Ron) the better, and if we can aqueeze in a few independents than we have a strong base for change.
Can you name one major way in which Obama's policies will be any different than McCains?
His policies aren't too different but I am a naive prick who believes that he's got a good heart somewhere in there. Of course he's gonna say things to get elected, he's a politician. Nader is an amazing man. If only he worked to clean up the Democratic party and make it a true, progressive/liberal party. He's get attention AND he'd still be doing his job.
I know Abraham Lincoln is claimed by the Republicans, but while he eventually brought radical change, he was originally for a preservation of the status quo. It was events that forced his hand.
It seems to me any politician is going to have to say a lot of crap to get him or herself elected. It was what happened over time that revealed to those who couldn't figure it out beforehand who Bush really is, the same could happen differently in different circumstances.
Lincoln may be a good president to keep in mind with regards to this election perhaps, seeing as it's an apocalyptic type of battle somewhat related to the Civil War. And that history tends to repeat itself, the good and the bad.
So the "government" is taking over the banks. Isn't that a little like the tail taking over the dog? The government = Hank Paulson, a Wall Street scion who is currently in a position to shovel not only the contents of the US Treasury into the "free" (unregulated) market, but now can dip into his newly acquired banks as well. The "government," as we have noticed, is no longer you and I and our representatives. It is business interests dressed up in a halloween costume of government, hardly pretending any longer to be a regulatory entity. If public statements about the economy are redolent of public statements about the war (childish, simplistic, non-substantive) it is probably because they are written by the same people. We are a long, long way from socialism, but structurally very close to fascism. The corporate oligarchy can run the show without the need for coercion or brutality, since public gullibility does the trick just fine. We can rant and rave all we like. We don't rebel because we don't know how.
Public (taxpayer) money is now indistinguishable from bank assets, just as the treasury is now a slush fund for private speculators. The issue of privatized social security is looking a little moot in an era of privatized government. They can see we've become suspicious in recent years, so the rhetoric has been adjusted to excoriate these damned lobbyists and special interests. Our candidates are all dressed up in their St. George outfits this year, their mouths pretending to be as outraged as we are while their hands continue to fork over bags of loot the those same villains.
It's because we are.
"Government owning a stake in any private U.S. company is objectionable to most Americans"
The Paulson chimp does NOT speak for the American people. Commerce should be limited to serving the better interests of the society. You can instill this value in the people through academic, cultural and civic communications. But grass-roots word of mouth is much better because it's much less prone to sabotage. Failing to instill this principle, you have to fight to prevent commerce from destroying the society. But the USA fails to take any responsible action, except at the last minute as commerce sets the society "on flame". Individuals can help enforce a public policy that limits commerce to serving the better interests of the society, by shifting their individual exchange/association away from the power centers and toward their local communities. This puts the economic/political power in the hands of the people where it belongs, so that commerce and everything else may be directed PROACTIVELY by and for the people.
"these measures are not intended to take over the free market, but to preserve it."
The chimp means instead of burying Friedmanite capitalism six feet under they decided to seal it in a glass tank of formaldehyde and keep it on display in a mausoleum.
If only.
I'm going to go ahead and 100% agree with you. It's no secret that what's happening here is a despicable lie to the American people telling them that the state of what's happening on Wall Street and with these banks directly impacts all of us. Sorry, but that's just not the truth. What was at stake here was the class status of CEOs and shareholders and absolutely NOT the well-being of every other American. Milton Friedman is one of the most misrepresented figures of the past half century. He was an elitist who experimented his ludicrous ideas on third world countries experimenting with socialism (countries that without Friedman and the US' intervention would be booming economies and beacons of light in the world for freedom and human rights). Anyone or thing that associated or associates themselves with the theories of Milton Friedman DOES NOT have anyone's interest at heart but their own.
Bush, Paulson & the stock market are delighted with the bailout. This fact alone indicates that it can't be trusted. The bailout has nothing to do with improving economic prospects for most of the US population. Rather, it's a massive looting -- very likely the greatest heist of all time, pulled off by representatives of the Wall Street establishment in Washington (aka "the US government").
The bailout is not "good news," unless your main concern is the well-being of the big banks. The bailout is an example of government "by the plutocrats, of the plutocrats, & for the plutocrats." Any benefit to the rest of the population is purely incidental. Though they will naturally try to put the best face on things (with false claims that the taxpayer's interests are "being protected," etc), the truth is that the plan is structured to loot the taxpayer to benefit the 9 big banks. Risk is being transferred from banks to the taxpayer, while wealth is being transferred in the other direction. The entire process has been incredibly undemocratic -- all done behind closed doors, in only a few days, with bank CEO's the only persons present. Instead of focusing on the needs of those threatened with loss of their homes & jobs, this plan focuses primarily on helping bank balance sheets.
A society with a sense of justice & accountability would see many of these bank executives being investigated, with many of them being fined hundreds of millions of dollars and sent to prison. Instead, they're the ones making national policy, & have decided, in their wisdom, to help themselves to what's left of the public Treasury. This bailout will inevitably lead to still greater concentration of wealth among the financial oligarchy, & will further cement their unchallengeable control of public policy.
It's not a "nationalization of the banks." It's a "privatization of the US Treasury."
I know the whole F'n mess stinks, but we will now have some accountability on this $250 billion, instead of zip. The people I trust the most generally think it's the best choice in a bad situation. Letting the whole world's economic system stew in it's own juices seems foolhardy to me, it smacks of revenge, which while satisfying for a time, often leads to other less satisfying emotions and realities.
"...we will now have some accountability on this $250 billion, instead of zip..."
- No, you're dead wrong. "We" will not have any accountability. That's why they specifically stipulated that the govt shall buy only "non-voting" stock. Likewise, the talk last week (paralleling Obama's claims in the 2nd debate) were that the bailout would include limits on outrageous CEO pay, bonuses & golden parachutes. This has already been dropped, because the banksters did't like it.
Over the weekend, the NY Times reported, "Industry executives ... also begged Mr. Paulson not to impose tough restrictions on executive pay and golden-parachute deals for executives who are fired.
Mr. Paulson heeded those pleas. In his remarks on Friday, he carefully noted that the government would acquire only “nonvoting” shares in companies..."
In a 'historic' move some pay limits were put in place. Yea, I know it's kinda lame, but it's a start.
What accountability? Will there be neutral citizens groups watching how every cent is spent? This is accountability. What is it about this whole procedure that you trust; especially when the entire administratiion and the MSM has been lying to us from day 1. This is not a rhetorical question.
I was feeling better since Paulson deviated from his original plan till Bush said it was good. He hasn't been right yet.
"Ah, grasshopper, you are now truly on the path..."
--the blind master Po
The middle class and the poor need to be recapitalized adequately or this top heavy bailout will buckle. The fact that it is not being done suggests darker motivations. The insecurities of the super rich will no doubt lead to continued favorable policy making benefiting them and condemning the rest of us. I sense pure evil in all of this.
Bush, the new FDR? The new kid on the block that will save Capitalism?
Probably a "no." W destroyed everything that came his way from the failed oil companies, to the baseball team to Katrina relief, to Iraq and now to this, his latest fiasco: Wall Street and the Lost Empire.
WMD --you are it, "W" !
Dr Wu, the last of the big-time thinkers
Bush's effort to nationalize banks is nothing more than his government filing for bankruptcy. It needs to do something to get cash and quick! People's entire life savings will soon be blocked and swindled.
Government moves again to unclog credit lines by flushing good money after bad.
Egad! This is like draging a dead dog to the vet, over and over again.
Wow, I wish I had $250,000 or more in a bank account.
If I did, not only would life be much sweeter. But then my government might actually give a damn about me.
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
This idea of Bush's, that "nationalizing" the banks... somehow "preserves" the free market... is extremely fascinating.
It's indicative of Bush double-speak that's been rampant for the past 8 years.
Certainly most Americans will take this at face value, but what it's really saying is that making the market more socialized will preserve the idea of unfettered free-market capitalism that Bush has always championed.
Unfortunately when the government controls the market, it is no longer free. Unfortunately for the idealogues who created this rampaging, unethical free market, that is.
Now, I agree with socialism. Unfortunately, this is not socialism - it's government collusion with corporate interest - giving social programs away to support the interests of rich bankers - effectively fascism. Which is what Bush/Cheney and their rich pals want anyway. So it's lose-lose for us AND the "free market".
If we nationalized the oil companies, we might have the money to pay for the banks.
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
Good one.
Back in the 60s we called this "F*&^$ing for chasitity".
MichaelC
"In other words, the government, us, will have no control over how the banksters spend our money."
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Well not exactly-- they solved that problem by putting so many banksters INTO the government. So, in a way, the banksters ARE the government, and vice-versa. It's still another win-win outcome!
Dontcha SEE?
Note the line: "The Treasury will get ... nonvoting stock."
In other words, the government, us, will have no control over how the banksters spend our money.
Also note the line from the AP article on this: "The advantage to the taxpayer is that if the rescue plan works, then the shares can be sold for more than the government initially paid..."
Of course, if it doesn't work (and why should it if it introduces no reforms in the system?), then we're left holding the bag.
Over the past third of a century, the rich have taken all the profits created in the US economy. Their justification was that they were "investing" the money. In reality, they were gambling with it -- in the stock market, derivatives, and all kinds of financial games. Now they're reaching the bottom of the barrel. With this "bailout", they're taking even the dregs, leaving the US economy with nothing but an Everest of debt.
The government is being run by free market fundamentalists. They're trying to convince you what happened was the fault of government, or the 1960s hippies. If you believe that victory in Iraq and Afghanistan is just around the corner and that the world was created in 7 days, 8,000 years ago, then you're gunna love this plan.
When Palin becomes president, and the stock market crashes, it will be "the work of the devil," and we will all be required to pay certified preachers to exorcise our demons and protect us from witches.
Ah, kivals, I always love your posts.
Any which way but real.
What's needed at minimum is: strictly and democratically regulated banks, capital markets, hedge funds, & other financial institutions.
This bailout charade fails to create even one fig of progressive reform.
Instead, it socializes with scant re-regulation the private losses of corrupt institutions and individuals, while -- so far --doing nothing to assist homeowners who've beccome victims of predatory lenders.
If there was a viable/visible/honest/progressive political party in the US, interpreting this blackmail payoff by the average citizen - to the average citizen- the 'rescue deal' would look far different.
Of course, there'd also have to be an honest, decentralized MSM to report it all.
If If If.
This is why I keep working to build a vigorous Green Party in my state.
Deduct from your taxes all interest payments made to banks and businesses that accept our tax monies and to all state owned banks and corporations. Double taxation no one should pay.
Withdraw all savings from all banks and deposit them into your local non-profit community credit union. That is real ownership. Do not use debt to purchase anything.
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http://www.pbs.org/newshour/bb/politics/july-dec08/nader_10-14.html
Ralph Nader PBS Interview:
If you make the speculators pay for their own bailout, then there's a relief throughout America that there's some fairness coming out of Washington.
A 0.1 percent tax on security derivative transactions in one year -- it's going to be $500 trillion of transactions in one year -- is $500 billion. So that alone would make a sense of equity. And you wouldn't put it on the backs of the taxpayer.
England has that kind of tax, by the way, for years. FDR had it. We helped finance the Civil War with it. But after World War II, it was scrapped.
So people go into a store in all your areas where your show shows, and they buy necessities of life, and they pay 6 percent or 7 percent sales tax. Tomorrow, someone in Wall Street can buy a billion dollars of Exxon derivatives, pay no sales tax. That's where the fairness has to go.
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