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Reason #1 to be suspicious of the Big Big Bailout, is George Bush.
This is not a Bush bash, it's actually an analysis.
All major George Bush initiatives, and most of the minor ones too, have certain things in common.
#1: They're failures.
#2: They leave a big mess for other people to clean up. Someday.
#3: They make matters worse.
#4: Some small group of people profit from it, and they profit hugely.
#5: That profit comes from using the government to take money from ordinary people and give it to people who are already very rich and well connected.
The Bush initiatives include:
1. The decision, before 9/11, to ignore Al Qaeda and concentrate on ... who knows exactly what.
2. The invasion of Afghanistan for the purpose of capturing (or killing) Osama bin Laden & the rest of Al Qaeda.
When thinking about this war, and the others below, keep in mind that an unknown amount of the spending - but certainly more than half - goes to private contractors, the defense and the intelligence industries.
3. The invasion of Iraq.
4. The occupation of Iraq.
5. The reconstruction of Iraq.
6. The reconstruction of New Orleans.
7. The Medicare Care enrich the pharmaceutical companies bill
8. The tax cuts that would promote jobs - "good jobs" - and growth.
9. When the tax cuts failed and led to a recession, more tax cuts.
10. The theory that tax cuts would not create deficits and would pay for themselves.
11. Anti-regulation efforts. There were thousands of these. They came through setting policies, executive orders, selecting pro-industry, anti-regulation, incompetent - and sometimes corrupt - staffers.
12. Hyper-low interest rates from the Fed. This created the flood of cheap money and created the conditions under which the most profitable thing that banks could do was to borrow from the Fed, turn around, make loans as fast as possible, then rush back for more. It was the equivalent of giving free coal to power companies and not anticipating that they would then proceed to create more pollution.
13. The attempt to privatize Social Security.
If we step back a moment from the crisis, and look at it as if we're not involved, the likelihood is that saving Wall Street - in this fashion - will do exactly the same thing.
It is certain, absolutely certain, that it will make a group, a very small elite group, of very, very rich people, even richer.
A cap on executive pay, while laudable and a step in the right direction, will not, in the end make much difference. They have millions to spend on accountants, lawyers and lobbyists who will find, or create, ways around any caps.
It will make them rich by using the government to take money from ordinary people and giving it those rich people.
Will it fail?
Based on Bush's track record, the smart bet has to be yes.
Why will this one, like all the others, fail?
Because it's addressing the wrong things.
The real problem is that we have moved from a production economy to a consumption economy. Even worse, a consumption economy that supports the production economy in other countries. When we start to consume more than we produce - which we have - we must borrow. That means we're selling off or mortgaging our assets. If we were to do that to create more production which would ultimately pay for the investment, that would be alright. But we're not, we're just consuming more.
You can't borrow your way out of too much debt. At least not without a plan to create more income.
You can't consume your way out of an over-consumption problem.
If we don't address the fundamentals now, we will have to do so later. At that time, they we will be worse. Both by themselves and with the addition of the new $700 billion debt.
The ultimate problem is remaking ourselves into a production economy.
Is that possible?
Yes.
And it's probably cheaper than $700 billion or a $1 trillion bailout of the banks.
What if we took some smaller number - say a mere $500 billion - and decided to invest it in thngs like the following:
1. National health. Thereby making our older industries, burdened with health insurance commitments more competitive.
2. Protecting our coastlines. Thereby protecting ourselves against the huge losses from hurricanes like Katrina & Ike.
3. Investing in alternative energy, particularly wind and solar, and rebuilding the electrical grid to facilitate that. The work required to do that could not, for the most part, be outsourced. The jobs and the business would stay here.
4. Rebuilding our infrastructure generally. Good, efficient infrastructure makes business easier, quicker and cheaper.
5. Buying up individual problem mortgages.
6. Setting up a federal bank to make emergency loans to businesses and individuals who have come into harms way as a result of the crisis created by the Bushocrats and the Titans of Banking. When they're busy scaring us into this greatest of all heists in human history, they always talk about how it will affect "small business owners" who won't be able to make payroll, and the jobs and homes lost, to average folks on main street. If they need taking care of, let's do it directly, instead of through the rip-off artists who created the crisis.
The Big Big Bailout, as it is, will be crowning glory of Bushianity. One, gigantic theft of from real Americans to enrich the ruling class. It's a hell of trick. It's just like all the ones he's pulled before. If we fall for it, we are suckers and rubes, indeed.
24 Comments so far
Show AllOversight:
We're being raped and they're setting up bleachers.
FREE AMERICA
REVOLUTIONARY (DIRECT) DEMOCRACY
here's the plan:
www.house.gov/apps/list/press/financialsvcs_dem/ayo08c04_xml.pdf
So if the parasites are suffering because the host is dying, is the solution to transfer even more resources from the host to help the parasites recover? I guess it is if the plan is to enable the parasites to regain their strength so they can jump to another host when this one dies.
Myku by Genki
Contempt of Congress!
Both parties ignore our pain
Riches fall to friends
No re-election!
Your bailout hocks our future
Corruption's reward
Let me see.
The banks built up a huge derivatives bubble, a pyramid scheme which constantly needed more money fed into its tummy to keep it going.
The prime source of fuel was mortgages, which were used to create mortgage-backed securities, and even wilder forms of casino chips like CDOs.
The more mortgage money that came in, the larger the profits that could be made from speculating in the securities, yielding more money for new mortgages.
This machine, running on mortgages, was a machine on steroids. It drove housing prices into the stratosphere, or perhaps the upper troposphere, since prices were not that high. It just seemed that way as real disposable income dropped 8.5% since 1998, and it was income that was lagging.
However, the machine drove housing prices beyond Americans ability to afford them, so in order to keep the mortgages coming in and building the pyramid higher, the banks had to relax loan standards, so were loaning money to people for homes they could not afford, just to keep the game going.
At the same time, the same speculators were driving up oil prices and food prices, leaving less money for people to pay their mortgages. Insurance companies and cities jacked up insurance premiums and property taxes, leaving even less money. Salaries stayed flat or even declined since CPI said there was little inflation when it was twice what they said it was.
Then interest rates began rising, making ARM resets higher. The concern was over inflation that CPI said was not there, and was due to speculation on oil and food commodities.
Paulson then comes over to Goldman Sachs South (US Treasury) in 2006 from Goldman Sachs North (Wall Street). As CEO his company had placed significant bets AGAINST mortgages. Goldman sachs gave him a goodby 19 million dollar good by and wink wink bonus, on top if the 700 million he had made in previous years. A very good investment indeedy.
Interest rates continued to rise, and word starts leaking about a housing bubble.
So it was at this point prices were so high, it was time to burst the bubble. As Sir Bubbles Greenspan said, bubbles dont last forever. Problem was the machine was at 35,000 ft, out of fuel, and without a parachute.
The subprime loans collapsed first because they were the shakiest, made at the top of the market, and a number were made to illegal immigrants who could just go home (fortunately they did not have to make any down payments and could walk away). Goldman Sachs North made a pile on their bet.
Now Paulson says it was the banks that have been infected by this "housing crisis," and that in order to protect the American people, we must carry out the biggest bank bailout in history.
At the same time, he invites Goldman Sachs to join the Fed as a Bank Holding Company and now they can join the feast the 700 billion bail out will bring. I can not wait to see what kind of "welcome home hank" Bonus he gets on Wall Street next year.
Of course, the 150 billion dollars paid out on Wall Street as bonuses during the good times, despite their profits, meant they could not have saved anything for a rainy day, and need our help.
The foxes are demanding that the chickens pay for cleaning up the blood in the chicken coop.
Both Democrats and Republicans say us chickens got to pay up, or we will lose our jobs and health benfits, and maybe even social security and our retirement funds. The chickens are terrorized, and ticked off. Just for show, the money makers give us a couple of 500 point drops on the DOW to scare us some more.
Of course, us chickens are broke so we get to borrow the money from the bankers to bail themselves out, and they make interest on the loans for us to bail them out.
So I say to these traitors, F-off, and they say 700 billion, do I hear 1,400 billion. Who say crime does not pay. Just so long as we make it legal, it pays well.
Paulson and Bernanke...
hmmm do they not both hold stock/interest in these same banks /finacial entities they now want to bail-out?.. where is the conflict of interest here ?
how many of the republicans and democrats sitting around the table with george the other day, have stock / interest in the same companies?...
they are thieves , whom are bold and arrogant enough to reach into your child's future with their greed claws, to reap even more riches for the elite few, having bled dry today's peoples.
l'm for all that wind and sun energy stuff but, wouldn't it be cheaper to buy the hardware from China then allow some latinos across the border just long enough to set them up ( then round them up and deport them), once they are up and running, we could out source the customer service work to lndia. Wow we could save a bundle that we could give to the investors that they could stash offshore.
‘Apocalypstick’ Pie
Hey ya all better hanker to Hank
and hearken to the dart in the bull
The next bear is gonna be steeper
than any empire keeper can claim a bucket for
This isn’t ordinary Bush bull so get out the pail
debtor’s jail don’t chain no daisy failures
The bull’s brass balls are low hangin
like the fruit of empire ripe
and the loot or sheets of rope
won’t spread the power poke robes
who sell endulgences for rat singers
scurrying for the cover of safer lucre
as the global pig screams for a chute
and a bigger pail for all the loot.
Bail Hank bail
don’t pass on the bear
or boot on the bankie
save all the Hyles for fall
and high style for ‘pig lipstick rose’
while the background tune fades to
bye bye ‘Apocalypstick’ pie
"3. Investing in alternative energy, particularly wind and solar, and rebuilding the electrical grid to facilitate that. The work required to do that could not, for the most part, be outsourced. The jobs and the business would stay here."
Let's toss some numbers. I will attempt to be deliberately conservative, as to eliminate some of the contention that numbers usually generate.
A 1.5 MW capacity generator at a good wind site will cost about 1.5 to 2 million dollars installed (on the lower end for wind farms), and produce enough energy for about 300 to 350 typical households.
For the sake of argument, let's be conservative and figure $2 million each with land lease and maintenance and each powering 300 homes.
$600 billion buys 300,000 wind turbines installed.
300,000 turbines, each powering 300 homes will power a total of 90 million homes. About three hundred million people with 2.5 in each household equals about 120 million homes.
$600 billion could power about 75% of the homes in the US with renewable clean energy... and if Congress allocated it for that use, it could power those homes (and electric cars) for practically nothing.
This would leave $100 billion dollars to initiate a new national power distribution network.
And all the economic benefits from jobs for manufacturing, installation, servicing, management and the additional savings of dollars and environment over the cost of existing power sources and fuels would be staggering... especially when calculated over the same time period that the loss of that $700 billion to greedy corporatists would negatively impact the US. The differential is enormous. The installation of those turbines would charge our economy like no other initiative.
Okay... this is just an example. Of course that $700 billion could be spread out to several renewable technologies... but I'm just trying to help us all visualize what that chunk of change could buy.
Or we could submit to the demands of CheneyOilCo and cough up the dividend payout ransom. I mean, really... who needs clean renewable and independent energy sources... it's not as if the fuel we now depend upon is the source of all our problems... right?
Toast,
There you go. Now, since a hell of a lot of us are on the same page...Fuck these rat faced fucking Dems who don't have the creativity of a worm. What, real time candidate will use his or hers political power to do what is needed, correct and has morality, besides human mortality?
Correct answer?
None of the above. And I don't care if they be Green, rhubarb red, little boy blue, sunset purple or sunrise gold.
Reality is never defined by the moment except in physics.
Look, the "bailout" is gonna happen, and we all know it.
But when We The Taxpayers who live in reality incur new expenses, we have to take a look at our budgets and decide what to sacrifice in order to meet the new expenses. We can't just demand Visa raise our credit limits and lower our interest percentage.
Our "representatives" should be demanding the same thing. The bank robbers need another trillion? Fine:
$200 billion right off the top of the just passed Pentagon $1 trillion budget, a budget, which has been declared un-auditable and which is full of waste and graft.
Collect all hidden corporate taxes - off-shore, etc. That's another $100 billion easy. Then make all off-shore shelters illegal and close all tax loopholes, both corporate and personal.
File RICO charges against the top bank robbers and seize and sell all their assets (they may keep up to $32,000, the average taxpayer income, per year for five years.) Another $50 billion right there.
Close at least 500 military bases worldwide, and all military golf courses. Bring the troops back, then cancel all "private" Military contracts and let the troops do the work. There's another $200 billion (or more, probably,) plus, let's say, another $50 billion from the sale of these non-toxic assets.
That's $600 billion right there without a new ounce of pain for We The Taxpayer.
Let's start the "rescue" with that and see how it goes. Why is no one demanding this conservative, common sense approach? What is the rush to simply print more money? Why doesn't anyone see how happy the markets would be to see the USA acting like adults?
Truly sensible!
But it is not that nobody sees it. Some do, and are invested in it as is. Other also do, but are powerless because they are outside of it. But most do not, because they are wage slaves and simply cannot comprehend the abstraction beyond their next paycheck. They believe it is as it must be, and don't know enough to care otherwise. So thus our real enemy is pervasive ignorance.
http://www.gerryspence.com/givemeliberty.html
"Government spending is always a “tax” burden on the American people and is never equally or fairly distributed. The poor and low-middle income workers always suffer the most from the deceitful tax of inflation and borrowing."
-Congressman Ron Paul
The Creature from Jekyll Island
"From now on, depressions will be scientifically created."
-- Congressman Charles A. Lindbergh Sr. , 1913
Now there are some really good ideas in here. Especially about the bases.
jonabark
Look guys, stop it with the whine, whine, whine. The banking /investment/ deficit spending/ mortgage backed credit default swaps with a side of bull/wall street greed/ let's play with everyone's 401 K/borrow til tomorrow crisis has a simple solution and Team Bush is, as usual, up to the challenge. I don't know why somebody didn't think of this before: when the banks don't have any money to lend because they owe way, way more than they they can pay, we the people can simply lend a hand . I mean gee, if we put money into the banks then we will be able to borrow that money at a good healthy interest rate. Hey everyone is a weiner, er winner here. If you put it in then you can borrow it : it's that simple.
The D O L L A R numbers are nearly / m / e / a / n / i / n / g / l / e / s / s /, unless one uses various comparison or analogues to real life.
.
with Half a quadrillion of "_d.e.r.i.v.a.t.i.v.e_ financials" being traded in a year ( floating on top of the scum of sub-prime house loans )
_____ $ 516 _ trillion ___ which are based upon what ( smoke & mirrors ) ?
.
N.O.T.I.C.E. _ that the total of all the world's GNPs all together is _o.n.l.y_
____ $ 75 _ trillion ___ which ~ 50% related to wicked warmongering profiteering throttling humankind
.
Having obscenely high salaries and complicit corruption of the largest most illegal cartel ever
.
____ B A N K S T E R I S M __ = __ G A N G S T E R I S M ____
.
So of course the leader of this CorpoRAPE _M_A_F_I_A_ has made half a billion in salary ?
This is peanuts compared to what they've planned to still come with the SECOND FOOTFALL
.
____ $ 999.99999999998 billion ( I took out my 2 cents worth ) is only the initial EXTORTION PAYMENT to the KIDNAPERS of our ECONOMY
.
____ T _ I _ M _ E ____ A _ N _ A _ L _ O _ G _ Y _
.
____ 1 million seconds = two weeks
____ 1 billion seconds = 33 years
____ ( most people only life 2 billion or so seconds )
____ 1 trillion seconds = 33,000 year
____ ( the next ice age will have started by then )
____ 1 quadrillion seconds = 33 million years
____ ( enough time for a RE_evolution of intelligent LIFE to occur )
The last point is onerous,
if we spent 1 dollar of "derivatives" every second, that would be plenty enough time for nature to evolve cockroaches ( or ants, not bees ) into a replacement intelligent life force on the Earth.
Namaste
Namaste,
My message below is for you, someone got in before me, cannot type.
BillofRights
So good to know you're about. Albeit I am rarely on this site anymore, so well you see, of course aware they've gone full blown trapping here is sickening. I could care less, because they already know where I am so this site makes no never mind, as they say in my Mom's part of the country, it is the point, people trust them and well......
Building a new site, own Domain, taking me forever for you 5 minutes. I shut down the blogs I had before opened 1 serious, much evidence for War Crimes, and such. I will just put all links on the new one. Hope all is well and I think you know which peaceful veteran I am. Hope all is well and going great for you, peace.
BillofRights
Hey big metal man,
I'm happy to see that you're back,
watch out about stepping on those kracks.
Namaste
Derivatives should be treated like some Quarks. Here one moment, gone the next. Just make derivatives illegal, and cancel all bets. Let the Paulson principle collapse the derivatives into a black hole, much like the Pauli principle allows matter to collapse into a black hole.
Since there is no more wealth to trickle up, banksters have to go somewhere for protection.
Larry Beinhart is right, but since the rich can't get richer on his plan, won't happen. My mind keeps going back to when public education was being debated in the 19th century and Horace Greeley was asked his opinion, he said "By all means teach them to read. Then we can tell them what to think". It's worked so far.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
Larry,Larry,Larry...it needs to be remembered that the 700 billion dollar bailout was initiated by the democratically controlled House and Senate, and that they can pass it at any time without the support of the republicans. The republicans do not feel it is a good plan and oppose it at this time. Makes you wonder why they want both parties to be supportive of a taxpayer rescue of the overpaid, and over profitable Wall Street. I applaud the republicans for looking out for the taxpayer.
Some of these suggestions are good, but he left out controlling our immigration which affects almost everything. Economics to the enviornment. I would also add reregulation of the financial industry immediately.
But he's certainly right about falling for this sucker punch.
Well, it's not just Bush & Co. that ought not be trusted, it's also Paulson and Bernanke. This is a very sad day for us all in america. This bailout will just stall the inevitable collapse AFTER Bush is gone. I'm depressed...