US economic meltdown -The Bailout : The mother of all Government scams
The US House of Representatives on Friday passed a modified version of the $700 billion Wall Street bailout bill which it had rejected on Monday. What changed their minds? In one word: fear, says New York Times business columnist Joe Nocera.
Without holding any meaningful hearings or public discussions and listening only to those most responsible for the economic disaster, Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson, Congress abdicated its responsibility to the American people Individuals working for Wall Street finance, insurance and real estate companies and the companies’ political action committees have contributed more than $47 million to the campaigns of Senator Obama (three of top five sources) and Senator McCain (top five sources), both of whom voted for the bailout. More to the point, Wall Street has contributed more than $1.1 billion dollars to congressional candidates since 2002. Nine of the top ten House recipients of Wall Street “largesse”, who each received an average of $1.5 million, are on the financial oversight and taxation committees.
Locking out most members from all discussions, the congressional "leadership" emerged from their back rooms with legislation that grants Secretary Paulson the ability to spend at least $700 billion to "take such actions as [he] deems necessary" ... " to promote financial market stability. Entrusting tremendous political and financial power (and a ton of borrowed money that taxpayers will have to repay with interest) into Paulson’s sole discretion, members of Congress must have been aware that, prior to his cabinet appointment in 2006, Paulson worked for 32 years at Goldman Sacks, one of the Wall Street firms that stands to benefit greatly from his "actions."
Paulson, who cashed out his Goldman stock valued at $575 million to become the Secretary of Treasury (without having to pay any taxes on the sale), earned more than $53 million in pocket change during just his last two years at Goldman Sacks for innovations such as a new line of "Mortgage Backed Securities." Gambling more than a trillion dollars on risky subprime second mortgages, Paulson cleverly converted them into AAA-rated "secure" investments by purchasing guarantees from the American International Group.
“The $700 billion bailout for Wall Street is driven by fear not fact. This is too much money in too short a time going to too few people while too many questions remain unanswered. Why aren’t we questioning the underlying premise of the need for a bailout with taxpayers’ money?” Kucinich asked from the House floor Monday. “Why have we not considered any alternatives other than to give $700 billion to Wall Street? Why aren’t we asking Wall Street to clean up its own mess? Why aren’t we passing new laws to stop the speculation, which triggered this?aren’t we putting up new regulatory structures to protect investors? How do we even value the $700 billion in toxic assets?”
4 comments:
the way this bailout appears to me is, the government will bailout banks that helped overprice the real estate market. the house the two institutions sold at,for example $200,000 is now worth less.
for example this house is now worth $100,000. the bank is realizing losses. as the government steps in to bailout these banks from its losses and assumes the debt, the question is what will happen next.
what should happen is that if the government can bailout the banking system and pay a $100,000 of that houses loan, then the bank should forgive the homeowner the same amout off his mortgage loan. which would put more money in the hands of the people.
what is going to happen is that the banking system will get its debts paid off, the homeowner will continue to pay off a $200,000 dollar loan, the government will tax the people for bailing the banks out of there debt and we the people will suffer having just been swindled out of $7,000,000,000
Fact is stranger than fiction, and this biopic of America is too twisted and surreal NOT to be full of truthness. Is this just soime kind of social-cultural experiment, the past 200+ years of freedom and democracy in the United States. The downfall goes back before the political coup staged by the PNAC creeps in 2000 that put Junior in the White House. Surely at least half of the US populace is starved of reasoning brain cells, this starvation fed by a steady diet of "15 minutes of fame" dreaming American Idol style hedonism. No Child's Behind Left Unscrewed has worked out real well as an education policy too, hasn't it? Fear is the operative term here as well, that's for sure.
Anyway, jazz and film noir wouldn't be around if it weren't for certain aspects of this sitcom, so that's a good thing. But cynicsm is a two-edged sword that cuts in many directions.
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Later generations are the ones that are gonna hafta be paying for this bailout, but they will not be the children of the rich elites, rather, the dwindling middle class kids will be footing the bill.
And that sure is a lot of money for Paulson to play with.
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Until we realize that money is just one of the things that connects us all, we will continue to sink deeper & deeper into the abyss of financial slumber. Everyone is up in arms about the US "bailout plan", and with good reason. We are not working together to try to correct this crisis, or any other crises that come up. We operate on the basis of interdependency, whether we realize it or not.
We cannot rectify this situation by following our historical efforts to solve problems. What's the definition of insanity? "Doing the same thing over & over and expecting a different result." We have to start thinking of a new way to overcome our crises. Michael Laitman talks about this in greater detail on his website.
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