Hey, I'm back. Driven from blog retirement by the latest sh*tty trick that the criminals in the White House are trying to pull on us. This bailout for Wall Street could be one of the worst things Bush does to us, his parting shot. It's up there with the Iraq War and the Patriot Act in terms of potential damage to our country.
I got most of the info from yesterday's
Democracy Now interview. Links to some other articles are at the bottom if you want to read more.
peace,
Jennifer
Why are we giving the richest people in America a $700 billion bail out? Not just a bailout, but a blank check to spend as they please?
A few better things we could do with $700 billion:
- Save it
- Help the 3 million+ families that have lost their home to foreclosure in the last year
- Support renewable energy development; Clean up superfund sites; Support small family farms and local food initiatives; Clean up depleted uranium in Iraq; Provide health care for all americans; Build mass transit ...
The banking, investment, finance and insurance industries, all longtime opponents of taxation, now need money from us, the hard working taxpayers, to survive. Decisions that will cripple us for decades to come are being made behind closed doors, by the wealthy, by the regulators and by those they have failed to regulate. Don't let it happen! Call Congress right now and tell them NO WAY! See link at the end of this email.
What is happening
AMY GOODMAN (from
9/22/08 Democracy Now)
"It’s being described as the largest government intervention in private markets since the Great Depression. The Bush administration has asked Congress to swiftly approve a massive $700 billion package to rescue the crippled financial institutions on Wall Street. Some analysts say the final cost to taxpayers could top one trillion dollars. Over the weekend, the size of the proposed bailout grew as the Bush administration said foreign banks, including Barclays and UBS, should be eligible for the bailout. The bailout plan was drawn up by Treasury Secretary Henry Paulson and would set up a fund that uses taxpayer money to buy out the bad debt on Wall Street. The plan would also give nearly unlimited powers to the Treasury Secretary. Meanwhile, the last two major investment banks—Goldman Sachs and Morgan Stanley—have changed their status from investment banks to bank holding companies. This change, approved by the Federal Reserve Sunday, allows them to create commercial banks and also gives them access to the Fed’s emergency loans."
JUAN GONZALEZ (same transcript)
"The amazing irony now is, as we read in some of the papers today, that the very firms that were involved in creating this crisis are now lining up in Washington to be able to become managers, in case the federal government buys up this debt, and then it needs to manage how it will get rid of the debt, so that the very firms are now lining up to become the money managers of the distressed debt that the government buys."
How did it happen
DEAN BAKER (from the same transcript, Baker is director of the Washington, D.C.-based Center for Economic and Policy Research)
"And let me just make one point that everyone should be very, very clear on. This was not an accident, in the sense that this is like a hurricane. This was a totally predictable event. So when President Bush or Henry Paulson say, you know, we have to come to the rescue, it is because of their incompetence, because people who understood the economy—and putting myself among those, but there are others—we were warning about this a long, long time ago. This was a totally predictable event that brought us here....
"The basic story was, we had a housing bubble, which, again, these people are supposed to be smart. They’re paid tens of millions of dollars. They should have recognized the housing bubble. They should have recognized that house prices would fall, as they have been. And what that meant was, you made a loan on a house for $250,000, $300,000, $400,000, that house price was likely to fall. So if you did that with zero down, as many of them did, plus having mortgages, you know, the predatory mortgages, the subprime mortgages that have got them in particular trouble, these were guaranteed to go bad in many cases...
"They acted as though house prices would just keep going up forever, and they could just keep, you know, going along these lines. They leveraged themselves to the hilt. The investment banks, like Lehman and Bear Stearns, leveraged themselves to a ratio of thirty-to-one. In other words, if they had $10 billion in capital, they had loans on the order of $300 billion. I mean, this was just asking for disaster...Think of what we do to welfare people, when they—you know, everything they have to go through to get, you know, a $500-a-month check, and these people want billions, no questions asked. Unbelievable."
ROBERT SCHEER (from same transcript, Scheer is an award-winning journalist)
"Yeah, well, the point is, when Bush and McCain and Paulson, who was head of Goldman Sachs before he was head of the Treasury, say they don’t know how this happened, they designed this system. We had a regulatory regime in place ever since the Great Depression to prevent this kind of meltdown, and that said that stockbrokers, insurance companies, banks, investment banks, commercial banks, could not merge. And in 1999, they passed legislation, the Gramm-Leach-Bliley Act. Gramm is the guy who McCain supported for president in ’96. He was co-chair of his campaign until he complained about the whiners out there, meaning the public. And that legislation is what caused this. It allowed the swaps and everything else."
What should happen now
ROBERT SCHEER (same transcript)
"And now, you know, it seems to me, in terms of the bailout, why don’t they do what Hillary Clinton said during the primaries: just put a freeze on foreclosures? Start out with helping the homeowners and say, “OK, we’re not going to foreclose your house for the next year. We’re going to force the banks to work out reasonable payments. We’ll try to help you hold on to it.” That would have stopped the bleeding here much more effectively than throwing $700 billion at these bandits...
"This is our money. Why isn’t this money used to help people who are going to lose their houses? You miss two, three payments, and they’re going to foreclose on you; then they say, “Well, we hope the banks will work out new agreements.” Nonsense! Do a freeze on foreclosures. Stop the bleeding. Have a year to let it settle, and force the banks to come to agreements...
"Well, this is a Ponzi scheme of their creation, and they thought they would bail before it hit the fan. That’s what they thought. They’d be gone, and someone else would be blamed. They’d have their golden parachutes. I don’t know why we’re not considering criminal charges against these people. They have done more to hurt this nation than bin Laden could ever dream of. "
RALPH NADER
Ralph Nader has come up with 10 market reforms that he says need to be implemented immediately along with any bailout. These reforms are:
1. No bailouts without conditions and reciprocity in the form of stock warrants.
2. No more lobbying for any company that is bailed out.
3. No golden parachutes or get-out-of-jail-free cards for guilty executives.
4. No bailouts without public hearings.
5. Reduce the moral hazard in U.S. mortgage markets by introducing covered bonds for the majority of mortgage products, as is done in Western Europe. That gives institutions that finance mortgages an incentive to be prudent, because they cannot just unload them and wipe their hands clean of the liability, but are instead on the hook if the homeowner defaults.
6. Maintain neighborhood stability and housing security by passing a law with a sunset clause allowing below-median-value homeowners facing foreclosure the right to “rent to own” their homes at fair market value rates.
7. Avoid future housing bubbles by removing implicit government guarantees for new mortgages that exceed thresholds of greater than 15 to 20 times the annual fair market rent value of the home.
8. Make the Federal Reserve a Cabinet position, so it is accountable to Congress, as well as make sure all Federal Reserve Bank presidents are appointed by the president and answerable to Congress.
9. Reduce conflicts of interest by taking away power for auditor and rating agency selection from companies and placing it in the hands of the SEC to be administered on random assignment.
10. Implement a securities speculation tax, starting with derivatives, to deter casino-style capitalism.
What can we do
Alright folks, this week could very well determine the outcome of the election, and quite possibly whether Obama will have any financial leeway to enact his policies next year. George W. Bush is trying to push this stinker through immediately, ala the Patriot Act and the Iraq War Resolution.
Now is the time to take action. Call the Congressional switchboard: 202-224-3121
We all know this bailout scheme is a boondoggle for the Wall Street fat cats. It's armed robbery, a scam, a plan by and for the Phil Gramms of the world. It takes $5000 from every taxpayer in America -- that means YOU -- and gives it to reckless bankers on Wall Street. And if Democrats cave on this blank check, you just know that Republicans will use it against them for the next two months.
Call Congress and tell them NO to this blank check bailout. There is no rush to give away our $700 billion. Tell them to stand strong and take their time. And of course, be polite.
Wondering who your congresspeople are? Look here for the
House; here for
Senate
More info
