The bailout of Wall Street’s largest players by the federal government is another example of the Bush administration pursuing a corporate agenda at the expense of average Americans, a prominent author argued on Friday.
In a Friday night interview on HBO's Real Time with Bill Maher, Naomi Klein said President Bush’s $700 billion proposal to rescue the financial sector stems from a profiteering streak that has dominated the last eight years.
"The disaster is far from over," Klein said. "The disaster was on Wall Street and they have moved the disaster to Main Street."
This cannot continue without bankrupting the US.
Monday, September 22, 2008
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It is so difficult today to get anyone to talk straight about the economy without turning it into a partisan witch hunt. Just another example here. The sub-prime loans crisis began way back in the 90s so the notion this is a Bush driven issue is nonsense. These sorts of political tactics by NoBama and even McCain are laughable. These are some of the same folks who attempts to spin the Clinton economic losses into a surplus.
The R&D congress has perpetuated this irresponsible practice for the last 15 plus years and the financial institutions played loose and free with their money knowing that their tactics were risky. Anyone who spoke against the practice was designated as being unsympathetic with the poor. McCain warned of the impeding doom in 2005 only to be ignored by Frank & Dodd. It seems McCain was right again and we only learn our lessons after disaster strikes. This bailout is indeed a terrible idea unless the government insists on repayment of this bailout. I wouldn’t look for any solid advice from anyone on Maher. In reality, nobody really has a good answer so maybe patience and allowing the markets to work is the best answer.
Glad to hear you are well CSM.
I agree with you somewhat on this one mousey. That said, the deregulation started with Reagan and the neocons and the Dems did nothing to fight it. Bill Clinton's record here is not good either.
I'm hoping that the investigations started by Nancy Pelosi will find that it is the deregulation that has caused much of this rubbish to occur. IMHO, this is an example where MORE government is GOOD! (Bawdy?)
Isn't it true that the bailout is actually by the taxpayers, in the end?
Well, it sure seems like it will be. I think Congress is still debating things even as I type this.
And what about the proposed provision giving the Treasury Sec unchecked power? Here is the wording from the proposed legislation:
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
That better not be passed with that wording.
In my late twenties and early thirties I started becoming interested in finance(I even came this close to becoming a stock broker)and taught myself about the subject by reading Barron's religously every week for about ten years(though I haven't read it for the last eight). Even then, Barron's was very skeptical of the hybrid derivatives which were starting to come into vogue. CDO's, collaterized debt obligations, were the investment of the day. What would happen would be real estate lenders would fund a mortgage and then Fannie Mae and Freddie Mac would then buy that loan(giving the real estate lender more opportunity to sell more loans), package the loan with a slew of other loans of varying quality and then securitize this as a single entity known as a CDO. Since there were differing qualities of loans in the securitized CDOs, based on credit risk, once they were sold to investors, these investors would then resell the differing underlying loans risks, called tranches, which was based on credit risk of the original borrower. Some investors would buy the best of the loans but of course would get a lower interest rate. Others would buy the riskiest and again got the higher interest rates. Sometimes big investment banks would buy the CDOs whole, with the ticking time bombs included, but didn't worry because real estate always goes up, right?
This is what was going on until the recent mess. Who was at fault? Just about everybody involved, borrowers, lenders, brokers, appraisers, investors, bankers, Freddie and Fannie, Greenspan and of course the fucking Congress(BOTH PARTIES!). I am not surprised that the bubble burst, they always do. Anybody who is looking around with a questioning look is either extremely stupid or lying. Democrats blame the Republicans for a lack of regulation(deregulation), but why weren't they screaming at the top of their lungs of the coming disaster? The answer, their favored constituency, the lower middle classes, were finally getting into the American Dream, a house.
Why weren't the Republicans screaming at the top of their lungs of the impending disaster? The answer, their constituency, upper middle class and the rich, was making a ton of money.
So now we are to trust this behemoth of a federal government, who had all the regulations they needed to keep this from happening, to guide us out of the mess they created. I do not see the logic in this.
I remember when Bear Stearns was getting their bailout, I mentioned then about the moral hazard with the bailout. Most of you disagreed and agreed with Paulsen, Bear Stearns was too ingrained in our economy. Maybe that was true, maybe not, but now the crows are coming home to roost. We are all losers now.
When you couple this mess with my general distrust of a huge, powerful, money hungry, power hungry and immoral federal government, I cannot but think this is one more step in the power consolidation going on in Washington.
Now I will leave with a question. Why would any self respecting Progressive want a strong central government, when global corporations would have a much tougher time running roughshod over the citizenry if they were facing 50 strong state governments of varying expertise and resources. This is the main reason we have the "lobby" situation we have now. And don't think the lobbyists aren't in Washington right now looking for as much of the largesse our fuckers in charge are about to dish out. You say $700billion and their ears prick up, for sure.
Even if legislation that contributed to this current financial extortion began prior to the present administration, it took a unilaterally fixated mentality to abuse it in this fashion. At no time in history has an administration attempt to convert public property to personal profit so blatantly or in such an unrestrained degree.
If my memory serves me, shortly after the twin towers collapsed, early in the Bush administration, it became necessary to pull 5 billion (5,000,000,000) out of Social Security reserves in order to bail-out the airlines and insurance companies which were so seriously injured by these attacks. That was followed by a 6 billion dollar gift to big oil, ostensibly to cover the cost of research aimed at freeing America from oil dependency. Following year after year of no-bid-contracts in support of an occupation of questionable legality, March 16, 2008 marked the an announcement that The Federal Reserve would guarantee $29 billion of Bear Stearns' assets supporting it’s government-sponsored sale to JPMorgan Chase & Co. A rapidly accelerating progression of bail-out followed with the 8.9 billion July 11th, Federal seizure of IndyMac Bank's assets, the Sept. 7th, 200 billion Treasury Department seizure of Fannie Mae and Freddie Mac, the 85 billion emergency loan to rescue AIG, and now the demand that the people of America surrender 700 billion (700,000,000,000) to buy bad mortgages and other toxic forms of debt.
That amounts to a minimum of 948.9 billion in gifts to big business. At this point, I wonder if we wouldn’t be better of if we didn’t stop worrying about what the market is doing and begin worrying about where we are getting our market advice.
P.S. It’s a serious error to regard the Federal Reserve Bank as a government agency. Like the stock market it looks to other agents for leadership.
I was up a 5:30 am, Monday morning. Because of this, my TV was on when the New York Stock Market went through it’s opening ritual. I took a quick glimpse to observe a Saudi prince present on the podium for the ceremony. Does that ring any bells?
Welcome back derF.
Which leads me to my main point, Why wasn't anyone in Congress screaming at the top of their lungs, at anytime, the risks being taken and the potential catastrophe? Our saving grace will be the countries who have made out in the rising commodity markets, but it will be at their price(interest rates) which is confirmed by your Saudi prince sighting. It is still in China's and Saudia Arabia's best interest to invest their surplus funds here, because we are the only economy big enough to handle such amounts, but this situation doesn't have to last forever.
It is my contention that America’s greatest treasure, throughout it’s history, has been it’s constitution, most particularly the individual human rights inscribed within it. These are characteristics shared wit no other nation state. Neither China nor Saudi Arabia can claim such wealth. As long as this foundational wealth was preserved and maintain, portable property flooded towards the United States. IMHO the downward financial trend will not correct itself until the American people reclaim THIS TREASURE. To do so, we cannot allow the next administration be hamstrung by an end-of-term hue-and-cry issued by disreputable actors.
Senate Majority Leader Harry Reid called out President Bush Wednesday over what the Nevada Democrat is characterizing as a lack of leadership in steering the proposed $700 billion government bailout of financial companies through Congress. “President Bush has been absent from what may well be the most important debate on economic policy in a generation,” Reid said during a speech on the Senate floor.
Good point Senator!
My question is why this debate didn't happen one, two, three, ten years ago.
I feel fairly certain I saw Bush addressing the nation on this issue. Where was Harry?
Great question Bawdyscot. Our politicians never act until the horse has left the barn but are quick to deal with the Rush Limbaughs of the world. That is why they are under 10 % in the approval rating.
Fuckface, err, I mean Bush, addressed the nation, finally, but well after Reid called for some action from the procrastinator in chief.
And congress is complicit in allowing deregulation ever since that asshole Reagan got elected back in 1980.
And that was a Democratic Congress and had been for a long time.
Deregulation does not mean any regulation. We have plenty of regulation and then some. That's not the problem. The problem is that it is ignored but some will not be happy until the government rules every facet of our lives.
Quite comical but I felt it might be coming. Reagan is getting blamed for the financial crisis. During the Reagan years, it was still very difficult to get a home because the financial institutions were still cautious. No, there is nothing to that allegation.
Rather than just attack baselessly, anyone remember the “Community Reinvestment Act” which forced banks to lend to high risk borrowers, mostly in minority areas? Not Reagan but all the way back to Carter. The old standards of banking caution were abandoned to begin providing loans to the poor. Banks were forced to take high risk and race was also thrown into the mix.
This was all done in the name of diversity. Banks began making loans that they previously would not have. They even opened locations in the poorer neighborhoods to lift the Clinton CRA ratings in the 90s. The big kicker is when Congress allowed Fannie and Freddie in 1994 to finance all of it by buying these loans from the banks and then redistribute the worthless paper on the open market.
Reagan is the standard-bearer for deregulation. He made it a central tenet of his administration. Going all the way back to his first inauguration where he stated that government is the problem.
Well, government done right is NOT the problem. And I blame all who force fed deregulation down our throats.
And mouse, providing loans to the poor is NOT the problem here either. It is big corporations with onerous loans being predators on stupid fucks who cannot afford a house.
Why is owning a house such an important thing that EVERYONE should be encouraged to do so? Yes, we need programs that reasonably, fairly, and without being usurious, allow those of lesser means to own property. But the tax code should NOT be jiggered in favor of providing a write off to home owners. What the hell is wrong with living in an apartment or a townhouse or a single family house that you rent? Same question about marriage? Why is our government favoring married folks over single folks? This is all bullshit that needs to be stopped.
I think a lot of it gets back to "The American Dream", the "Nuclear Family" (Father, Mother, 2.5 Kids), and how the economy was just after WWII. Many see that time as the ideal of how America is meant to be. So the laws and regulations and tax codes are tweaked to make it seemingly easier.
Just about the ultimate in this is the ABC show where they find some unfortunate and heroically struggling family and build them a huge new house. Not mentioned in the euphoria of the show is whether the folks can afford the higher taxes on the newly raised property value, or the upkeep on the larger place, or the insurance.
There are advantages to renting.
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