This post might be a little late, but I truly feel the continuing discourse to be imperative for US to learn. In the last week I've been busier than a squirrel gathering nuts for a long winter: Signing Petitions...Photographing Anti~BAILOUT Demonstrations... Ringing "representatives"... Writing News Bulletions ...Observing the "Debates" ... and apparently starting a few of my own ...
The following is a dissertation, of sorts and is how I spent a chunk of time last Thursday. After getting as close to "hate mail" as the English can muster, from numerous dear friends overseas, I felt the need to share that not every American is an ignoramus dullock ~ clueless to the ongoing financial malestrom brewing worldwide, thanks to a minority few corporate elite in America's highest eschelons.
Enjoy, and feel free to pass along any of the information exchanged! Debate is cornerstone to the success - or failire - of any "free and open" society. At least it was. More importantly, REMEMBER THIS ON TUESDAY, NOVEMBER 4th! The implications of this Corporate welfare check are nearly uncomprehensible - the affects of which will be felt for the next seven generations.
Here goes: ******************************************************************************************************************
From: ***Blank for obvious reasons*** [mailto:firstname.lastname@example.org]
Sent: Wednesday, October 01, 2008 10:56 PM To: email@example.com; NoWallStreetBailout.firstname.lastname@example.org
Subject: Re: No Wall Street Bailout! petition
It's not a bail out, it's going to unfreeze our credit market. It's not perfect, and we certainly wish we weren't here, but my dear friends in the Senate have been working very hard to save us from certain financial crisis - the kind that would ruin all of us. If it weren't for the Republicans deregulating everything, we wouldn't be here, but since we are, we have to do something
- All my love,
From: a*******@***********.com [mailto:email@example.com]
Sent: Thursday, October 02, 2008 4:56 AM
To: ***Blank for obvious reasons***; NoWallStreetBailout.firstname.lastname@example.org
Subject: Re: No Wall Street Bailout! petition
It most certainly is a bailout. It's corporate welfare to the ninth AND disaster capitalism in Action. I'm inclined to agree with Naomi Klein when she wrote in the Huffington Post last week, "'It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same.' Further, 'What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor. A President McCain would embrace these policies willingly. A President Obama would come under huge pressure from the think tanks and the corporate media to abandon his campaign promises and embrace austerity and "free-market stimulus.""
Your dear friends in the Senate may now be working very hard on this bill, but I ask you, "Where have our "leaders" been for the last 25 years?" Up the arses of corporate American companies who finance them through campaign donations and perks, that's where. The next thing you're going to tell me is there's no such thing as corporate lobbyists, there's no need for campaign finance reform, that our income tax goes toward school funding, that we don't spend three times more money on prisoners/its system than we do on our school children/its system AND that America's a democracy, rather than a Constitutional Republic. Come on! ~
As painful it is to admit, it's not just the Republicans' deregulating "everything" (though we know they're THE kings of deregulation). In 1999, Phil Gramm (but one of many Democrat turncoats) authored a bill to remove all the regulations governing Wall Street and our banking system. The bill passed and signed by C-L-I-N-T-O-N ~ our favorite bad boy (mine, anyway). And BOTH the Democrats AND the Republicans have been happily asleep at the proverbial wheel for the last 25+ years of Reaganomics ~ coasting on cruise control and well aware of the financial shit-storm a-brewing.
There are 1.3 million homes in foreclosure right now. This is what is at the heart of this problem. So, instead of giving the money to the banks as a gift, we could, say, pay down each of these mortgages by $100,000, then force the banks to renegotiate the mortgage so the homeowner can pay on its current (real) value. To insure this help doesn't go to speculators & those who have tried to make money by flipping houses, this bailout should only be for people's primary residences. And, in return for the $100K pay-down on the existing mortgage, the government gets to share in the holding of the mortgage so it can get some of its money back. Thus, the TOTAL initial cost of fixing the mortgage crisis at its roots (instead of with the greedy lenders) is $150 billion, NOT $700 billion.
More importantly, the proposed "bailout" would permanently price out of the housing market all responsible Americans who have been patiently saving to buy a house they can actually afford. The current housing correction is necessary to remedy the historic run-up in housing prices over the past decade. By bailing out the housing market, the government will prevent housing prices from returning to affordable levels ~ thereby ensuring that renters' won't be able to buy a home & current homeowners won't be able to upgrade.
Photograph: A Golden, eyewash design - c. 2008
NYC Wall Street BAILOUT demonstration: September 25, 2008
The government bailout of the housing market is both fiscally and morally irresponsible; it's an unfair subsidy being paid to the wealthy (bankers); the greedy (mortgage brokers, flippers & yes some homeowners) & the incautious (some homeowners, again), with little-or-no benefit to those paying the bill (taxpayers). Remember, bailing out borrowers also means bailing out their lenders. Under the proposed bailouts, responsible people lose and have to give their money to gamblers, liars, and sleazy lenders. This is privatizing profits and socializing losses. It doesn't matter if one's been dutifully paying one's monthly fixed-rate mortgage. It doesn't matter if one bought a smaller house based on what one could truly afford. And it doesn't matter if one's a renter who chose not to jump into the housing mania. What Congress is proposing is essentially making it our job to pay up for others' irresponsibility. Why don't they just tax us to cover Las Vegas gamblers' losses as well? That's pretty much what they're proposing ~ this much is crystal clear.
And, last night, the Senate "lit the Christmas tree". This new bill is truly a travesty; it makes NO SUBSTANTIVE CHANGES to improve the bill. Instead, it solely provides little presents to wavering Senators' & Representatives' in the form of "tax breaks broad enough to save 20 million people an average $2,000 a year in higher taxes and narrow enough to help a makers of wooden toy bow-and-arrow sets".
Pundits & politicians are lying to us so fast & furiously, it's hard not to be affected by all the fear mongering. Admittedly, the Dow having the biggest one day drop in its history was dramatic, but its 7% drop came nowhere close to "Black Monday" in 1987 when the stock market ~ in one day ~ lost 23% of its value. In the 1980s, 3,000 banks closed, but America didn't go out of business. These institutions have always had their ups~and~downs.
No, this catastrophe happened because we let the fox have the keys to the henhouse ~ unchecked ~ for three decades too many. The credit market isn't frozen ~ that's just more Chicken Little. In fact, just yesterday, I was offered a $5,000 personal loan from one of my banks & approved for nearly ten times that in student loans (for one year). I kind of like Michael Moore's plan. Sure it's got some spazzy holes, but at least he's come up with something somewhat logical, which is more than I can say for the majority of our elected Senators or House of Representative "leaders".
It will truly be a sad day in America when our politicians vote to bail out the few from their irresponsibility to the detriment of the many who were responsible. WE THE PEOPLE deserve better.
Politico: "Many Economists Skeptical of Bailout"
Dean Baker's Blog
Paul Krugman's Blog
Robert Reich's Blog
F.Y.I. ------------------------------------------------------------------------------------------------------------------------------------------------------------- >
History of U.S. Gov't Bailouts
September 29, 2008 4:23 pm EDT
● Penn Central Railroad 1970 $3.2 BILLION
In May 1970, Penn Central Railroad, then on the verge of bankruptcy, appealed to the Federal Reserve for aid on the grounds that it provided crucial national defense transportation services. The Nixon administration and the Federal Reserve supported providing financial assistance to Penn Central, but Congress refused to adopt the measure. Penn Central declared bankruptcy on June 21, 1970, which freed the corporation from its commercial paper obligations. To counteract the devastating ripple effects to the money market, the Federal Reserve Board told commercial banks it would provide the reserves needed to allow them to meet the credit needs of their customers.
● Lockheed 1971 $1.4 BILLION
In August 1971, Congress passed the Emergency Loan Guarantee Act, which could provide funds to any major business enterprise in crisis. Lockheed was the first recipient. Its failure would have meantsignificant job loss in
In the first five months of 1974 the bank lost $63.6 million. The Federal Reserve stepped in with a loan of $1.75 billion. (What happened after the bailout?)
During the 1970s,
● Chrysler 1980 $3.9 BILLION
In 1979 Chrysler suffered a loss of $1.1 billion. That year the corporation requested aid from the government. In 1980 the Chrysler Loan Guarantee Act was passed, which provided $1.5 billion in loans to rescue Chrysler from insolvency. In addition, the government's aid was to be matched by
● Continental Illinois National Bank & Trust Co. 1984 $9.5 BILLION
The nations's eighth largest bank, Continental Illinois had suffered significant losses after purchasing $1 billion in energy loans from the failed Penn Square Bank of
● Savings & Loan 1989 $293.8 BILLION
After the widespread failure of savings and loan institutions, President George H. W. Bush signed and Congress enacted the Financial Institutions Reform Recovery and Enforcement Act in 1989. (What happened after the bailout?)
● Airline Industry 2001 $18.6 BILLION
The terrorist attacks of September 11 crippled an already financially troubled industry. To bail out the airlines, President Bush signed into law the Air Transportation Safety and Stabilization Act, which compensated airlines for the mandatory grounding of aircraft after the attacks. The act released $5 billion in compensation and an additional $10 billion in loan guarantees or other federal credit instruments. (What happened after the bailout?)
JP Morgan Chase and the federal government bailed out Bear Stearns when the financial giant neared collapse. JP Morgan purchased Bear Stearns for $236 million; the Federal Reserve provided a $30 billion credit line to ensure the sale could move forward.
The near collapse of two of the nation's largest housing finance entities was yet another symptom of the sub-prime mortgage and housing market crisis. In an effort to prevent further turmoil within the financial market, the
● A.I.G. 2008 $85 BILLION
● Auto Industry 2008 $25 BILLION
In late September 2008, Congress approved a more than $630 billion spending bill, which included a measure for $25 billion in loans to the auto industry. These low-interest loans are intended to aid the industry in its push to build more fuel-efficient, environmentally-friendly vehicles. The Detroit 3-General Motors, Ford and Chrysler-are the primary beneficiaries.
● Troubled Asset Relief Program 2008 $850+ BILLION
The Bush administration has proposed a rescue plan to ease the current crisis on Wall Street. If approved by Congress, the Treasury Department will be authorized to purchase up to $700 billion of distressed mortgage-backed securities and other assets and then resell the mortgages to investors.
Why should responsible Americans be forced to Pay for the mi$take$ of other$? A bailout is morally irresponsible because it encourages reckless and irrational behavior. Here's a short list of the many "moral hazards" a bailout enables:
A bailout will have a disproportionately negative affect on minorities and youth.
Minorities and Americans under 35 are disproportionately underrepresented amongst homeowners. While non-Hispanic Whites enjoy a 75% homeownership rate, less than 50% of Blacks and Hispanics own homes. Similarly, ONLY 42% of Americans under 35 own homes, compared to 80% for Americans 55 and older. A government bailout will perpetuate this race and generation gap by propping-up inflated house prices, thereby permanently pricing minorities and a generation of youth out of the market. And, in a Kafkaesque irony, these folks will actually have to pay to prevent themselves from buying homes (i.e., taxes).
THE DEBATE CONTINUES...
Live your values. Love your country.
And, remember: TOGETHER, We can make a DIFFERENCE!