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Economic Chaos Increases After Congress Passes Bailout
Will Sens. Obama and McCain Claim a Piece of this Rotten Fish They Helped Produce?
Congress passed the $700 billion Wall Street bailout on Friday, supported by both Senators John McCain and Barack Obama. The U.S. stock market promptly dropped. Over the weekend the financial crisis threatened European banks, and stock prices across Asia and Europe tanked.
So much for the argument that the bailout was necessary to calm the markets.
Yet, while politicians were putting the taxpayers ever more at risk, we have seen the possibilities of a market work-out. For instance, Warren Buffet invested $8 billion in investment bank Goldman Sachs and manufacturer General Electric. He imposed tough terms, but he has solidified the financial futures of those two firms.
Both Goldman and Morgan Stanley won permission to become bank holding companies, allowing them to accept deposits along with increased regulatory oversight. Last month, Bank of America spent $50 billion to acquire Merrill Lynch, which had unloaded its bad mortgage backed securities in the summer, well before Congress stepped in.
Even more dramatically, a bidding war has broken out between Citigroup, which had been tapped by the Federal Reserve to save troubled Wachovia bank, and Wells Fargo, which jumped in with an unexpected $15 billion purchase offer. The two are now battling in court over the right to buy a bank seen as financial road kill only last week.
There is much more to be done to clean up the economic mess flowing from the housing market crash, but the ill-considered federal bailout is likely to slow the process.
Companies now will run to the Treasury Department before taking tough steps to clean up their own balance sheets. After the automakers joined insurer AIG and investment bank Bear Stearns in winning their own federal bailouts, what company will not expect a handout from the taxpayer? Who will bail out Uncle Sam when all of his bills--well over $100 trillion in unfunded liabilities--come due?
Far from bringing change to Washington, the election of either Sen. Obama or McCain would mean more of the same: More political interference in the economy; more special interests running government economic policy; more taxpayer bailouts; more politics as usual.
Only a vote for Bob Barr and the Libertarian Party would offer genuine change for the future.
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"Even more dramatically, a bidding war has broken out between Citigroup, which had been tapped by the Federal Reserve to save troubled Wachovia bank, and Wells Fargo, which jumped in with an unexpected $15 billion purchase offer. The two are now battling in court over the right to buy a bank seen as financial road kill only last week."
However, that followed this:
http://economix.blogs.nytimes.com/2008/10/04/will-paulsons-two-plans-unplug-the-liquidity-trap/
But Mr. Paulson’s fiscal-stimulus work didn’t end with the bailout bill.
With hardly anyone noticing, on Wednesday he pushed through very technical and obscure changes to tax regulations that provide a “tax subsidy” for acquirers of troubled banks. Just as automakers stimulate car sales through rebate checks, the Treasury is providing a form of tax rebate to acquirers of troubled banks. Everyone can thank Hank Paulson and his stealth tax-driven fiscal stimulus for the astonishing news that Wachovia was being acquired by Wells Fargo and not Citigroup. It was Mr. Paulson’s tax subsidy to Wells Fargo that provided the fiscal grease to make this deal happen. Pundits who point to the deal and proclaim that the “free markets work without government help” don’t understand the motivating effect of several billion dollars of tax benefits to Wells Fargo.
Any vote for capitalistic ideals is a vote to continue to have individual freedom.
It is more than just the MONEY… It is about the strings attached. I feel that this is a defining turning point towards SOCIALISM. The hidden “strings,” in this massive the Emergency Economic Stabilization Act [like continuing to empower ACORN] will be dangling down from the “Puppet Masters” to me, the average voter/ tax payer. The voters will react at the ballot box and vote out representatives that do not reflect the principles that made America great.
Any vote for socialist representation is a wasted vote. Socialism is based on “Utilitarian ethics” which allows deception to “serve the general interest,” including restricting individual’s freedom. Act utilitarianism applies the utility principle to acts. An act is “right” if no other act would yield a higher utility. Problems with utilitarianism start with subordinating the individual’s right to happiness, to the “group” [greatest number of people]. In New Orleans after hurricane Katrina it would have been ethical [according to utilitarianism] to sacrifice an individual [to eat] for the happiness of those in the supper dome. The greater number of people’s happiness is superior to one person’s happiness, per Utilitarian ethics. In this case, the act of catabolism is good [per utilitarianism ethics].
Vote for Senators John McCain or Barrack Obama if you want to become the United Socialist Republic of America.
Americans need to wake up! Congress has been asleep in session. On Nov. 4th we need to give these corrupted politicians their pink slip. I don't know about you people, but I don't trust Congress nor the candidates from both parties. I rather give my vote to an Independent: Nader.
http://tenurecorrupts.com/
Tip of the iceberg. For a better idea about what's under the surface check out: http://www.youtube.com/watch?v=_XgkeTanCGI
Your vote for Libertarian Presidential candidate Bob Barr is guaranteed to improve America's future! If he gets at least 5% of the popular vote in this year's election, his party's Presidential campaign in 2012 can receive millions of dollars in voluntary taxpayer funds. It will also automatically qualify to be on state ballots, thereby avoiding long and costly signature petition drives. So do the 'most patriotic good' with your vote, help America build a 3rd major political party! Vote for Bob Barr on November 4th!!!
Free markets are key, but I'm thoroughly convinced that government regulation is needed. If I said that regulation to assure that the integrity of all financial transactions - under heavy penalty of fraud for any dishonesty - is critical, would you agree? It would have headed off the mortgage crises by forcing an honest valuation of CDO's and disclosure of how the mortgagees were not qualified for their loans.
Bob, why are you doing this? You know damned well you don't have a rats chance in hell of being elected, yet you ask people to vote for you as a protest about the system. Nader did that in '00 and look what that got us. 96,000 Florida votes wasted that helped lead us to this criminal administrations ability to screw, not only us, but the rest of the world to boot.
Pragmatically speaking, if you don't see at least a philisophical difference between these two parties, generally, and Obama and McCain, specifically, you're not as smart as you think you are.
What about you going ahead and talk to both these campaigns with your ideas for the future of this country, and see which of them is more likely to be a welcoming home to your ideas? My bet is on Obama. Lobby for a position in his administration that would give you the ability to make a difference in our future. You may as well! There ain't enough time to grow a viable third party, and you know that.
Hurry up, Bob. The clock is ticking. Literally.
Obama lobbied for this bailout. He's bought and paid for by Wall Street. He is the lesser of two evils. But that is still evil. He will be a one-term president and will preside over The Great Depression II
Yeah! A great depression built by questionable actions on Wall St. and exacerbated, grossly, by the Neo-CONS in the administration. I agree that it may be a choice of the "lesser of two evils" but there is a large gap, philosophically, between the two.
Bob Barr may have some good ideas, but he can't be elected. McCain, you'll remember, postponed his campaign to broker a remedy; NOT. So who are we left with? You got it; Obama. I have my problems with him too, but if anything is to be accomplished we have to have agreeing parties; House, Senate, and The Executive, in order to get anything done. It has got to be looked at pragmatically, not politically. After that it is up to bird dog their every move.
In the end, and that's not likely to be anytime soon, everyone will discover that it is fractional banking that is the problem. We need a different monetary system other than the central bank and fractional banking. Our current monetary system is utterly dependent on unsustainable never ending economic growth or disaster will unfold very rapidly. All of our currency is created on the basis of debt. Every increasing debt. All of us are utterly in debt to bankers. Including our government. How can that be? The bankers don't produce anything yet they own everything. Why? The answer is fractional banking and there isn't really any need for it. Banking should be a service provided by the government for the benefit of the citizens. If interest is charged it should flow to the benefit of the citizens. To many this may sound like socialism, and that is exactly how the bankers will fight against it, but is it socialism for the government to build highways and let the citizens drive on them essentially for free? Of course it isn't. It is written in no stone that banking must be a commercial enterprise in order to have capitalism. For those who may scoff at this idea I suggest that you google "Fractional Banking". As you dig deeper and deeper into this issue you will find that many many wise and learned statesmen and men of finance have, upon perceiving the ultimate affect of fractional banking - railed against it.
BNW, how about we back that up one more step and get rid of the Fed, all together?
If not for the leverage of fractional banking a contraction such as the one we are currently experiencing would have minimal affect and the government could easily control it by simply spending more money into the economy. That is not at all what the government is now doing. In our current system the money the government is using to try to prop up liquidity has to be borrowed, at interest, from bankers. More debt.
The so called bail out was only THEFT, legitimized and supported by congress.
SCREW WALL STREET, SCREW THE BANKS.
And screw the Democrats and Republicans. I think thats Mr. Barr's point;
.......and I agree with your statement and Mr. Barr's as well.
It's not as if the $700 billion were already spent. I would hope that Paulson and Co. are actively trying to figure out what is going on with the markets, and will also consult with other countries to try and make sure we all do kind of OK even if we go into a world wide recession. And maybe they will all take a deep breath and realize that maybe it is the system as a whole that is messed up.
Many of us lost very little in the past few weeks because we had very little to start with. We can all drive less, buy less crap and eat more potatoes and lentil soup for a while. Americans, with their average of $9,000 or however much in credit card debt and their insistence on taking out home equity loans to put granite counter tops in their cathedral ceiling kitchens are not exactly free of blame either. What cracks me up is that the right wingers who are the most outraged by the bailout have no qualms about the $700 billion we have spent on bombs and ammunition in Iraq since 2003. Somehow, that money was not stolen from the tax payers, huh?
I agree with your comments to a certain degree. Americans that took out HELOC's to make things prettier should have to fend for themselves. Furthermore, those of us that took a risk in real estate have no on to blame but ourselves. You don't play the lotto and after you lose ask for your money back. Investing is gambling. The people I feel sorry for are the retired folk who have been depending on pensions for their retirement. The put in their time and did it as we are all told work hard and save and you'll be ok. Not everyone suffering is at fault.
I fully agree with you, and I absolutely never meant that all were to blame. And although I have no credit card debt and have always lived within my means, I am more than willing to pitch in so that all, even those who were greedy and careless, but especially retirees who have no other income, can lead a decent life. That's the democratic ideal, right, a socially responsible market economy with safety networks built into the system to allow all to live with dignity.
New Zealand is having a General Election to choose its Government on Nov. 8 - under MMP, a proportional representation electoral system.
In addition to the two 'big' parties - centre right and centre left - there are smaller parties to the right of them and left of them, two centrist parties, a Christian Values party, a Green party and an 'indigenous native' (Maori) party all with members presently in Parliament and wielding some influence.
Unusually the centre-right party is currently polling at 52% which would be sufficient for it to govern alone, but it only has to lose a little of that support for neither party to have a majority, in which case the Government would to the party that can put together a coalition.
This has been the case since 1996, when government has always been by a minority party in coalition with another, and having to keep other smaller parties sweet just in case, in the future, it might need them. As a result Government has been far more by consensus than under a two-party system, with the views of minorities having to be catered for and the rampant abuses of power that arise in a two-party, win-or-lose system to a great extent moderated.
The Founding Fathers of the US had no concept of anything other than a two-party system but much of the rest of the democratic world has moved on. It's about time the US tried to catch up.
Idealy this would be implemented here but no chance of the two parties ever letting this happen.
There is no democracy and I feel sorry for people who still think there is
Amen. But I fear its to late. Sadly, our constitution, the foundation of our (former) republic, is now a dead letter.
Just as Ron Paul accurately predicted.
Sorry, but I'm not a Libertarian. You have another choice you want to offer?
You don't have to be a libertarian to appreciate the points Bob Barr makes. Ralph Nader last week was on Real Time with Bill Maher, and he agreed that the bailout was corporate garbage. I am by no means telling you to vote for Bob Barr, although I think that is a smart choice, I want people to vote their beliefs. Don't let them steal your vote with rhetoric and lies. Make a choice that you are comfortable with.
Hey jsalomon - I do appreciate Bob Barr's points. I appreciate Ralph Nader's points and I also appreciate Ron Paul tremendously. My favorite is Kucinich. But, after the last two elections, I feel that Obama needs to win by a landslide. None of this closeness that can allow a rogue to steal an election through false votes. That's my belief for this election.
Once a third party gets its act together (like now for the next election), I'll listen. But, I still have a difficult time with libertarianism in general. That's a choice I'm not comfortable with.
Republicans PROVED they are chronic LIARS & CHEATS who make empty accusations against others.
SMEARING IS NOT A SOLUTION TO THE BAD ECONOMY resulting from wild deregulation by Republican.
WE CAN'T AFFORD republicans any more.
Republicans PROVED they are ALLERGIC TO GOVERNING.
REPUBLICANS use gov't to PROFITEER.
Republicans FALSELY blame others for things of which THEY themselves are guilty.
No more years for Republicans:
THEY'RE TOO DAMN CORRUPT & DANGEROUS
AND WE CAN'T AFFORD THEM.
After the bailout vote by Democrats and Republicans, there is clearly a need for inclusion of other voices in regards to the economy, US foreign policy and domestic spending. Representative Barr is one of these voices, as is Representative Cynthia McKinney, and Ralph Nader. The debates REALLY need to be opened up. How can people see the real options that are out there without their inclusion in the debates and a recognition of their relevancy in the current grave situation?
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