Gut Check Time: Will Congress Stand up to Wall Street?
It's gut check time.
The attempt by Treasury Secretary Paulson to put a gun to the head of Congress and terrify them into forking over a $700 billion blank check to the Bush administration in 48 hours has failed. Now what?
Most Americans would just as soon the Masters of the Universe were allowed to sink in their own folly. They had the party; let them clean up the mess. But, looking at sinking housing values and shaken retirement accounts, most Americans know something has to get done.
Banks and investment houses carry weapons of financial mass destruction. Last week, they looked into the abyss. If nothing is done, the chances for a deep and long depression are very great. So stocks skied around the world when Paulson announced his support for a massive bailout of Wall Street. And stocks and the dollar plummeted, and oil and gold soared when it became clear on Monday that the Congress wouldn't simply salute and go along. Doing nothing is not an option.
Leaders from unions, consumer and citizen groups have weighed in, demanding strict conditions on any bailout. On Monday, Sen. Chris Dodd put forth a draft bill that called for an independent board to run the bailout, required that taxpayers get partial ownership in any firm bailed out, and mandated steps to forestall foreclosures and work out mortgages, helping to keep people in their homes. House Speaker Nancy Pelosi demands a kickstart for the real economy - extension of unemployment benefits, aid to states and localities, investment in green jobs and basic infrastructure. (But at only $50 billion, a relative pittance for the real economy compared to the sums demanded to rescue Wall Street). Rep. Barney Frank insists on limits on the compensation of executives of any firm that gets bailed out. Together, these conditions begin to make some sense out of a bad fix.
Initially, Bush and Paulson, backed by the slavish Republican leadership in Congress, resisted, calling for the bill to remain "simple and clear." Republican leaders denounced help for homeowners and Main Street as "political" and "partisan" as opposed to bailing out the Master's of the Universe which somehow is an emergency above politics.
But Paulson is a deal maker. As his testimony indicated today, he'll trade nominal oversight and a few bridges for the $700 billion. As someone who made half a billion on Wall Street, however, he's been unbending on limits on pay for his friends, on providing taxpayers with an equity stake in the firms that are helped, and on measures to force work outs of mortgages and a freeze on foreclosures. And he'll resist any detailed measures to regulate Wall Street to insure this doesn't happen again. For all the talk of bipartisan accord, this will be a face off. Democrats will have to stare him down.
With the financial markets reeling, who will blink first? Will the Democratic leadership insist on common sense? Will Paulson be able to panic Congress into folding? Will the financial firm lobbyists now swarming the Capitol like a plague of locusts be able to rent the votes they need?
The decisions will be made over the next few days. If you want to make your voice heard, go here to contact your legislator, or to get more information.
But this staggering bailout - as perilous and costly as it will be -is only a stop gap. Broader lessons need to be drawn; larger and more permanent reforms are needed. One thing should be clear: the conservative era is over. The theology of market fundamentalism has proven to be a false idol once more. As Joseph Stiglitz has argued, the collapse of Wall Street is to the market fundamentalists what the fall of the Berlin Wall was to communism. It's over. The right has proved once more that it cannot be trusted to run the government it scorns. A trillion dollar debacle in Iraq. A trillion dollar bust on Wall Street. Hundreds of billions pocketed by Big Pharma and Big Oil. It is time for a reckoning.
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How it Works Part 3:
It used to be that the government printed the money and loaned it and the entire government was paid for by the interest. We could do that again and have around $900 billion a year more in revenue than we currently do, and eliminate taxes in the bargain. This would cover universal health care and fix Social Security. But rirst we need some real patriots to stand up and say "No more!" It's no coincidence that the Secret Service, which "protect" the President and V.P. are under the auspices of the Treasury Department. John F. Kenedy issued an executive order to print money against the country's reserves of Silver. He was dead very soon afterward and it was never implemented.
This whole thing, start to finish is one big scam, executed with military precision. - are we going to stand by and watch this robbery be committed, or are we going to just quietly hand over our wallets, and our kids' and grand kids' wallets too to this mafia?
How it Works Part 2:
So now we have been given a ransom demand by the Fed Reserve and George Bush: "Give us the power to print $700 billion in your names as co-borrowers, which we will create out of thin air the way we always do, and we will use it to pay ourselves $700 billion, which the taxpayers will then have to pay us back with interest in consideration of handling the entire bogus transaction! They get us coming and going.
This is a much more sophisticated replay of 1929, when JP Morgan, The Rockefellers, Rothchilds and others liquidated their stock holdings then printed false rumors in the press they owned and caused the runs on the small banks and the stock market. They bought up control of the premier American companies, put their competition out of business and caused the great depression so they could feast on the spoils at pennies on the dollar. They blackmailed the government into allowing them to create the Federal Reserve Banks and to control the currency. They have been running our government from the shadows ever since. The only way we can stop these thieves to to arrest them and charge them with fraud and treason and to seize control of the Federal Reserve and the power to print money.
Part 3 Next!
How it Works Part 1:
Nobody is telling the people how this thing really works:
1. The Federal Reserve is a PRIVATE bank owned by the big banks, not the government.
2. Money is created in response to the demand for borrowing. Banks are allowed a ratio of 16:1 loans to actual assets/deposits.
3. Wall Street in collusion with the banks issued pretend insurance policies (without insurance reserves and asset requirements required of insurance companies) called credit default swaps (CDSs) on the mortgage backed securities (MBSs). They cross insure each other to the tune of total "derivatives" in the amount of $1 Quadrillion dollars - the total world economy is only $60 trillion! They paid each other premiums and sold the paper back and forth to "wash it" and show it's "value" to the market. The bank members of the Fed, who held many of these MBSs, called the CDSs on Lehman Brothers, AIG and Merrill Lynch to start the end game. The Federal Reserve's member banks are robbing us. If we let the CDSs default then there are no Securities firms, hedge funds and many banks left standing. They dodn't have the assets and reserves to backup their obligations under the CDSs. This is by design, so the banks can take over the big brokerage houses (they just got Lehman Bros., Merill Lynch and AIG), and now are blackmailing us into giving them $700 billion in exchange for all their bad MBSs.
Wow, nice breakdown of this corrupt system. If Congress just sits there and takes this bailout plan, they are playing right into the hands of these corrupt yuppies who know way more than they are letting on. Such is the way of government. The dollar means nothing, but yet it means everything to the average american who is inevitably taking the biggest hit from all of this. The bailout will in no way help this mess, it will only put money back into the hands of the giants that caused the deficit.
Radical change is the only thing needed.
Again: LEND them the money at interest on the condition that they lay off employees, slash salaries, and eliminate "performance" bonuses and golden paraschutes. If they fail to repay, then forclose and expropriate. With a loan, it is up to THEM to find buyers, liquidate assets and balance the market. These guys have preached the Friedman primacy of the market for decades, let them prove it. The American people will not be played for suckers again.
I think we need a march on Washington, and on every state capital in the union, and every county seat in every state. Pick a date; I'll be there.
We can b itch and moan online and even send letters to congresspeople. But until we stand up for ourselves, we'll be falling for anything.
OK, I'm not a historian. But remember when the people in Ukraine (I think) knew that their vote for president had been rigged? And they refused to leave the city square until there was a recount. No chanting, no screaming: just thousands of citizens refusing to take this $hit anymore!!
I'm as mad as h3ll
The hired Halliburton mercinary private army would not let that happen. And why do you think the same people have been busy building concentration camps in remote areas. This is not BS there is ample documentation. However, having said that, in sufficient numbers even the hired thugs can not stop the people "revisiting the revolution" (Jefferson).
McCain's request today to postpone the debates is another effort at distraction. It's the same principle as 3 card monte. Distraction so that the face card, distraction so that the ball under the cup is lost in the shuffle. Joe Biden's speach today put McCain on notice, and I think that he's not prepared to engage Obama without coming across as out of touch and Bush III.
Its just a ploy and a photo op for McCain ! How dirty is that ? Here we are in the midst of a lousy situation and McCain wants to bring the media with him back to Washington so they can take his picture looking Presidential ! I also agree with your other statement that he is afraid of looking ouy of touch with American's in this debate about foreign policy !
YyUP. AQNOTHER SMOKESCREEN TO KEEP PALIN OUT OF THE PICTURE.
I understand that the F.B.I. is investigating at least 26 of the largest Firms, including the major ones that are even now waiting to be rescued. Someone up there in Washington must suspect something. The trouble is that even if the F.B.I. find something amiss, what is to say it will even warrant a prosecution. WE should all remember that it is a Bush/Republican Administration Flunkie that heads the Justice Department. That Mukasey Bozo is no better than Gonsalez was. He has worked his own magic at trying to prevent justice time after time since he was installed there. I an say with near certainty that the only folks who may get prosecuted will be lower echelon peons if even that.
Your onto something there ! Part of Paulson's plan has a clause which would give immunity for the heads of these institutions .Now why would Paulson put that clause in there if they didn't know more than they are letting the public know ? Personally I think this whole thing is a scam on us citizens cooked up by this administration along with Paulson and Bernanke to protect their own interests .
I am not saying the economy isn't bad, .What I am saying is I think this was planned all along ,otherwise why wouldn't those who are suppose to understand the markets and the economy have known this could happen when inflation was running wild and why didn't they do all they could long ago to avoid this ? The only reason I can think of is they wanted it to happen !
This whole thing has been planned for decades. Nancy Pelosi helped it along by taking Impeachment off the table.
"Banks and investment houses carry weapons of financial mass destructio
I haven't forgotten what was happening the last time this same administration tried to scare us with WMDs. They were lying through their teeth the whole time.
There is nothing to lead us to believe that Bernanke and Paulson, and the Bush administration, are the ones to lead us out of the current crisis.
It's far more likely that this is a power/money grab, and the most we can hope for is that it will be the last one for a long time.
Screw the Wall Streeters!
The only "bailouts" I would go along with would be to save GM, Ford and Chrysler - - companies that provide tens of thousands of jobs for working class Americans.
Let's put the money aside and use it for loans to small businesses who create jobs and for mortgage "reduction" or 'buydown" for deserving homeowners - - to help keep social security and medicare solvent - - and to provide at least catastrophic health insurance for those without any.
Wall Street is nothing but a crap shoot or a roulette game where the croupiers are pea-brained, self-aggrandizing Yuppies wearing $100 neckties and $600 shoes who live for $125 lunches and designer vacations - - all paid for out of commissions generated by enticing unsuspecting Americans to roll the dice or put a chip down on a number - - ANY number.
Put some money down to cover the costs of investigation and prosecutions - - and let the traders move to Abu Dhabi to find work.
What's that old saw? "Pig in a poke." I'll have to give credit to Obama for his crystal ball though. Sure worked this time. And what's this garbage of no governmental entity or court will have authority over the decisions of the Sec. of Treasury? MONEY is POWER folks. Could this possibly be the beginning of "Martial Law"? I think we need to be EXTREMELY cautious here my friends. We CANNOT ALLOW such a concentration of authority in ONE person. For God's sake he'd have more authority than THE PRESIDENT!
You are correct. Look at the basic definition of Fascisim; a merger and conflation of economic and political power in the hands of an unaccountable elite. This is a blatant power grab, be cautious, very, very, cautious.
as long as people remain APATHETIC - The corruption will continue. people swallowed the permanent campaign of fear spread by the neo-right; people swallowed the fear hosted by pharmaceutical companies hawking their products on tv ads; people swallowed the media (ergo Fox News and the neo-right crew led by Bill O'Reiley, Ann Coulter, Rush Limbaugh, et al...); people swallowed the same fears time and time and time again until the people grew weak and APATHETIC choosing to whine and complain versus taking action against a blind and uncaring government consumed by the greed of power AND control - the true P.A.C of Washington. and now - people are 'surprised' by what Wall Street has done...???
Executives at Wall Street Firms say they will not take the money if there are restrictions placed on their compensation. I guess the sky isn't really falling then, is it? If the lying bastards were really in such desperate straights, I doubt they would be threatening to refuse the money. Congress are you listening?
My thoughts exactly. Either these companies are not in the dire financial straits we're being told, or these CEO's are the stupidest people on the face of the earth. Because if these companies really are t-h-i-s close to being bankrupt, those CEO's wouldn't be able to collect those astronomical salaries they seem to think are their right - awful all, if the company folds, there's no money to pay anyone, right?
Write them a letter or call them I did ! I emailed both my Senators and my Congressman and told them exactly what I thought of this bail out in no uncertain terms.
Somebody needs to find out how much some of the wealthy people have invested in Wall St. stocks.
Find out if they are the ones who are doing the pleading for all that money, with very few strings.
They are probaly panicking because they stand to lose tons of money themselves and could care less about the few middle class that have modest investments.
If the Government wants to give money away.....I will be first in line and I'm sure there will be a long, long line behind me.
If the country goes into depression, let the wealthy be the first to jump out of the windows like they did back in the 30's.
AMERICA, AMERICA... WHEREFORE ART THOU AMERICA...
Sold to the highest bidder....
This government has a record of trying to frighten people and stampede them into doing whatever they want. I am not in favor of their bail-out idea. Maybe a government buyout. What would be so bad if the government owned the financial institutions?
At the very least, the government should get equity for its bailout, and limit the salaries and perks of the executives. International oversight might be in order.
Zan-Gah
If twenty-six firms are being investigated by the FBI...and McCain is connected to Davis, and knew what was going on...give it up Christian extreme right...if it wasn't so shameful and devastating to the American people, it would be laughable.
Despicable what the government, many with ties to all of this, has done and let happen.
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