Sunday, September 21, 2008

Now Let Me . . .

. . . get this straight. A whole mess of banks and other financial institutions who are holding billions upon billions of dollars worth of debt, the vast bulk of it in mortgage-backed securities, are going to be relieved of that debt by the taxpayers of the U.S. There have been frantic meetings all over the capital this weekend, and it looks like a bipartisan consensus is going to get behind a massive bailout scheme for these institutions. The New York Times has an explanation of the whole scheme. So does "Talking Points Memo." What we taxpayers are going to do is buy all of this debt from these institutions. Estimates at present put the price tag at $700 billion. But that's the government projection. So the minimum amount we're talking is double that: $1.4 trillion. Bear in mind that this $700 billion is on top of the $85 billion that the taxpayers put up to bail out AIG. And it's also on top of the up to $200 billion (or more) price tag for bailing out Fanny May and Freddie Mac. So we're looking at a cool $1 trillion at least if the government figure is correct. And there's no way that's possible.

Let me be frank: everybody is talking about this being the largest bailout in US history. What it really is is the largest screw job the American taxpayers have ever gotten in US history. Many people are comparing this bailout to a similar one that rescued insolvent S&Ls in the late 1980s. But the two are not really comparable. Beyond rewarding the guilty and punishing the innocent, that is. Think about it: In the S&L bailout, the government bought all kinds of real property: land, buildings, and various improvements, which could then be resold, albeit at pennies on the dollar in many cases. In the contemplated bailout we're talking about here, the government is going to pay untold hundreds of billions of dollars to take completely valueless assets off the banks' books, to purchase shit, worthless mortgage-backed financial instruments that aren't worth anything and never will be.

Moreover, if the bailout package goes as planned by Treasury and the Fed, it will be free of any kind of relief for homeowners or regular consumers. All the relief is for the bastards who got us into this problem to begin with. That's been another constant theme of these pre-Screw the Taxpayer plan talks. The legislation must be "clean." That is, unencumbered by any provisions that go beyond the task of providing free taxpayer billions to the people responsible for this crisis.

Some Democrats are resisting this, insisting that the legislation provide relief also for "Main Street" as well. And some key Democrats are pushing for provisions to at least limit the golden parachutes of the CEOs of these rotten banks. “They should accept some compensation guidelines,” Barney Frank (D-Mass) said, “particularly to get rid of the perverse incentives where it’s ‘heads I win, tails I break even.’” The administration is opposed to anything in the legislation like this. Bush, the vile little pretender in the White House, says any bill that has such provision it is going to be in trouble.

Secretary of the Treasury Paulson, a former Wall Street fat cat himself, "said he hoped to defer such an effort. 'Pay should be for performance, not for failure,' he said. 'But we need the system to work, so the reforms need to come afterward.'" Afterward! Let's bailout the capitalists now and worry about fixing the system later. Can you believe the brazen arrogance of these guys? Can you believe the Democrats are going to let them get away with this? This shit just makes me crazy!

All I can say is NO! A thousand times NO to the whole miserable scheme that's going to rescue these greedy SOBs who worship the free market except when their own asses are in trouble, that's going to give them hundreds of billions of dollars out of the pockets of hard-working citizens whom these Wall Street tycoons with their golden parachutes wouldn't piss on if they were on fire. No! NO! NO!

I cannot understand the complete lack of spine in among Democrats. Here they are with the largest hammer they've had in their hands in decades. Under the present circumstances, they could absolutely force a raft of necessary and stringent reforms on an out-of-control financial system--see five specific recommendations for reform right here--but instead they're rolling over like swine. I guess it's not so surprising when you remember that both parties slop at the same corrupt trough. Not a single soul is talking about anything that is going to punish the people who brought the country to this crisis. Everybody in Washington is stampeding in panic. You mark my words: the most corrupt and hapless administration in the history of this country is going to get what it wants here.

But just so you know, there are other alternatives. It doesn't have to follow the plan of the plutocrats. Take some time and watch the latest Bill Moyers Journal. Listen to voices of reason; listen to Kevin Phillips about the dire situation we're in. We're watching the beginning of the end of the American republic. I really do pity my children and grandchildren. They deserve so much better from us.
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