The cartoon above is over 100 years old. The inset may even be older. It may be time to add a third version to depict the robbers of the late 20th and early 21st Century. Perhaps the Queen will construct one this weekend. Click on the cartoon for a larger view.
Calling Paulson and other Investment Bankers “Robber Barons” would be to compliment them.
At least the old Robber Barons of the late 19th and early 20th centuries had a few civic bones in their bodies. For example, there was Carnegie whose legacy created all those libraries. There was J. Paul Getty, founder of Getty Oil who continues to share his art, long after this death with the world. However, if you are searching for a civic bone in one of the Robber Barons of the late 20th and early 21st centuries, you would have better luck searching bone in a slug.
FOR MORE INFORMATION ON WHY HENRY PAULSON DOESN’T QUALIFY AS A ROBBER BARON:
The House is likely to cave in to the Wall Street billionaire bullies today, but ordinary Americans can still hold out for a miracle--after all there have been plenty of them so far this political season.
QUEEN’S REVIEW OF “HOW TO BREAK THE MONEY MONOPOLY”
This great article appearing in THE NATION by Nicholas Von Hoffman is great from its beginning paragraph to the end. It is one more in the growing indictment of Wall Street
“Once again, the small group of financial organizations and the few thousand people who constitute what we call Wall Street have brought the country to the verge of ruin. It’s been barely ten years since they visited the dot-com boom and bust on the nation and twenty years since they took us to the edge of ruin in the savings and loan scandals. . .”
Not only does Hoffman remind us that this is not the first time that Wall Street has brought our country to the brink of ruins [and it's not been "barely ten years", it's been less than eight years], he also reminds us that Paulson has enriched himself by over half a billion dollars at Goldman Sachs. It’s not exactly like he is a disinterested party in all this.Read More »
I wonder if the members of Congress, the Bush Administration, Paulson and Bernanke will remember the words of Abraham Lincoln: You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.
It does seem that several million American chickens are beginning to remember that this is not the first time we have been threatened to “act or else be prepared for dire consequences.”
Considering the dire consequences that we suffered anyway and still continue to suffer in spite of the fact that we elected a Democratic Congress two years ago to repair the mistakes of the Iraq War, this chicken is willing to take her chances and say no to Wall Street and their $850billion dollar bailout. Bail yourself out–try a little of your own economic neo-liberal theories on yourselves. After all, “individual” responsibility as opposed to community is one of your cornerstones. You are the people who make fun of welfare. Stop asking for it. The American people have already given more far more than you deserve.
I just read an article in Global Research that made me even more resolute in wanting to put the brakes on this $700billion bailout proposed by George Bush and Paulson. It is titled “Financial Bailout:America’s own Kleptocracy” and was written by Michael Hudson, a Research Professor of Economics at the University of Missouri.
“. . .We must act now to protect our nation’s economic health from serious risk,” intoned Pres. Bush on September 19. What he meant was that the White House must make the Republican Party’s largest group of campaign contributors whole–Wall Street, that is–by bailing out their bad gambles. . . “ Near the end of the article, Hudson suggested that the Republican slogan this November should be “Gambling insurance, not health insurance.”
What the Paulson-Bernake Plan Really Means to Americans
This plan will enable banks to sell off the homes of five million home mortgage debtors faced with default or foreclosure this year. Home-owners will lose their homes but the Fed will pump enough credit into the mortgage-lending agencies to enable new buyers to go deeply enough into debt to take the jumk mortgages off the hands of the gamblers who presently own them. If this sounds like a shell game, it sounds like a shell game, because that is exactly what it is.
Remove the sweeping power given to Paulson and the Bush Administration. In fact, remove them entirely from the picture and any Wall Street representatives and bankers. That is the first step.
Many Americans, including the Queen, feel that conservative Democrats and Republicans have played their financial shell games for the rich for the past thirty years and we are done. We are calling their bully bluff and saying NO.
We understand that without conservative Democrats voting with Republicans that we would not be in the mess we are in today. We want a new deal–not another raw deal. Congress didn’t get it in 2006 when we elected a Democratic Congress on the mandate to end the Iraq War and bring our sons and daughters and our money home. (Perhaps we should have given our Democrats a litmus test for being a progressive--many of them would not have tested positive.) Maybe they will get it this time.
In case you haven’t heard, the House voted against the proposed bail-out. 228 NAY to 205 YEA.
Well no surprise, the server is down for the House of Representatives and I am unable even to email my US Congressional Representative Sam Johnson and thank him for voting against the Bailout.
It would be an historical first for me to ever thank Sam Johnson for any of his votes. Thus it is a shame I am not even able to email him.
Of course, it may be relevant to point that that although Sam and I are in agreement on the outcome, it is not for the same reason. Sam voted against the bail-out because he hangs on to the economic neo-liberal nonsense that the market will correct itself.
I am against the bail-out because it changes little. The same failed administration that brought us such memorable lies as “WMD” and “smoking gun” would be in charge of distributing $700 billion of the taxpayers money? Paulson and Bush are to be responsible for handling $700 billion dollars of American taxpayers money? And I supposed to trust them? How many times will Congress ask me to be a fool? Not this time. Not this year. Pelosi is going to have to return to the drawing board for this one.
Well it might be fine for rich conservative Democrats and their Republican pals, but it’s not OK with me. After all, the real Kings and Queens in a Democracy are you and me, pal–not them. I hope that more Americans wake up to this and start wielding their power too.
Monday: Call to Stop Paulson's Plunder
(1) Call your Representatives and Senators at 800-473-6711 or 202-224-3121 and say No Bailout!
(2) Email them too and tell your friends:
After a week of high-drama negotiations, Congress and Hank Paulson issued Bailout version 1.1, which is just the original Paulson pig with a lot of lipstick.
Republicans say the deal will be profitable for taxpayers, but they are lying - just as they did about the invasion of Iraq producing lower gas prices. It's a lie because Paulson has full power to pay too much for the securities and he will because his real goal is a bailout of bank executives and shareholders with our money - a massive ($2,333 per person!) transfer of wealth from the poor and middle class to the rich.
Democrats say they got oversight, accountability, and limits on executive compensation but each of these provisions is so full of Republican-written loopholes that they are meaningless - just like all other restrictions imposed on the Bush Administration, from Iraq to wiretapping. And that's before Bush simply negates any restrictions he doesn't like with one of his unconstitutional (and hence impeachable) signing statements.
So our answer remains ABSOLUTELY NOT.
The House will vote on Monday and the Senate will vote on Wednesday.
So call your Senators and Representative right now to say "No $700 Billion Bailout for Wall Street" - dial the Capitol switchboard at 800-473-6711 or 202-224-3121 or dial direct using the instant phone lookup on the right side of http://usalone.com
And if you have not e mailed your Senators and Representative , please do it now:
Find more information and comment here:
Thanks for all you do!________________
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Are You Registered to Vote? Are You Sure?
Republicans are working quietly to steal another election by disenfranchising Democratic voters, just as they did in 2000 and 2004. So please make sure you are registered to vote!
BAILOUT BIL DEFIES WILL OF PEOPLE
White House and Congress Suspend Democracy
To Help Wall Street
(Wash. DC) The White House and Congressional leaders from both parties announced a tentative bill to bailout failed financial institutions. The bill is a response to the $700 billion initially request by the White House last week. The bill allocates $250 billion to start with a total authorized of $700 billion. The money will cover the losses of distressed Wall Street firms facing bankruptcy due to bad investments, primarily in risky real estate securities known as subprime securities and "derivatives."
There were no provisions announced to bailout citizens facing foreclosure or help with their bad investments.Read More »
The House Republican strategy is more of the same--of that much I am certain. The deal that the Democrats have worked out with Paulson and Bush is likely a good deal for the people because Bernie Sanders is behind it. That is the ONLY reason I trust it. If Bernie Frank says it's a good deal and it works for the people, then it is. He is a democrat who can be trusted to represent the people.
As a citizen, I would say: go for it and finally end the rule of the conservatives who have just about single handedly ruined this nation with their conservative ideology that serves the rich. If it has to be labeled as a "democratic" legislation then so be it. We don't have to have the House conservative Republican approval to pass this bill. Let the world know that 1) this situation was created by greedy conservatives and 2) the mainstay of their creed "the market will adjust itself did not happen." It will be the complete and utter end of the conservatives AND the Republicans--not the Democrats. They will no longer be able to manipulate the markets the way they have for the past 8 years.
The Bush/Paulson scheme didn't work and the reason it didn't was because it was so transparent that even the dumb and dumber Americans FINALLY understood that they were being shafted once again by the rich conservatives who have run this counntry in the ground and started to call their senators and Congress people over it. The idea that the White House and conservatives have gotten so bold that they could demand $700billion--a fund that even they, when someone finally had the nerve to ask, how they arrived at that sum, could not answer. Someone (from Paulson's office I think) said that they did't know, but they know it had to be a really big sum. They honestly said just that. I don't know if that came from the White House or the Department of Treasury but regardless they used no economic theory, no math to determine the $700 figure. It was just something they pulled out of their you know what.Read More »
The Money Party (7):
Just Say No
(Wash. DC) We're being blackmailed into accepting the responsibility and debt for the worst managed financial institutions in the history of this country. The starting price, our debt, is $700 billion dollars.
What's really about to happen is that the failed financial institutions will be rewarded for their bad behavior. As a result, they and others will be encouraged to do it again. It's just a matter of time.
We're under the gun and told that we have just days to make a decision to bailout these mismanaged entities. The last thing they want is an open hearing on the problem. Deliberation is deadly for them.Read More »
Take a look at the following headlines and blurbs. If these don't get you off that couch and to the telephone to call your Congress people and tell them NO DEAL TO THE LATEST SCAM FROM BUSH AND HIS CONSERVATIVE PALS, then nothing will. While you are at it, you can tell them to impeach the entire Bush administration now. REMOVE THEM FROM OFFICE ON THE GROUNDS OF GROSS NEGLIGENCE AND INCOMPETENCY.
Go Peak Oil: Life after the Oil Crash for the complete stories
One of my favorite phrases from this: Pigs get fat, Hogs get slaughtered
global mergers and acquisitions at the Towers Perrin consulting firm . . .
especially those with a high degree of exposure to commercial real estate.
It is not true that this is 700 billion that we will never see again- like the money spent in Iraq. Some economists estimate that when the government eventually sells these assets off that the government will either make or lose 200 billion. In the Chrysler bailout, the US taxpayer got ever nickel back, with a bit of a profit. It could be argued that more than 200 billion will be lost, but whatever the number, these assets aren't worth zero.
Last April, I put a PBS video up on YouTube that explained the sub prime market crisis. This post attempts to put this crisis into the larger perspective we find ourselves in today.
Ten years ago, you would go to a bank for a home loan, and the banker would decide how good a risk you were because they would be lending you money that came from their depositors' savings accounts. Banks had rules about how much cash and collateral they had to have to support the loans they had on their books, and the bank or S&L had an interest in making sure the loan was good.
Enter banking industry deregulation in 1999 when republicans in congress rammed through repeal of the Glass Stegal Act. What this did was allow investment banks (which were not regulated) to aggressively compete with the banks for this business. Instead of requiring 20 percent down they would offer 15, 10 and even zero percent down. They would lend the money to the home buyer, then turn around and sell the debt as a security. This "securitization" of debt meant that they would pool a thousand loans together so that if one defaulted, the risk would be spread out. Just like people bought Treasury and municipal bonds, they would buy these mortgage backed securities. Instead of liability on their balance sheets, they recorded it as a profit generating asset. You'll also hear these mortgage backed securities refered to as CDOs.
The financial industry has trillions of dollars of these credit instruments floating around, and financial banks had no requirements to be conservative with the risks they took with loans. Most owe 30 times more money than what they actually own. They call this "highly leveraged". It makes the person seem very sophisticated and clever to be able to magnify the power of their money so much. I know a few dirt farmers that would put it a different way. They'd say these boys were in hock up to their eyeballs.
Interestingly, many in congress viewed this with great suspicion and noted that if an institution walked like a bank and talked like a bank then it should be regulated like a bank. Loans being issues with little concern for the risk of not being repaid bore great resemblence to the Japanese real estate asset bubble of the 90s. Unfortunately, the Federal reserve was under the control of a laissez faire economist that believed that financial market players were smarter than government bureaucrats. This fed Chairman- Alan Greenspan- refused to regulate the financial banks, and the republican congress blocked legislation that would have regulated these markets.
There are trillions of dollars of these mortgage backed debt instruments that are in part held by investment banks. Today, with housing prices going down and owners defaulting on their loans, the value of those debt securities go down. Today, there are few buyers of many of these exotic debt instruments including, but not restricted to the mortgage backed securities. No one knows what they are really worth, and because no one will trade them, they have become illiquid assets
Because the amount of money an investment bank can borrow is based on what their assets are worth, they cannot borrow as much money as they used to be able to do. This means they cannot make the profits they used to. Goldman Sachs for example reports their profits for the last quarter are down 70%. When other companies begin to doubt your ability to repay loans, they demand even more collateral and proof of the worth of your assets. It would have been possible for Lehman to strengthen their balance sheets last year by selling some of their stock last year when they gave every appearance of being an impregnable bank. They refused to, taking the risk that they could bluff their way through it. Last weekend, they were so far gone that no one wanted to buy them. Merrill Lynch had a similar exposure on their balance sheets and knew they were next, so they opted to merge with BA before they met the same fate.
It is not true that all of these illiquid assets are mortgage backed, and it is also not true that they are worthless. Some of these loans were for houses whose real value is one half of what they were appraised at. In other cases the loans will be fully repaid with interest.
What the media is not discussing is that this securitization of debt was extended to all forms of credit and the crisis should not be viewed as a real estate asset bubble but a general credit asset bubble. This shall be covered in an upcoming post. It is astounding the games that these financial geniuses were playing with money.
References: (Don't take my word for all of this)
A great book on this is "The Trillion Dollar Meldown: Easy Money, High Rollers, and the Great Credit Crash", Charles R. Morris $9.99 if you want it now and have a kindle, $10 for some used copies on Amazon.
Today, in an article in The Nation, “Goldman Sach Socialism”, William Greider points out what the Queen and others pointed out yesterday albeit Greider was more eloquent:
“Wall Street put a gun to the head of the politicians and said, Give us the money–right now–or take the blame for whatever follows. The audacity of Treasury Secretary Henry Paulson’s bailout proposal is reflected in what it refuses to say: no explanations of how the bailout will work, no demands on the bankers in exchange for the public’s money. The Treasury’s opaque, three-page summary of plan includes this chilling statement: [Greider then quoted the now famous bully passage, Section 8 from the three page ramson note that Paulson and Bernake have given to Congress.]
“Section 8. Review. 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.” In other words, no lawsuits allowed by aggrieved investors or American taxpayers. No complaints later from ignorant pols who didn’t know what they voted for. Take it or leave it, suckers. . .”
It is just one more example of extortion from the Bush Administration. The question still remains as to whether Congress will bend over one more time and take it.
Who knows? All I can say at the moment is that I am so disgusted both with the Bush Administration as well as with Congress that I am beyond angry.
This is exactly what happens when conservatives are put in control of our government–the people of our nation lose big time.Here is the link to the rest of Gerider’s article if you have the stomach to read any more about this farce.