Bailout thoughts

Bailout……..ahhhh…….I feel SOOO much better, don’t you? Nothing like being bailed out to fill you with relief and a warm fuzzy feeling of being “taken care of”. Kinda like going to your Gramma’s house and getting a warm cup of chocolate on a cold snowy day…….

Except there’s an off note in this song, like a big fat drunk guy bellowing out “Skynyrd!!!” in the quiet part of the solo in a Vienna Boy’s Choir concert, or the bridesmaid firing off a huge wet fart fly at the “I do” part of the wedding, something not quite right, but still somehow you think it’s not the end of the world, just something a little off in the picture….

There’s an old saying that has various forms, but it usually goes something along the line of “if you want to understand something, just follow the money, and it all begins to make sense….”. And just like the Iraq war has never made much sense unless you figure out who’s getting paid and how it’s getting done, and WHAT’S been done with all that money, this thing doesn’t make a lot of sense.

So I started looking around, at first to try and get a sense of what exactly this “Bailout” was in “on the ground” terms, and then also to try and get a sense of how we got to this place…..here’s some interesting things I’ve bumped into so far. (I don’t pretend to be an expert, and things may change as more info becomes available, but these things are relevant and at least interesting…)

Here’s the original text as submitted by Paulson.

Here’s a biased but interesting comparison between the 3 main versions that have been up on the table, including the one that passed. You’ll notice that every protection for the ordinary citizen has been stripped out of the version that finally passed…..there’s a shocker eh?

So as I understand it now, it will take the form of the Treasury buying the “bad” assets from the companies, in the same way that any other company might. So the companies would remain in place as is, and the Treasury (you the taxpayer) would now “own” the bad assets, for better or for worse. (One could imagine that’s mostly gonna be worse, since ownership of these assets was apparently enough to bring on financial Armageddon when these companies owned them.)

There’s something really important to keep your eye on here, and that is that the companies will remain essentially the same, with no taxpayer ownership except some shares in some cases, mostly without any responsibility to the taxpayer, (with the exception of a company that is TAKEN OVER completely by the government which will be few of them, like AIG). In all the other cases there will be no limit on Golden Parachutes, severance packages etc, in fact in most cases these executives will be able to stay in the companies, and they will continue to receive all the benefits and pay that they have been getting…..to go ahead and run these companies into the ground while receiving their massive “compensations”. And then have us the taxpayers save them. From themselves and their own bad choices. Again. Personal responsibility indeed…..

REALLY rich people who live lives most of us haven’t really seen even on film, being “saved” by regular and/or really POOR people, who HAVE seen that kind of life, every day in their own lives.

So why would we do this? Sink $700,000,000,000 (well over a trillion after it’s all in) into bad assets that were SO bad as to threaten the worst financial situation since the Great Depression, and not AT LEAST own the companies we’re saving? Well, some would have you believe it’s to save ourselves, and some think it’s a MASSIVE redistribution of public funds into private hands. Here’s Namoi Klein’s thoughts, how does this sit with you? (Watch at least through 2:35, farther if you can.)

That’s my personal take, it’s something nothing more than a huge money grab, with the added benefit of another massive money grab coming right behind it, especially if McCain wins, but probably even if he doesn’t.

It seems we really DO live in a welfare state, it’s just that it’s not the poor we’re helping, it’s the very very rich and the corporations they create to become rich……welfare state? Yeh, corporate welfare…..I guess welfare is good as long as it’s going to the folks who will never, ever ever need it……BAILOUT?…..handout. And on a scale that puts every social program to embarrassed shame as a money sink…..and even those will be up on the chopping block soon.

How about this quote from a recent article in the NYTimes? It’s very interesting that this info is out there and part of the public record, yet I have yet to see ANYONE mention this anywhere except in this article, when the main figure in the whole play is center stage…..now AND then.

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agency’s failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

Wow, really?

The main Treasury guy now was one of the guys begging to be able to do the things that allowed this whole thing to happen, just 4 years ago, and now he’s the guy begging for and demanding the bailout…..and we’re all gonna go up in a ball of smoking worthless paper if he doesn’t get what he wants? Have you see this guy’s stern demanding lecturing finger-pointing performances on Capitol Hill and in front of the news cameras? Talk about some doom and gloom and and “Gimme what I want or you’re fucked” hysterics….he’s basically throwing adult version of a shitfit tantrum…..

Except HE STARTED THIS CRAP!!

How about this scenario……

All the investment bank heads get together and say, “How the hell can we get MORE money out of our positions at these giant paper-pushing firms (they don’t produce anything you know, they just make paper engage in a weird kind of incestuous inter-breeding that makes more worthless paper, on paper), and make our bonuses even bigger, and demand even higher pay for the spectacular job we’re doing generating shareholder profit, and then when the whole thing goes to shit as it inevitably will because we’re essentially building a house on top other water and saying that lilly pads will be a great foundation for this new awesome house, we’ll just get our boy Bush to put one of us in as Treasury head, run around screaming the sky is falling, and then basically get even more money thrown at us to pay off our part in this debacle, and walk away scot free, still getting paid and cashed out and whatever could be wrong with that?”

How do I get THAT job?

Now I just gotta say….what could possibly be MORE criminal than this, except for maybe starting a war behind the same kind of premise, (funneling public money to the seriously hardcore rich), except with the war you have the extra unholy twist that you sacrifice our innocent young people to get that one done….(I agree that’s worse, but you’ll take my point I think).

Anyway….I just thought since apparently the NYTimes doesn’t have the power or the readership to get this info out to the press and the general public at large, I’d help them out here on my blog.

And oh yeh, you don’t live in the country you’ve always thought you did, and you haven’t for a long time…you actually DO live in a country where this kind of bald faced rip-off actually has happened……but I’ll bet you’re beginning to figure that out….you are, aren’t you?

UPDATE

I forgot to add the little thing about how they got this thing to pass – here’s the list of pork – so far….

PORK BARREL EARMARKS ADDED THAT HAVE NOTHING TO DO WITH WALL STREET

$109 million for Nascar race track builders.

$200,000 a year for the manufacturers of wooden arrows for children.

$192 million for rum producers in Puerto Rico and the Virgin Islands.

$19 billion over two years for companies who do research.

$478 million for film and television producers over 10 years.

$62 billion for 24 million households excluded from the alternative minimum tax this year.

$17 billion for alternative energy producers.

$8 billion for Americans affected by hurricanes and floods

UPDATE II

So now it appears that the guys who drove these things into the ground are going to be receiving 10% ($70 Billion, with a B) of the public’s money, for ruining their economy and screwing millions out of billions of their investments.

Again, where do I sign up for THAT job, I think I could do it as well as they did….in fact, so could my dog.

The level of arrogance here is SOOOOO high that it can’t be seriously referenced to humans, and can only be referencing demons, or Bush, or aliens.

A least SOMEONE realizes what a hijack this is and is trying to do something about it.

Financial workers at Wall Street’s top banks are to receive pay deals worth more than $70bn (£40bn), a substantial proportion of which is expected to be paid in discretionary bonuses, for their work so far this year – despite plunging the global financial system into its worst crisis since the 1929 stock market crash, the Guardian has learned.

Staff at six banks including Goldman Sachs and Citigroup are in line to pick up the payouts despite being the beneficiaries of a $700bn bail-out from the US government that has already prompted criticism. The government’s cash has been poured in on the condition that excessive executive pay would be curbed.

2 thoughts on “Bailout thoughts”

  1. Wade,

    Wow, I didn’t realize when you said you’d been into more politics than music lately, you’d been posting these GREAT essays!!

    I think we all had to rant on when that deal went down for catharsis’ sake.

    Just thought I’d share what I wrote one day which polarized a lot of people in my email list and even cost me two very close friends who I’d known since 1980!!! Yipes, the cahnces we take by spewing our minds! But what’s the alternative, total cranial explosion??????!!!!!

    Let ‘er Riiiiiiiiip I say!!!

    Anyways my rant and but one of many many responses follows.

    Keep in mind, this was written a while before yours was so there was a lot of info. that came to light since then. Also, I’m not particularly good or quick with technology, so I don’t know the first thing about including web links and You Tube clips, hence: my peice is infinitely less documented than yours and is just something I threw together off the top of me head.

    Cheers to you on your essays, Their freekin’ great, dude! Keep up the good work and how’z the new material going?

    Enjoy

    — On Fri, 10/3/08, Robert Basile>
    Subject: Who’s equally to blame for the mess we’re in? you might be surprised….
    Date: Friday, October 3, 2008, 12:46 AM

    Hey all you ConSERVative and LibRAL finger pointers!! It’s pretty common
    knowledge (in my layman’s book anyway) that the Clinton Admin. is as much to
    blame for this mess we’re in as Dubya, so let’s at least be fair here.
    Clinton may have taken us from deficit to surplus, but he erased the National
    Debt largely by pandering to (but ultimately undermining) the lower-middle
    class. (You don’t think he set up his post-presidential office in Harlem
    ’cause he enjoyed the view out his window do ya?)

    Clinton zeroed out the deficit partially by offering people home loans and
    credit cards they later couldn’t afford, and sloooooooooooooooooowly raising
    minimum wage$ while simultaneously opening up the immigration floodgates which
    decreased unemployment (making him look good) but which actually resulted in
    driving DOWN wages. Why did more equal less??? Because that slooooow pay rai$e
    couldn’t keep pace with runaway inflation–caused largely by rising oil
    prices which he did little to remedy–(see un-adopted CAFE Standards/classic
    supply and demand story below).

    Then his Admin. “appeased” the lower-middle working class further by
    offering them a lot of cheap Chinese imports at WalMart, CostCo and literally
    everyplace else, whose “great deals!!!” made those hard-working but
    naive people forget that they were actually participating in undermining the
    very economy they depended upon to make their mortgage payments! It’s
    amazing what people DON’T realize when they’re busy strolling in the
    mall over the weekend, blowing their paychecks. So, more money to China to pay
    down the GOVT’s debt, but higher balances on the 30% interest credit cards
    and more debt for THEM. (by the way, can the Cable Company raise your rates 25%,
    if you’re late on ONE payment?, I don’t think so! But when you pay as
    much to elect someone, like Enron and the credit banks did, you get to rewrite
    existing legislation and have your way with the aMERrrican people, righty?)

    But never fear, the solution was here!!! It was OK, because a simple
    “re-fi.” on the home mortgage to pay off the credit card debt
    they’d run up to feel better about the lousy work-work-work or
    welfare-welfare-welfare-(nothing in between)-based lives they were living and
    “taa daaaaa” all was well in their world again! More credit to buy
    more cheap eviro-UNfriendly imports that eventually broke and ended up in
    landfills—Niiiiiice! And credit card companies were all too willing to extend
    even more cards and higher credit limits to the working stiffs who were more
    than willing to continue using them.

    Also, instead of enforcing CAFE standards which would have forced U.S. auto
    manufacturers to increase fuel efficiency and to build non SUV-based vehicles
    that would have increased sales both here an abroad, thus decreasing our
    national debt, Clinton let Detroit go on selling fuel HOGS which were destined
    to rot in the lot, thus further undermining our position both in the
    import/export markets AND in energy independence. Detroit’s solution, after
    convincing their workers that S.U.V.’s were the way to go (when they clearly
    knew otherwise)???? Close plants, leaving millions out of work, and say;
    “Sorry, we didn’t see these higher fuel prices coming, it wasn’t
    personal, just an ‘economic decision’ so we could better compete with
    Toyota and Honda who are eating our lunches.” Hmmmmmmmm…………

    Then, when Dubya took over (er, stole the vote), he couldn’t get off his
    high horse and follow through on the initial Iraq exit strategy that
    would’ve had us long gone by now and have had Iraq paying for its own
    infrastucture rebuild through oil revenues. That’s because DICK Cheney and
    company (who lied about WMD and the Al Quaeda/Iraq connect. to get us INTO the
    war) first had to pay back HIS buddies–all the pillagers who financed
    Bush’s election (Halliburton was only one of many) who’d now lined up at
    the trough to pig out on war profit$. And Dubya maximized those profits by
    keeping us in Iraq while lying about “honor” and “mission
    accomplished”—blah blah blah….

    Soooo, the rolling stone (Iraq War) that’s gathered LOTS of mo$$ (i.e.
    greenback$, that we need here at home to keep our economy strong), is finally
    bearing down on us all. Debts have risen, interest rates ballooned and the
    little credit-crunching piggies haven’t kept up with the big ones, (who,
    incidentally, are about to skip off into the sunset along with Dubya–while the
    little borrowers are losing their shirts). Taaa Daaaaaa, the final act in the
    tragicomedy that could become a Dario Fo play. But ain’t it always the
    same?????

    Annnd, is it any surprise that folks can no longer tread water and their ships,
    er houses, have begun to sink in the the stinking pile of B.S.? Nope! Especially
    since many more of their their jobs have since been exported to China/Asia (and
    to a lesser extent Latin America) to finance the payback of the NEW war-caused
    National Debt through yet MORE cheap, and sometimes downright dangerous Chinese
    goods.

    By the way, ever wonder who manufactured the replacement bolts that hold on the
    tail of that Boeing you’re about to board, or who installed them and if they
    could even comprehend the language in which the instructions were written??????
    Ever wonder WHY we’re constantly having to pull tainted food and
    lead-paint-ridden toys from our store shelves, due to lax regulations abroad and
    at home????? Or wonder why you can’t even find ONE item that was NOT
    manufactured in China at any of our National Parks gift shops or even the ones
    at Cape Canaveral–home of our national pride space program??????!!!!!!–Thank
    Bubba Clinton for that, ’cause if he was still in office he’d probably
    start an energy independence program by letting the Chinese manufacture all the
    alternative energy products he’d have us develop to get it done. And
    don’t even get me started about NAFTA and what THAT’s done to the U.S.
    job market and to the world eco-environment as a whole, ’cause it
    ain’t pretty.

    So, in closing, although this registered Independent voted for Prez. Clinton, I
    wound up being severely disappointed in what he did to undermine this country,
    softening it up for the eight-year sucker-punch that was the Dubya Debacle. And
    nooooow the Wall Street Chickens are coming home to roost, so we can all wallow
    in their chickenCRAPOLA. Yep, the whole world’s beginning to laugh at u.s.

    Politico talk of saving Main Street?????? Pullllease! Main Street’s
    crumbling and so is Washington’s facade. The collective Wizard’s of OZ
    are being exposed for the string-pulling manipulators they really are. ALL
    PROFIT ALL THE TIME AND DAMN THE PEOPLE WHO DON’T WANT TO PLAY THE
    CORPORATOCRATIC GAME of WORLD BASHING AND TRASHING and PROFITEERING.

    Oh, by the way, this is an indy anti-POLITICIAN, not an anti Dem./pro Rep.
    rant, ’cause I’m certainly NOT for Rep. McLame’s proposed policies,
    and I mistrust Dem. O’BlahBlah’s campaign retoric as well, in light of
    his actual actions and INactions (i.e., not voting when it’s convenient and
    taking $Moulah from most of the usual suspects meaning he’ll have to pander
    to them later).

    Still, if I had to pick between scoundrels and all the trash that they’re
    about to drag into the White House, I’d
    pick………………………………………. as Johnny Cash kinda’
    said at the very end of one of his bigggest crossover hits; “Bill nor
    George, nor anyone but You!!!” But who’ll that “you” be?

    How ’bout Ross Perot? That’s how cynical I’M beginning to get!!!!

    I remain,

    r.aNT

    p.s. This is only the situation as I see it. There’s a lot more to the
    story and I could be wrong about some of it. So if anyone has any different take
    I’d love to hear it. The banter is educational and healthy.

    Is this really compiled by you, Robert?

    It is factually wrong. Clinton balanced the budget by raising taxes and making cuts. The most simple element of the “strategy” was abandoning the irresponsible and inept theories of the so called “Reagan revolution” and “Reaganomics.” When Bush senior was running against Reagan in the primaries, he called Reagan’s ridiculous supply-sided lunacy “voodoo economics” (implying smoke and mirrors–magic in which you can cut taxes and massively increase spending and let the deficit (harmless?) go up in a huge black cloud.
    When a young idealistic David Stockman, the wunderkind of the Wharton business school came to work for Reagan’s crew, he asked Regan and Weinburger and others how they really intened to make more cuts which by any mathematical standard would be MANDATORY without a deficit meltdown. They demanded him to announce publicly that the policy was sound and lend them academic credibility. He refused and was promptly fired and later wrote a book “The Triumph of Politics: Why the Reagan Revolution Failed.”
    Economists such as Galbraith and other centrist Democrats have been right all along about these ridiculous far right free market theories which are as naive as assuming an equal bowl of soup for all in a centrally planned Soviet economy. The long list of what Clinton allegedly did to cause our current meltdown is ridiculous. Don’t send me any more without specific sources. Hogwash.

    AND THAT WAS THE LAST I HEARD FROM THAT LONGTIME FRIEND WHO WON’T ANSWER MY CALLS OR EMAILS!!!! Whoops!

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