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.
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?
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
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.
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.