Archive for Saturday, September 27, 2008

Stop insanity

September 27, 2008

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To the editor:

When other governments nationalize successful businesses in order to redistribute their profits to the citizens of those countries, we become morally outraged and label it undemocratic socialism. However, our own government seems willing to rush forward to "rescue" or "bail out" Wall Street businesses guilty of gross mismanagement and criminally negligent behavior.

It seems that our free market theory has been replaced with a philosophy of privatizing wealth and socializing losses! We are told that the public should pay for Wall Street boondoggles without sharing in the windfall profits of successful corporations (Exxon, for example). Down on the farm, they call this "all pit and no peach."

To make matters worse, our elected officials are pressured to act immediately without examining the long-term implications of the so-called remedy or putting in place concrete safeguards against repeat offenses. What Wall Street needs right now are fewer CPAs and more CPHs (Chrome Plated Handcuffs).

When did bank fraud stop being a crime? To add insult to injury, the plan may include bailing out foreign banks with your tax money! We are asked to trust the government with 700 billion more dollars to deal with this self-inflicted crisis by the same administration that has in the past suggested that government programs are incapable of efficiently running anything more complicated than a bake sale.

Stop this insanity now. Insist that your elected representatives slow down or stop this process! Your children, grandchildren and great-grandchildren are counting on you.

James Redden,
Lawrence

Comments

slowleak 6 years, 6 months ago

This situation took many years, and in some ways decades, to develop. Given that, we are asked to believe that a reasonable long-term solution can be developed by congressional and financial leaders in a matter of days. The first proposals were basically "give us $700 billion, carte blanche to use it on Wall Street as we see fit, and the situation is too immediate and dire to allow for public debate and consideration".It may well be that a robust governmental intervention into private-sector banking is needed but scaring people senseless with proclamations of cataclysmic ramifications should they take the time to find a reasonable long-term solution is unconscionable. Additionally, we are asked to let the people who perpetuated the crisis with their incompetence and those would benefit from the so-called bailout, design and implement the remedy behind closed doors!In the last week many good ideas have surfaced as to how to deal with the crisis such as, FDIC type insurance for money market funds to provide market liquidity, the government's holding an equity stake in financial institutions it is "rescuing", and mandating congressional oversight of one of the largest government programs in our nation's history. Given some time for further debate, more insightful and reasonable proposals will come to light. If we are going to spend $700 billion we are going to have to either print the money (and deal with a drastically devalued dollar) or borrow the money from our creditors (China and OPEC nations) . We have run up a national deficit nearing 11 trillion dollars! Is it reasonable to assume that the rest of the world will continue to be willing to blindly finance the largest debtor nation in history without expecting huge concessions in return?Make no mistake, the timing of this crisis 40 days before our presidential election is not a coincidence. What we decide to do the next few days may well render whatever decisions we make in November moot. Should we choose to further burden the national budget with a program of this scale our next president will have little or no flexibility to deal with their issues of concern. Forget about John McCain's corporate tax cuts there will be no way to pay for them. Forget about Obama's reinvestment in social programs there will be nowhere for the money to come from.We don't make good personal decisions when hamstrung with fear and neither does our nation. Recent history in relation to post September 11th actions more than prove that. Do we really want to hear in another year or two what we heard about our Iraqi intervention? Sorry, "the experts were wrong", "our intelligence was faulty"and "if I knew then what I know now I would've voted differently".We have to take the time to get this thing right!

Godot 6 years, 6 months ago

If the bill passes, income taxes increase, the value of the dollar plummets , inflation rises, the price of a gallon gas goes above $5, mortgage rates increase, we have a protracted recession, and a huge percentage of the country's housing stock comes under the control of the Federal Government. As Barney Frank states, the intent of the Democrats is for the Fed to become the landlord and lender of first resort that will provide "affordable housing" by selling these houses to those the Dems deem to be needy, at a very low price and a very low interest rate. That is after the Feds buy these mortgages that are worth less than 50 cents on the dollar for as much as full value. This makes the foreign governments and hedge fund investors hole at the expense of the ordinary taxpayer.If there is no bailout, we have a recession anyway, asset values deflate, commodities deflate, the dollar becomes stronger, credit is tight, mortgage lending constricts as standards are tightened, and those who took a gamble for a big payoff pay the price for their risk taking.Either way, we are facing massive pain. I prefer the route that gets the pain over more quickly, and that gives the least amount of power to the government.

beatrice 6 years, 6 months ago

godot, you want to give the money to the failing banking industry without government oversight? That is just criminal.

tangential_reasoners_anonymous 6 years, 6 months ago

ASBESTOS: "None of you understand this mess."This is perhaps the greatest failing of the current Ad-mini-stration...messes which defy understanding.

ASBESTOS 6 years, 6 months ago

Bea do you want to give the money to the banking industry with all the earmarks the Democratics have added to it?Acorn got a 10 million dollar earmark.

tangential_reasoners_anonymous 6 years, 6 months ago

slowleak: "We have to take the time to get this thing right!"Hmm... it would seem the problem is that we have gotten it... right.

ASBESTOS 6 years, 6 months ago

The bill is 100 pages now and growing.This is why most reasonable people oppose the governments "help".

handley 6 years, 6 months ago

In this bailout all the ceo.'s should have to give up all of their big salary's and other perks. When is it not a crime to steal from a person. Stealing from the american people is a crime.

Godot 6 years, 6 months ago

Beatrice, learn to read. NO BAILOUT!!!! Let the foreign governments the the people in the Hamptons and on Wallstreet and in Hollywood and in the endowment associations face the music and take their losses.If you want to talk "criminal," it is the bill that Barney Frank and Hank Paulson and their Goldman Sachs sugar daddies crafted and presented to Bush as a "rescue,' the very plan that Harry Reid and Nancy Pelosi tried to ram through Congress.That is deserving of a hangman's noose.

tangential_reasoners_anonymous 6 years, 6 months ago

landslide: "However doing nothing would be even worse."A counterproductive war for which the consequences of exiting would be worse than ( ultimately, perhaps futilely ) "staying the course."A financial crisis in which doing nothing, again, would be worse.A recurring theme for the administration which never should have been... twice.Elect Obama. Clearly, America could do worse.

Godot 6 years, 6 months ago

The Dems have wasted no time in turning this crises into another pork barrell opportunity to finance the political campaign of Barack Obama through ACORN.Shameless.

Mark Stone 6 years, 6 months ago

The privatizing of wealth and socializing of losses is the undeniable but yet predicable result of this completely discredited and failed conservative economic philosophy and its policies of deregulation. The present Republican administration has been promoted as the nearly pure expression of this philosophy, the culmination of nearly thirty years of this conservative economic and political ideology.There definitely was negligence relating to oversight. There may even have been criminal activity in a legal sense. But the majority of the of this financial mess was allowed to occur and occur legally because of the systematic gutting of regulatory agencies and the laws that were originally put in place to protect "main street" from predatory opportunists who seem to pop up when our financial institutions are left exposed and unwatched. This was not unforeseeable; it was the direct result of policies enacted by this administration based on their conservative ideology.Now we find our economy in a critical situation and a bailout may not be a great answer. Even a bailout that has some protection built in for taxpayers along with other amendments to address limiting CEO salaries and other reimbursement, a share in companies that are being bailed out, etc. However doing nothing would be even worse. Congress does need to take the time to craft as ironclad a program with the greatest protection for the public's money as possible. Because one thing we have learned is that this administration will exploit any loophole, real or invented, to realize its ideological goals regardless of the affect on the American people and the country.

dandelion 6 years, 6 months ago

Stop the bailout. The only reason anyone is concerned now is because the rich might have to sell a couple of their houses. No one was concerned when the homeless population was growing. Maybe if we had to suffer a little we wouldn't let these crooks run the businesses and the government. Make the CEO's homeless. Stop the bailout.

ASBESTOS 6 years, 6 months ago

Barney Frank and Crhis Dodd got ACORN an earmark. Lots of milllions more for a liberal support political group.

Steve Jacob 6 years, 6 months ago

I know the bailout sucks, but are we prepared for what will happen without it? I think the market will drop like 1987, and we really did not get back on our feet until 1994.

ASBESTOS 6 years, 6 months ago

None of you understand this mess. Fisrt this is from letting of money in "sub-prime" and "Low interest" and "nothing down" loans to people that had no business being in loans. There is even laws passed by the Democrats that make Freddie and Fannie make loans to "undocumented" ie via a FIEN number, and no documentation loans, the last two are specialty laws for illegal aliens. That is why they were coming here, for a interest only loan. The majority of this problem is political, but it is owned by both parties largesse. CLinton may have started a program of low interest loans and nothing down home loans, but bush make them no down and increased the number.However that is "Part 1", the second is when they bundeled these loans and made "Mortgage Backed Securities", MBS. These were priced on something called "mark to market" with this definition:"1. The act of recording the price or value of a security, portfolio or account to reflect its current market value rather than its book value. 2. In terms of mutual funds, a MTM is when the net asset value (NAV) of the fund is valued upon the most current market values. 1. This is done most often in futures accounts to make sure that margin requirements are being met. If the current market value causes the margin account to fall below its required level, the trader will be faced with a margin call."In other words, these idiots were selling these securities to other idiots for the "face value" such as the cost of many homes plus all the mortgage they would be receiving over that term".Add in "short selling these assets and a domonio efffect was guaranteed.CEO golden parachutes need to be ended, and well as their outrageous pay levels, but I think the board rooms and shareholders are going to take care of tha one.The GOP revolt in the House over this is the $700 billion and how to make it happen. The Current Paulson/Bush/Senate Democrat Plan is just to "Give the money" to the Treasury with nnot many strings. The GOP wants to "sell bonds" or raise the money privately, with instruments.Remember the $700 billion is not the "mark to market" price, that is much higher, but the asset values of these securities are unknown and the current bill does not address that either, if we buy $100 billion of asset for $700 billion that would be collosally stupid, so would be buying $1 trillion or 2 of debt.The market may be rough on Monday, but the sun will rise. Businessmen want to make money, and if they see the Govt balking, they will surely make some profitable move.

ASBESTOS 6 years, 6 months ago

Good defender, when you don't agree or are too stupid to form a cogent opinion, then just make a personal attack.I was pointing out to those that posted to that point were just way offbase on their assessment and were complaining about non economic issues and had no clue.Read those posts til that time.Community Reinvestment Act. None more need be said.GOOD POST Trombones!

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