Several threads showed people asking for a dedicated thread on the economic crisis we are in. Bear Sterns is gone. Lehman Brothers is gone. AIG was saved. Who will be left standing? Will CEOs keep bringing in their huge 20 million dollar salaries on your tax dollar? Are people profiting on the losses of others?
What happens if the government does nothing? Is the Senate mistreating public servants like Treasury Secretary Henry Paulson or Federal Reserve Chairman Ben Bernanke? Does the Senate not get it or are they just grand-standing for political reasons?
You asked for it, you got it. All Pearls of wisdom go here.
Have you heard, they’ve added car loans, credit card debt, and student loans to the bad debt we might have to pay for in this package. Think it will stay at 700 billion?
This whole thing reminds me of the way Bush and McCain sold us the Iraq War.
LYING Iraq attacked us on 9/11, turned out to be B.S.
LYING that the Anthrax attacks were coming from Iraq, turned out to be B.S.
LYING that Iraq had W.M.D.’s ready to float on unmanned planes to the Atlantic seaboard, turned out to be B.S.
LYING that the war would pay for itself, turned out to be B.S.
LYING that if we didn’t rush into the war RIGHT NOW without deliberation, the “smoking gun would be a mushroom cloud.” B…Fricken…S!!!!!!!!!
So now they are lying that if we don’t rush into this buy out without deliberation we face an economic meltdown. I’d like to know what they base that on. They want a blank check for 700 BILLION or more, with no oversight, no court can even look at what they do, Congress gives up any authority, money gets siphoned off from the taxpayer and given to the same corporate pigs who put us in that situation in the first place.
Look, if we’re going to make the primary marker of the Bush/McCain economic philosophy ripping off today’s taxpayer to enrich the fat cats TODAY, and ripping off tomorrow’s taxpayer (our children) to fix the mess they’ve created out of our economy, then we as taxpayers should get something in return.
We should have an equity stake in the companies we buy, so that when they become profitable again, they are not making some fat cat fatter, but paying down the enormous national debt that the Bush/McCain economic and foreign policy disasters have inflicted on this country.
I remember Barack Obama said of the Iraq War: “There are only so many ways to get a bus out of a ditch.” The problem with Iraq was we never should have driven the bus in the ditch in the first place. There we can disagree. What to do about Iraq is another matter, where there is less room to disagree because there ARE only so many ways to get a bus out of ditch.
This economic crisis is the same. We have to give in to this bailout because there are only so many ways to avoid another Great Depression.
OMG…Im gonna say it….wait for it…wait for it……..
I agree NGL!!!! Whoohoo…Think Im gonna copy this post and save it for another post on this very question, but I will give ya kuddos when the time comes….promise!
Who got rich off of the Iraq War? Halliburton, Big Oil, the war profiteers, all the lobbying interests that run McCain’s campaign and would run his cabinet if he were elected.
Who got rich of the deregulation of big banks and the home loan industry? Right again, the same corporate pigs and corporate lobbyists who’s interests dominate the McCain economic policy, WHY, because McCain’s economic policy was written by the guy who called us “whiners” for complaining about deregulation, loss of jobs, slumping economy, our wages buying less for the dollar. His name is Phil Graham and he is the author of McCain’s economic policy, and in his career as a lobbyist/Senator for corporate interests, he is the one person MOST responsible for the market meltdown we are now facing.
Now the Bush/McCain plan is to put the taxpayers on the hook for the golden parachutes to make sure the same fat cats who ripped us off for the past 8 years rip us off again while we try to fix the mess that came as a result.
I AM SO PISSED OFF!
But less so because Just Cause agrees with me (=
Thank you, Just Cause. I feel less alone. I’ll turn off my oven.
The non politicals went to Bush and told him he had to do something. I feel this economic situation is very serious. I don’t think it is crying wolf like the other times.
Here’s another way to look at it? Do you want to risk it?
If you have paid attention to the stock market, it is critical. It goes much deeper than that. It all goes to the housing market. That has to be fixed. Until that is fixed, credit will totally dry up. Right now businesses are relying on loans to make payrolls in some cases. More foreclosures, the worse things get.
I don’t want to risk it. I also don’t trust the senators not to posture and politic.
Just Cause,
I know how you feel because I ended up agreeing with SecondAlamo last night. Who ever thought that could happen?
And thanks Moon-howler for the topic thread!
Moon-howler, I’m not saying let’s not do it. I’m just angry that McCain and Graham’s “deregulation and trickle down” theory was allowed to wreak havoc on our economy to the point where we’re FORCED to do this. And if we are doing it, I want to get something in return. It just seems like the whole tax base is one big feeding frenzy for special interests, and every big decision they make, from what country to invade to what sector of the market to buy out, is based on nothing but mega-profits for people who are ALREADY mega-rich.
But watch it with that “do we want to take the risk” business because it sounds an awful lot like the last time we let fear sucker us into a hundred billion dollar rip off, it had something to do with a smoking gun turning into a mushroom cloud.
Ugh, I said it better earlier.
Ah…..a more peaceful world here on Anti-BVBL. Breathe the sweet air of agreement….and unfortunately, probable global poverty, but hey.
Can anyone explain in real terms how adding another 700 billion to the national debt is going to affect us? I’ve watched the debt go up and down over the past two Presidencies. It was a psychological weight off my mind, I guess, to pay down the debt under Clinton, but what is the actual benefit to the nation?
What’s better about less debt? What’s worse about more debt?
Well ShellyB, there’s the little matter of hyperinflation if the debt goes high enough. What the “debt” actually means is that the Fed is printing money that has nothing to back it up, which means that eventually the dollar will be totally worthless. There’s also the matter of trade deficits which allow foreign countries to “own” our country. China alone already holds more than $1TRILLION in Treasury Notes. Imagine…and people got upset when our total debt broke $1Trillion back in the 80’s. More debt is VERY BAD.
Also, we have to pay the interest on the debt. So if the debt is so many trillion, we are actually borrowing MORE money to pay the interest on the debt which is millions. All of this can be fixed in the long term if we find a way to put America on the cutting edge of the new global economy. We can’t get left in the dust by Europe and Asian countries developing alternative energy innovations just because Big Oil and the auto industry aren’t ready to let go of some of their fat cat profits.
If America develops the best new innovations on cleaner burning fuels, and becomes the world leader in this technology, we’ll have buyers all over the world and our economy can boom like it never has before. This would allow us to pay off the debt AND the interest on the debt and reverse global warming in the process. That in a nutshell is how I understand Obama’s plan for the 21st century.
And that is why I feel we cannot afford to stick with McCain, Big Oil, trickle down, deregulation and all the 20th century relics that put us in this predicament.
McCain suspends campaigning to deal with this issue. And the President of Iran is predicting the end of the American Empire.
Did anyone see the press conference Barack Obama held after McCain cam out with his statement? Lovely that Obama called McCain to suggest a joint statement (which was apparently agreed upon by McCain) about this issue, and then McCain went ahead and released his own statement without getting back to Obama.
I agree with Barack…they can deal with the issue, and still fly back and have a debate. America needs to hear what these dudes plan on doing about this mess if they are elected.
Deregulation is not so much the problem, NGL, as is a lack of research and development in industry. Innovation has most often come from small business that, out of necessity, must think outside of the box in order to compete in the market place, or from that creative individual tinkering in his garage. Today’s financial environment does not lend itself to the success of either of these enterprises. Multi-national corporations consider innovation to revolve around cheap labor created by depressing wages, outsourcing, and off-shore manufacturing bolstered by Free Trade Agreements/Areas and a consumer public that has been brainwashed to think in terms of built-in obsolescence (cheap) rather than quality and true innovation. It’s virtually impossible for the beginner entrepreneur to compete under those conditions so they most often get gobbled up by the bigger fish in the pond…or go broke. Of course, should the big boys “screw the pooch,” so to speak, the government is right there to bail them out on the backs of the taxpayer (welcome to the era of the corporate welfare state).
Furthermore, just as our government has become loathe to enforce any existing laws which might interfere with profits, the Sherman Anti-Trust Act has also fallen by the wayside which, at one time, had protected small business from the greedy robber barons. We are no longer a nation of laws…at least not those that are equally enforced. Then, if that doesn’t work, the Executive Branch works out some new laws to benefit big business America which they then fast-track through Congress (for those unfamiliar with this new concept, that’s when Congress is told that this is emergency legislation, such as Free Trade Agreements, which MUST be passed immediately for a multitude of reasons and that it is unnecessary to read or understand them…and Congress buys it). “Security” bills actually go to Congress redacted, what with the dangerous world in which we now live. We wouldn’t want to hold up progress with such mundane matters as Checks and Balances, now would we?
Anyway NGL, I think you get the gist of it.
Sallie Mae is one of the most popular and local predatory student loan giants. Some information on the bailout and student loans from Student Loan Justice:
The SEC recently put Sallie Mae on the list of companies that cannot legally be “shorted” by investors. This means, clearly, that Sallie Mae, and probably other student loan companies will be attempting to take part in the bailout. In other words, they will be expecting to be paid for bad private student loans that they made. It is important for you all to understand what brought us to this point. I particularly hope that members of the media receiving this email will pay particular attention to this. It is critically important that they get the story right:
The student loan industry lobbied heavily to have bankruptcy
protections removed for private loans in 2005, and then proceeded to make huge loans at credit card-like interest rates. It comes as no surprise to anyone intimately familiar with the private loan industry that many of these loans are now defaulting.
If the federal government does decide to purchase these loans, it should be at a deep, deep discount (ie. principal only), and the borrowers should not be reponsible for repaying more than the government paid for these loans, ultimately.
Standard consumer protections must be returned to ALL student loans.
–Alan Collinge
Oh, and last night, the house passed a $25 billion bailout package for the big three auto makers without batting an eye. So instead of having the automakers build cars people want to buy and compete, let’s just subsidize them with 25 billion! I’m getting sick to my stomach with almost ALL our federal government.
When did Paulson and Bernanke realize the serverity of the problems on Wall Street – if it was three weeks ago, when I found out about it, then there is a problem there.
Just give 700 Billion dollars to the same people who have mismanaged the situation to get into the mess we are in – yeah right. And with no repercussions, no discussion.
And John McCain said all the fundamentals are strong.
Slowpoke,
“I’m getting sick to my stomach with almost ALL our federal government”
As you should. WHAT HAPPENED?…scratch that, why did WE ( the people) let it happen?
http://www.youtube.com/watch?v=yLt7clQbBzo
Pat,
Funny or NOT, Ron Paul has been warning us all along!
Bush is on TV now…does he REALLY believe that the American people are as stupid as he’s suggesting in his sales pitch??…Or is HE?
AwCheney,
I don’t think he is STUPID. I think he( an others) is STRATEGIC.
So what do we do? Do we wait for it all to come tumbling down around us?
I feel this is very real.
Moon-howler,
Honestly, I think it has already been decided and we can NOT do anything about it.
They have us by the boo boo. It is scary BUT I do NOT for ONE second buy into we didn’t see the truck coming BS!
Excellent topic Moonhowler, its about time a topic like this was debated.
My own views on why we are in this situation.
1. We allowed lobbiests on both parties to advocate for “creative financing” legislation to enable investment bankers and banks to step outside of thier traditional function, create and engage in new derivative markets that promised risky, but higher yields (in a strong economy situatin only), so they could feel like they were not left out of the last decade of rapid economic growth in the rapidly growing “credit” market.
2. We allowed legislators and congressmen to remain oblivious of the impact of profitable, but risky credit market concepts to go unregulated, unnoticed and unchalleged by appropriate market oversight agencies, not where these oversight responsibilities coordinated.
3. The president and chief financial advisors were asleep at the wheel, on the root causes of the mortgage and foreclosure crisis, i.e a rapid increase in population of illegals into the country, a rapid increase in legals of common ethnicity desiring to make enormous profits taking advantage of common ethnicities by selling credit concepts and loans to people who were of high risk, primarily of thier own ethnicity, and to individuals who would not normally qualify for such loans and who in large numbers, falsified typical mortgage documents in order to purchase homes. When after a period of time, they could not afford an increase in ARM payments at a later increase in market rates, they justified continued sales and purchases, by hoping either to leave the community, sell, remain anonymous, or otherwise walk away from any responsibility for those loans they were obligated to pay if they should get into financial trouble.
4. Credible banking and mortgage companies (Freddie MAC, Fannie May, bought packaged loans in large investment banking volumes, from these ethnic centric fly-by-night new mortgage company and brokerage company startups, without any knowledge of the underlying risk, or lack of verifiable truth in lending documentation, and truth in reporting documentation, thus buying loans of extremely high risk, when they thought the risk was less than it actually was as a result of misleading documentation and proliferation of illegal mortgage lending practices.
5. These initial credit lending companies, washed their hands of the risk, took huge profits and stuck the “risk” bill to government sponsored lending institutions and investment banking knowing their illegal practices and ethnic centric preferences would go un0noticed.
6. When homeowners (both illegal and legal) defaulted in mass on home mortages they were not realy qualified for, the failure to pay caused huge losses on the books of these financial institutions, who were already “over-leveraged” themselves (without sufficient and mandatory federal reserve banking laws requiring reserves on these risky loans, nor FDIC insurance on such risky loans, saw an almost overnight decline in the worth of these securities as “commodities and derivative paper” investment brokers made legal and illegal “short sales” to create a massive profit taking swing in a market with no solid foundation underwriting these derivatives, that got out of oversight control.
7. Individual non-institutional investors, realizing the government had allowed creative derivatives to skirt laws and oversight, panicked and begin removing thier personal IRA and 401K investments and stocks to safer T-Bills and other government protected (FDIC) insured safe havens. As more and more people caught on to reality, the market collapsed.
8. The bailout is not going to work in the long run, because the taxpayer debt (1 Trillion dollars), will not allow a quick correction, will not put security back into an insecure market, will not protect long term savings (unless you can ride out a huge loss for 10 years), and will not change the law to prosecute both the illegal lenders of such credit, and the buyers of credit (these individuals are the high risk loan takers who only marginally and in many cases illegally qualified for these expensive, high risk loans in the first place).
9. Put your money in the safest place you can put it for the next 10 years, until congress changes the law and stops high risk, loan shark mentality, illegal credit documentation practices and creative derivative contracting and financing.
10. Insist that those who created this crisis (the loaners and the borrowers who defaulted), are punished so it does not happen again.
What Bush proposed this evening is re-inflating the real estate bubble to incredible proportions (anybody hear the POP!!!); putting the entire banking system of this country under the control of the Federal Reserve…which created this problem in the first place (artificially depressed interest rates, disregard of fraudulent banking/mortgage policies and practices, AND ORDERING THE PRINTING OF MONEY LIKE THERE IS NO END TO IT!); and putting the same people in charge of the companies that brought them down in the first place, with merely a cap on their salaries (probably at current level with bonus)!!
If every voter in this country doesn’t get on the phone first thing in the morning and tell their elected officials that, if they vote for this atrocity, they will send their kids to them to raise because nobody will be able to afford to feed them if this passes, THEY’RE AS CRAZY AS BUSH!!!!!
Excellent comments AWCheney. I agree…
The bailout will work only in the short term, but not in the long term in my opinion.
People took too much profit, and borrowers went into too much debt. That has to correct itself over the next 5-10 years (either recession or depression, it remains to be seen). Save your cash….
I too have always felt bush was an idiot, certainly in the last 4 years…he has done nothing to secure this country internally…externally he did what he was advised to do, whether that was necessary only history can tell.
Oh yeah, I almost forgot the WORST of it…he’s doing this so that everyone can borrow more and more money. He said it AT LEAST four times before I tuned out! I’ve been predicting that the economy is going to go into a free fall for quite some time, and the resulting depression will make the Great Depression look like a picnic in the park…this should accelerate that nicely.
Michael,
If we save our cash, what is that gonna be worth? The dollar is history, one way or another.
AWCheney,
Agree 100%, what the old saying…..”insanity is doing the same thing and expecting different results.”
I don’t want the economy to be desimated, but nor do I believe that fear should be used to determine the best long term course of action to deal with this crisis…the whole cooler heads should prevail mentality. I just feel sick to my stomach when I look at the future my children are inheriting. I think AWCheney is right, we should call our elected officials in congress and say “ENOUGH IS ENOUGH.”
Cash can exist in many forms, also capital that can be “liquid”. Look to the techniques that saved many in the great depression from losing everything. I would recommend everyone read history “now”, as I have been saying many times, the lessons of law and why we have law are a result of the failures of the past. History repeats itself if you do not pay attention to law, even financial law. When you stop enforcing it (like enforcing illegal immigration law for example), something always breaks in a bad way and affects the majority of people who follow laws, by the immorality of “individual people” who creatively and politically circumvent the law. In this case it was mortgage and credit law that was broken, circumvented and “creatively dodged”.
Congress can do very little about it now except enforce the existing law, and creating new law that will hold those accountable who broke it, or side stepped it, and by making them pay (not us taxpayers) for the damage it has caused to the majority of people in this country.
You can find contact information at the links below. We must contact our elected officials at once.
http://www.senate.gov/general/contact_information/senators_cfm.cfm
http://www.congress.org/congressorg/directory/congdir.tt
I have heard lots about what is wrong…I have heard nothing about what we should do. I would like to get the economists involved and the politicians uninvolved.
I am not going to be calling anyone because I have enough sense to know how very little I know about economics. Our politicians need to be listening to the people who understand not only the American economy but also international economics. They need to listen to people who know concepts beyond the next campaign contribution.
I have heard more stupid statements on tv today, from congressmen, senators, news commentators, and call ins. A few of the senators get it. Senator Sununu seemed to be all over this problem. He was most impressive. I am going to listen to the experts not the politicians. (or the bloggers)
Michael, you say to put money in the safest place. What would you say that was?
Chris, and what will we tell them? Who here on this blog knows enough about what is really going on economically in this country? Who sees the big picture? It scares me to think that congress is going to bow and scrape to get re-elected also.
MH-
I can not and would not tell anyone what to tell them as you ask. If you have strong feelings one way or the other then call and voice your opinion. I’m sorry I don’t have answers to all of your questions. I was merely giving people the links for contact information. There must comprise with the crisis like all others. Can this happen?
With regards to re-elections. Will this be the next platform for candidates?
Even if you know nothing about economics, Moon-howler, you must see the total irrationality of continuing the very cycle which got us to this point in the first place…the only difference being we’re pouring at least $700 Billion taxpayer dollars into a black hole. I know you won’t listen to me, but perhaps you’ll listen to Elena ( Elena, 24. September 2008, 22:03, AWCheney, Agree 100%, what the old saying…..”insanity is doing the same thing and expecting different results.”). No matter how you cut it, Bush’s plan is a disaster in the making, no surprise to me.
The fact is, there is only ONE way to reset the economy and that is to let nature take its course. The unfortunate thing is, because the Fed forced the economy into an abnormally HIGH peak, ultimately the valley will lead straight down to Hell if those policies continue. There WILL be a depression…the only question is, just how bad will it be? The companies whose greed precipitated this artificial economy MUST live or die by their own will; the foolish people who saw an opportunity to buy more house than they could reasonably afford have made their bed, and better move to more affordable digs; those who refinanced at unnatural home values with sub-prime or variable rates must pay for their greed (guess what, LOTS of people had more sense than that, including us and, I suspect, others on this blog) because the interest rates MUST go up and the home values MUST go down to normal market levels in order to reset the economy.
EVERYBODY in this country has too much debt, particularly the government (which, btw, means us, because THAT debt is coming out of the taxpayer’s pocket for many generations). So, what does Bush says…this bailout is so that we can borrow, borrow, borrow (I swear it was more than 4 times…like trying to subliminally instill the concept in our brains). The LAST thing that the consumer, the government, or the economy needs is more debt! Listening to the nonsense Bush was spouting, I was so angry I was shaking. He actually managed to confirm ALL my theories about him in that one speech.
Somehow I lost a sentence at the beginning of the second paragraph necessary to its meaning (I really need to proofread):
The fact is, there is only ONE way to reset the economy, and that is to let nature take its course. [add] If you look at economic history, you’ll see that our economy goes through, ideally, a series of gradual peaks and valleys, unless there are extraneous forces at work (like war, famine, disaster, etc.).
AWCheney, why would you assume I wouldn’t listen to you? Have I said something to you indicating that? Actually I would probably not listen to you or Elena on this subject. I also probably wouldn’t listen to a politician. I would probably listen to a collection of economists.
I see our economy as being in very serious trouble. I don’t want to bail anyone out. I do want to prevent a depression, which I believe can be done. Much has changed since the Great Depression as far as our position in the global economy. We cannot sit back and let the chips fall where they may. That upsets the balance of things way too much.
You are right, I am not an economist. Nor am I am neanderthal about finance, although this week has left me feeling like one. I don’t have magic wand answers. I was interested in other people’s opinions and interested in what they would ask their elected officials to do.
However, I am at times, intuitive. I understand the look various leaders get when we are teetering on the eve of destruction. We are there, from the look in the eyes.
OK Moon-howler, then check out the link that I posted on another thread for Just Cause. It has links to credible information, as well as an excellent video interview of a very successful and well-respected financial expert which might give you some insight into this, and what you can do as an individual to protect yourself:
http://scheney.wordpress.com/2008/07/16/north-american-union-part-3-the-amero/#comments
History repeats itself, we all get screwed as usual. The two parties are both thoroughly corrupt.
The bailout is probably a good idea IF we put REAL STRINGENT CONDITIONS on the scumbags for the future.
I look forward to the story of home loans for illegal aliens eventually working its way up to public consciousness – it had something to do with this.
I did like Bush’s little speech. I like that he actually seems to understand that he MESSED UP in such a HUGE way, that his world view was so OFF.
[email protected]
No Blank Check for White Collar Criminals!
Dear Mr. Fimian:
I heard your debate at the Committee 100 meeting in Montclair this month.
I have been fighting a student loan and fraud college for eight years and now Congress is asking me to bail out these banks that contribute to the system PLUS pay for illegal loans this school/lender made (Sallie Mae and Union Institute)? NO! How dare anyone ask me to pay twice because these bankers and colleges are criminal?
Send the CEO’s to jail and urge Congress to get their oversight together! Do not give these banks a blank slate. We want our money BACK for this crime against our country.
Katherine Mercurio Gotthardt
luxuriouschoices.net
I thought Bush’s speech was well-written, and he read it without messing up. I doubt he understands the situation as well as his handlers do.
AWC, you have me frightened now instead of angry. But at least now the fear card is played on both sides.
AWC, Thanks I will check it out. Glad it wasn’t something I said.
NGL, He doesn’t have to understand it. He just needs to call on people who do understand it. He needs to unite and let the economists handle the plan and the senators pass legislation that has the necessary components. I sure don’t want most of the senate thinking.
It sounds like a tentative agreement has been reached in the senate, according to Senator Chris Dodd. The markets are reacting well to the progress being made. In fact, the bulls are charging. It is about time.