The Great American National Socialist Experiment

The Powers that Be Speak:

“The people will give 700 Billion Dollars to pay for the cheating, lying and failure of the dozen or so wealthiest men in the world!”

Want to know how it ends up? It’s been done before:

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Don’t want a “Government-Fixed” future?

Then fight the Fed Bailout. Write your Senator, Congressperson today, now. NOW!

Write ’em – NO to the Fed Bailout. YES to a moderate infusion, with strict regulation and oversight , as America moves forward into an economy of Less consumption, more Conservation, Less restrictive monopoly in major industry, and more freedom for Innovation in the design, building and implementation of the major planks of our economy.

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If it’s all above your head, then at least stop the hemorrhaging, and support Congressman Chuck Schumer’s contingency “We’ll give you enough, you greedy bastards, and we’ll see if you can manage not to f*** that up” plan.

Related:

Huffpost – Obama likes plan

Crooks and Liars – Why 700 billion!?

Schumer bailout proposal

Welcome to the Coup

Liam

8 Comments

  1. From the “George Washington” blog:

    http://georgewashington2.blogspot.com/

    Treasury Pulled the Number Out of Thin Air

    You know the $700 billion price tag of the proposed bailout? Treasury pulled that number out of thin air.

    As Forbes writes:

    In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.

    “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”

    I am For the Free Market . . . But if the Government is Going to Stick its Big Nose Into the Market, Here’s What It Should Do

    I am opposed to the bailout plan because it is socialism. It would deal a mortal blow to the free market and to the rule of law, as Paulson’s actions are unreviewable by courts. And Paulson’s plan is immoral, because its the fat cats hosing the taxpayer again.

    Moreover, it simply won’t work.

    Why not?

    Because the real crisis is the unwinding $62 trillion dollar market in credit default swaps. (See this, this, this, this and this).

    A hundred billion here or a hundred billion there – while huge sums – are dwarfed by the potential of a crashing credit default swap market, which could very well take out not only the U.S. economy, but the economies of most of the world’s developed countries.

    I think there is a powerful argument that we should let the markets sort it out for themselves.

    However, if governments are going to do anything, they should cancel all credit default swap contracts. The governments of the world should all declare that default swaps are null and void. See this.

    The basis for canceling them? Fraud, for one.

    People selling credit default swaps got fat and made billions of dollars selling something that no one understood, that no one was overseeing, and that is threatening to bring down the world economy. Indeed, a young, brand new graduate who knew nothing about the real world invented credit default swaps and talked her bosses at JP Morgan into selling them.

    And yet they were sold as a relatively safe investment, even though the companies which sold them didn’t have the assets to pay out on them. That’s fraud.

    Warren Buffet calls derivatives “weapons of mass destruction”, and they should be treated as such.

    Remember that banks and financial houses have hidden their derivatives exposure off the balance sheets. And almost no one understands derivatives:

    “Not only [world’s richest man] Warren Buffett, but Bond King Bill Gross, our Fed Chairman Ben Bernanke, the Treasury Secretary Henry Paulson and the rest of America’s leaders can’t ‘figure out'” the derivatives market.

    Indeed, the government actively helped to hide the derivatives mess since at least 2006. For example, according to Business Week:

    “President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations.”

    Again, I am for the free market and for the rule of law. But if the U.S. government is going to stick its enormous nose into the free market, the Paulson bailout plan is not what will help. The one thing the government could do is cancel credit default swaps and persuade allied governments to do the same.

    While it is solely Wall Street which would be helped by Paulson’s bailout, something that addresses the derivatives mess might help the little guy, too. Remember that Orange County, California, went bankrupt in 1994 because it had invested in bad derivatives. Indeed, I heard that a small fishing village in Norway might have to file for bankruptcy because it had bought derivatives as part of its portfolio. And the pension and retirement accounts of millions of teachers and other middle class people probably contain a lot of derivatives also.

  2. I love how you put a picture of Stalin up for this entry. I keep thinking how ironic it is that we won the Cold War, and Russia is now ‘democratic’ and capitalist, and yet the US is becoming more authoritarian and socialized.
    When the financial house of cards comes tumbling down, what’s next but serious revolution (hopefully bloodless). Not that I fully believe this, but are we just the next big loser after the Soviet Union in the ideological struggle of the century? Lose – Lose for all? Who wins – all the little guys scramble for the pieces that are left. All the debt that we forgave all these other nations in the past and shoveled mass aid their way and the bad news is they’re not so inclined to return the favor.

  3. What’s terrible is that the worst sort of ‘loony conspiratorial thinking’ is made to look somewhat predictive and correct by these last few ‘re-allocations’ of federal, judicial and economic power, owing to the many ‘inevitable terrors’ that have been promised (often by the US government) to the US citizens (often by the US Gov’t itself), unless they “ACT NOW! DON’T WAIT! YOU’LL BE SORRY! THIS IS A ONE-TIME OFFER!”

    “GET YOUR CREDIT CARD AND CALL THIS NUMBER!!!”

    The US government has become a rip-off 1-900 number, by all appearances.

    And what was Stalin? More than a rip-off artist, he was the most egregious monster of history, along with Mao, in the modern era. His machinations cost more lives than that of Hitler or Pol Pot. And he had the praise of the intellectual Left, at least for some time, (and still by some), for his “Soviet” state, his “communal” ideas of farming, and living, (and starving and dying).

    Was it Lord Acton, the historian who talked about power and corruption – and “absolute power corrupting absolutely?”

    Fight this bailout – this re-allocation of your civil rights, of institutional and personal irresponsibility, now placed firmly on your and my shoulders.

    How quickly will 700 BILLION dollars become 1 Trillion, in Government spending? 1.5 Trillion?

    None of this impacts people’s thinking – it’s all ephemeral. But the outcome of this is not – it is quite real, and it is that we, the US, becomes a debtor state to..

    to China, to Europe, to whoever can ‘lend’ us enough to pay back these thieving bastard crooks – including the too, too, too many smaller groups who leveraged nothing against infirmity to buy buy buy too too too many houses, hoping to ‘flip’ them in an ever-expanding housing market.

    And who will pay the debt? Hank Paulson, Ben Bernake? The CEOs of Merrill Lynch? AIG? Mac and May? These few of the many vacation homes and off-shore assets? (Will they put their properties in hock as collateral against their blood-chilling plan?)

    Fat bloody chance. You will. I will. We will. The aristocracy will skate clean and free, and move to Hong Kong, or wherever their currency takes them the farthest.

    What is happening is a war against individual countries – the US has been leveraging it against others, via the internationalism of ‘free trade,’ whose end of benefits, we can now see. And now, we see the lax, lazy, stupefied lot of zombies it has made us, and we cry and panic and don’t know what to do –

    And we’re waiting for these people, who have robbed and stolen and damaged, and perverted and MANIPULATED all rules of Government and commerce (as troubled as they always were), to FIX IT FOR US – BY TAKING MORE FROM US.

    Fight the bailout – it is a CAPITAL, capitol crime.

  4. Criminals:

    http://news.yahoo.com/s/ap/20080925/ap_on_bi_ge/financial_meltdown

    WASHINGTON – Warned of a possible financial panic, key Republicans and Democrats reported agreement in principle Thursday on a $700 billion bailout of the financial industry and said they would present it to the Bush administration in hopes of a vote within days.

    Emerging from a two-hour negotiating session, Sen. Chris Dodd, D-Conn., the Banking Committee chairman said, “We are very confident that we can act expeditiously.”

    “I now expect that we will indeed have a plan that can pass the House, pass the Senate (and) be signed by the president,” said Sen. Bob Bennett, R-Utah.

  5. What will happen if you don’t give all your money (to the people who’ve been stealing it from you)?

    It’ll look like 1974, or thereabouts. People will have to move out of houses that they could never afford, live with the parents, move into apartments, work double shifts, spend less, drive less, take the bus and train more.

    Many people, but not all people.

    Not every slacker highschool student will go to college. Some might actually train in a useful hands-on skill, and learn to make a good, decent, semi-honest living that way, instead of eating up 4 years of loans and parental income (both of which will never be paid back), while they ‘find themselves’, or, find themselves working in retail, (which is a capricious market to find yourself in at present).

    Almost all people will have to drive less, buy less, be less consumed with consumption, and develop a few hobbies, like reading, going to the library, and talking with other people in person, and not on earphones while they walk through Whole Foods.

    We (the commercial/industrial nation) will have to invest in Research and Development that goes to maximizing use of energy, space, and resources.

    If we don’t give every single thing we (don’t) have to these bastard crooks, we might just be able to get back down to a reasonable standard of living, with reasonable expectations, and have a better grip on our problems and the future, to boot.

    On the other hand, (and I’ll have to go with a bad-case, not worst-case scenario), if we do things the Chicken Little way (see the Congress at present), this is going to push us into being an economic slave state. There’ll be no way out of this hole but to essentially prostitute our national ownership to international buyers – China, Europe, whoever – and we’ll be working, not at our leisure, and not in “our country”, but in a privately owned, internationalist concern.

    Chin up everybody. Don’t give your hard earned money, and trust, to the very thieves who’ve been stealing from behind your back, just because they’re knocking at the front door.

  6. GOP conservatives present rescue alternative
    http://news.yahoo.com/s/ap/20080926/ap_on_go_co/bailout_alternative
    By ANDREW TAYLOR, Associated Press Writer Thu Sep 25, 11:04 PM ET

    WASHINGTON – A group of conservative Republicans in the House on Thursday proposed a financial rescue package of tax breaks and a new government-sponsored insurance program for mortgage-backed securities as an alternative to President Bush’s proposed $700 billion bailout of Wall Street.
    ADVERTISEMENT

    Instead of the government buying the toxic mortgage securities, banks, financial firms and other investors holding them would pay premiums to the Treasury to finance the insurance coverage.

    Democrats said the idea is unworkable and said Treasury Secretary Henry Paulson agreed.

    The GOP plan, said House Financial Services Committee Chairman Barney Frank, D-Mass., is “a mortgage insurance approach that Secretary Paulson said does not work.”

    The idea behind the plan is that the insurance would give investors enough confidence to buy the illiquid securities and establish a market for them.

    Rep Eric Cantor, R-Va., said the plan would be to remove the burden of the bailout from taxpayers and instead place it, over time, on Wall Street.

    “Instead of a purchase scenario where you have the government injecting $700 billion right up front into the markets, what you have here is an insurance plan,” Cantor told reporters. “In order to get this insurance, the banks with these failed assets would have to pay for the government backing, pay for the insurance.”

    The plan emerged after it became clear that House Republicans in large numbers weren’t coming around to the approach favored by Paulson, which is to have the government buy up the troubled securities, hold them and eventually sell them off.

    Under the House conservatives’ plan, institutions holding stronger assets would pay lower premiums for the government backing; higher-risk securities would require higher premiums.

    Robert Litan, an expert on banking and finance at the Brookings Institution, called the framework unworkable, saying it would not achieve the basic goal of creating a market — and establishing prices — for mortgage securities no one’s willing to buy.

    “Everything depends on how you value the security,” Litan said. “If you do the deposit insurance scheme, there’s nobody out there to know what the right price is.”

    The House conservatives’ plan also would:

    _Offer temporary tax relief to free up capital for companies to lend one another.

    _Temporarily suspend dividend payments by financial institutions.

    _Require participating firms to disclose to the Treasury Department the value of mortgage assets on their books, private bids on them in the past year and their last audit reports.

    _Forbid government-sponsored mortgage giants Fannie Mae and Freddie Mac from issuing securities on unsound mortgages.

    _Require the Securities and Exchange Commission to investigate the performance of credit-rating agencies.

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