‘You Must Hate Your Neighbor As Yourself’
I just found out that my home, conservatively speaking, depreciated 16.4 percent and the Republican’s are responsible. That’s a lot of money flat gone in one year!
Not only that but the dirty b******’s are fighting the stimulus package that’s preconditioned on more political smoke-blowing double-talk rather than enforce the law. Talk about a pack of mongrel dogs!
Report: $9.7 Trillion Government Tab in Financial Crisis
Bloomberg News estimates the economic stimulus package would raise the government tab in addressing the financial crisis to $9.7 trillion. In addition to the Wall Street bailout and the current stimulus plan, the US government is believed to have lent or spent more than $8 trillion through the Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation. The $9.7 trillion figure would nearly be enough to pay off every mortgage in the nation.
This is what we can look forward to according to this economist and professor of public affairs at the University of Texas:
JAMES GALBRAITH: The stimulus package is a very good bill, and it should pass. It will not, by itself, deal with the economic crisis that we’re in. I think we should be very clear about that. Expectations for an early turnaround should not be—you know, should not be very high. A clear—a major problem that we face is that the stimulus package is sized so that it will work only if the revival of credit, which is part of the plan that the Treasury is announcing today, also works. And the problem is that that plan is still, I think, not well designed and is not likely to succeed. I think it actually, in many ways, misconceives the nature of the credit problem that we have, and therefore is very unlikely to succeed at bringing about an early revival of credit markets, of housing markets, of consumer credit markets, automobile loans, and the rest. Now, we could talk about that, but I think it’s very important to understand that this spending package is really geared to the success of this other piece, and this other piece is much more problematic than the spending package is.
What should happen today, BUT probably won’t:
JAMES GALBRAITH: Well, the crucial question is, on what terms does the Treasury plan to guarantee or to repurchase or to otherwise deal with the bad assets that the banks have? These assets are mortgage-backed securities. They are securities derived from subprime loans that were made in an atmosphere of regulatory laxness and complicity and fraud, basically, during the Bush administration, which came to take over the system of housing finance and to infect it with assets which nobody trusts, which nobody can value. And nobody really knows what’s in the files, what’s on the loan tapes of those—that underlie those securities. So the question that I think we need to ask is, before we issue a public guarantee, does the Treasury of the United States plan to conduct a meticulous audit of the assets that underlie the securities that they’re expecting to take off the banks’ books, so that we, the taxpayer, can have an idea of what, if anything, these securities are worth?
And the problem is that when you—the little bit of checking that has been done appears to reveal that a very large fraction of these securities contain, on the face of it, misrepresentation or fraud in the files. And so, we are looking at an asset which nobody, no outside investor doing due diligence on behalf of a client for whom they have some responsibility, would touch. And that is the issue. That’s the problem.
If that is indeed the case, then I think it’s fair to conclude that the large banks, which the Treasury is trying very hard to protect, cannot in fact be protected, that they are in fact insolvent, and that the proper approach for dealing with them is for the Federal Deposit Insurance Corporation to move in and take the steps that the FDIC normally takes when dealing with insolvent banks.
And the sooner that you get to that and the sooner that you take these steps, which every administration, including the Bush administration, actually took in certain cases—replacing the management, making the risk capital take the first loss, reorganizing the institution, guaranteeing the deposits so that there isn’t a run, reopening the bank under new management so that it can begin to function again as it should have all along as a normal bank—the sooner you get to that, the more quickly you’ll work through the crisis.
The more you delay and the more you try to essentially prop up an institution whose books have already been poisoned, in effect, by this—the practices of the past few years, the longer it will take before the credit markets begin to function again. And as I said before, the functioning of the credit markets is absolutely essential to the success of the larger package, of the stimulus package and everything else, in beginning to revive the economy.
Maybe I can’t do anything about President Obama’s gutless inability to hold George Bush, his people, and the banks accountable for their crimes, but I certainly can those that I know were responsible for installing and supporting that rogue regime for the past decade. I can show them how the Second Commandment works.
New Class of Ruling Elite To Hate
Not much hope in this “no-plan”:
MICHAEL HUDSON: (Obama recover plan is no good.) Because it’s not leading to recovery at all. It’s now up to $12 trillion. It’s a giveaway to the banks, to the creditors, without a single penny for actual debt reduction. And I had thought that at least half a percentage point, $50 billion, was going to be to write down troubled mortgage debtors, but it turns out that not a penny of mortgage debt is going to be written down. When the banks have lent more money than a mortgage owes, with 38 percent, the government is going to create its own debt to come in and make up the difference, so the debt is going to continue to grow exponentially, and it’s way beyond the ability of the economy to pay. If people have to pay the amount of debt that they have now, there won’t be any money to buy goods and services, companies will not sell as much, they’ll invest less, they’ll hire less, and they’ll continue to downsize.
And what’s happened is that this is the greatest transfer of wealth really in American history. It’s doubled the American debt. The closest parallel I can think of is William the Conqueror’s conquest of England. He came with a military band, conquered the land and imposed taxes over the whole land, basing it all on the Domesday Book, what—the rent could be squeezed out. In this case, the rip-off has been non-military. The bankers have done insider dealing to get the government to give them or guarantee them $12 trillion of bad loans they’ve made, many of them fraudulent.
And then they’re trying to blame the poor for all this, as if the poor are somehow exploiting the rich by taking out more loans than they can pay. Yesterday, Senator McCain said—he warned that all of this debt was going to be paid by the future generation, and we’re exploiting them. But that’s not how to think of it at all. When you have a debt that goes to a future generation, you have taxpayers paying to bondholders, just like in the nineteenth century you had the western states paying to the eastern states. So what you’ve done is given $12 trillion to the richest one percent—or ten percent of the population, and you’ve indebted the economy and the government to them for the next hundred years. You’ve created a new class of ruling families. –Updated February 13, 2009