The economic meltdown brought a major dilemma to most sectors of the economy. Government and some private companies keep on alleviating the dilemma through an economic recovery program that will stabilize the financial system. Believe it or not, restaurants do, even though they've been quietly ignored, unlike Wall Street. Standard & Poor, the rating agency, has singled out some franchises with financial issues. Perkins Restaurants has lost almost $10 million since 2008, and have stopped all plans for expansion. Other chains that are suffering include Sbarros, the popular pizza chain mostly in malls, and Kripsy Kreme has had trouble since 2005, and has had numerous restructurings to return to profitability. As a discretionary expense, restaurants are one of the things people cut back on, and many chains need some debt relief.
The financial systems of the western world periodically work themselves into a corner that results in a governmental bailout. The net result is usually higher taxes. If congress has the gonads they should make the higher earning persons and corporations pay a substantial increase in their tax rate, since they have to loose and are the primary benefactors of the bailout. Solutions of this sort have taken place since the 1400's in Italy, Holland, France, England, the US and other countries.
Less than two years ago I recall record bonuses being paid to many of the brokers and CEOs of the same companies that are now going broke or are in need of government bailout. Where is all that money now? If they got to reap the rewards of high profits from the financial securities they sold, should they not also suffer the consequences related to the collapse of these same financial securities? The stock market is really legalized gambling - there is no guarantee an investor will make money. Just as there is no guarantee I will win Powerball. So can I have all the money I put into Powerball given back to me? Hell, I'll take 40 cents on the dollar...
Mr. Bush, Mr. Paulson & Congress,
This is your boss; I am giving you a directive to not rush into voting on the pending legislation for the Wall Street bailout. I will need to look over the full and complete documentation before it is voted on.
The decision made on this is too important to allow for hast on this matter, and it is in my and every other Americans interest to be certain of all the repercussions of this decision. The future of this Nation is more important than the matter at hand, and to rely on the acceptance of Americans to blindly allow for this to pass without being given the chance to evaluate all of the ramifications is unacceptable.
Therefore, this vote will not be taken at this time! If you need to postpone your legislative recess to accomplish our demands; so be it. We will not allow for another disaster to be piled onto another disaster.
Thank you for your cooperation.
Signed, The American Taxpayer
5901 SW Huddleson St.
I say let those who benefited from the gambling machine called "investment firms" such as Goldman Sacks and Morgan Stanley, should foot the bail-out bill. These 2 institutions will be the primary recipients of this "bail out". (By the way, Treasury Secretary Paulson was CEO of Goldman Sacks for 16 y, and was paid about $6.4 million/yr. He had $632 million in Goldman Sacks stocks. The British paper, "The Guardian", in 2006 published an article which stated that the average salary of all employees, including secretaries, was $521,000/y.) This is an outrage! Predatory capitalists demand that they have no oversight or regulations on their business. They champion the "free market" when they stand to make money. Profit is privatized. But when they stand to lose money, suddenly they want socialism. They want us to take the loss, while they take the profit.
Hoover tried this tactic in 1931, and it failed. Only in 1935, when FDR poured money into the working infrastructure of the US, did our economy start to recover. A primary reason for this disaster is the undoing of the very laws that FDR created - to prevent financial institutions from creating this type of situation. An article at EconomicPopulist.org has an article entitled, "People Are Asking the Wrong Question." In the article, the author cites eerily similar similar situations in the past, which failed.
As Sen. Bernie Sanders has said, "If it's too big to fail, then it shouldn't exist." Rather than "bail out" rich investors, we need a totally different approach. One which builds the infrastructure of the US from the ground up, not the top down. Something akin to the WWII effort that turned our nation in 1 year's time, could be applied to the manufacture of renewable energy technology and tools in the US.
If the American taxpayer is to foot this bill, which undoubtedly we will, regardless of our wishes, then we damn well better pay the price for the assets are actually worth. And we had better have equity payouts. All current managers should be fired. But better yet, I like Sen. Bernie Sanders idea - a 10% tax on anyone with an income of more than $500,000 - that would easily pay this bill.
Paulson says that it is imperative that the taxpayer buy all illiquid assets, not just bad paper owned by failing institutions. This means that profitable, healthy banks and other financial services will have a huge new market for their mortgages and other securities, which they will be able to sell for more than the market currently believes they're worth. This sounds fishy to me.
Also, there is no limit on the types of assets that the new program can buy, so the people running the program can decide for themselves if student loans, credit card debt and other assets are currently illiquid, and then make an offer to buy them. This sounds like an enormous early Christmas present to the banks and Wall Street.
Bernanke & Paulson are testifying about "Toxic Debt", does that remind anyone of Colin Powell holding up that little vial at the UN and testifying about WMDs in Iraq?
Same Bush/Cheney Administration, same type of fear-mongering testimony; and boy does it set off the same type of alarm bells I got from listening to and reading the body language and watching the emotional expressions of Colin Powell, these people simply cannot be trusted!
So let me get this straight: We don't have enough money to built decent schools, formulate a humane [federal] health care plan, make college cheap, or make sure adults who're able to work CAN work... but we have all these TRILLIONS of dollars for wars/invasions, prisons, & now to bail out all these investment funds.
Anytime someone even mentions "universal health care", the right-wing idiots scream "SOCIALIZED MEDICINE"! Soo many morons in this country get all paranoid about socialism being such a threat - but corperate socialism for big banks, morgage companies, & investment firms is perfectly fine. The silence from the right seems deafening.
People in other, more civilized countries have taken to the streets by the tens of thousands over less than this; are we really going to let the SOBs keep doing this to us?!
After WW2 Germany did a very wise thing, they outlawed the politics that destroyed their country, they outlawed Nazism.
I think that Americans really ought to seriously consider outlawing the politics that have done so much to destroy the United States, we ought to outlaw Conservatism and Free-Market Libertarianism.
Conservatism and Free-Market Libertarianism is and has been a very real threat to the rest of the world and I'd bet that they would agree that it should no longer be allowed.
Unfortunately, this would also turn the US into a dictatorship, without the protections of the Bill of Rights. As Barack says, many policies built around good intentions end up having bad consequences. I may be a liberal, but I wouldn't want to live in the America this idea would create.
If the taxpayers are expected to bail out the same banks and high finance firms which caused this economic disaster in the first place, then there must be a number of major caveats:
1. the CDO's & other securities must be purchased by the government for LESS THAN their so called book value;
2. the taxpayers must receive equity in the companies that require rescue;
3. the bailout must be administered with a high degree of Congressional and judicial oversight;
4. the dismissed CEO's of failed companies that had to be rescued must be prevented from leaving with a "golden parachute";
5. and this whole incident must be followed by a series of legislative bills enacting much, much stricter regulation of our entire financial system.
If the banks do not accept these caveats then they should not be rescued.
The ideology of the free market has clearly failed when the taxpayers are asked to rescue the banks. The answer is regulation: the rule of law, which banks are not above.
May I suggest a sixth? Taxpayers get to borrow the corporate jet for overseas "mental health" days and we get to use the CEO gym and shower facilities (by appointment only, of course).
May I suggest a seventh? Since the mortgage foreclosures are the basic problem, skip the bailout completely and pass immediate legislation that would prevent foreclosures. Another poster suggested a system that would work, and I would vote for it. I wouldn't vote for the bailout plan, if anyone ever gave me the opportunity.
However, there are a lot of people in foreclosure that, well, deserve it. They were speculating in houses. They got themselves into things like Pay Option ARMs and other negatively amortizing loans. It's tough to argue that these people are "homeowners" - they have 0 equity in the home (in many cases they have negative equity).
The other implication of the government stopping foreclosures, is that it will dry up all mortgage money immediately- would you loan money to someone if you couldn't foreclose on the asset used as collateral for the loan?
The bigger they are the harder they fall.
No bailout. Period. Not one red cent for bankers and speculators who made stupid bets over the last few years. It's immoral to make our children and our grandchildren pay for the idiocy that reigned on Wall St. and Main St. over the last several years.
Hank Paulson has a lot of nerve threatening us with a recession if we don't give him and his rich buddies what they want (and telling us that he does not want any oversight from the courts). I say we call his bluff and let the chips fall where they may. Let the bankers go bankrupt. Let the economy go into recession - that's a normal part of the business cycle, why are we so afraid of having a recession? Recessions teach people valuable lessons like the importance of living within their means and avoiding debt. We'll have a few rough years economically, and during that time people will have more time to enjoy the simple things of life like family and nature. After that the economy will recover and be stronger than it would have been if we were shackled to this bailout debt.
If this "No Banker Left Behind" bill does pass, then I think the best course of action would be a general strike. Let's do like the French do and bring the country to a standstill. They're wanting us to pay for their mess, but we won't be paying if we're not working. If congress would rather listen to the big money interests then let's not cooperate.
http://fedupusa.org/ is a great source of info about this con job.
Wall Street is like a crackhead uncle who has been high for several days and comes to you for "rent" money. But you know your paycheck will go straight into his veins; a fiend wants only keep from crashing. Do you give it to him? Hell no. He shouldn't have gotten spun in the first place. You don't support his addiction or his greed that feeds it.
Where did Wall Street lose the $700B they want from us taxpayers? Maybe they should look there.
I am not a big fan of the government giving handouts of any sort to stimulate the economy. However, I find it amusing that this administration asked for $300-$600 per person for the economic stimulus package earlier this year, and has asked for the equivalent of $2000 per person to bail out Wall Street. Perhaps the difference in amounts points to where our government's priorities lie: with big business, not with taxpayers.
This is a boondoggle on the surface math of it... take a look
Lets say there is 50 Million homes in the U.S. With the recent (past) housing craze lets say %10 of people own there home free and clear (2001, HUD said 40% did, being conservative). Of that 45 million, lets say 15% of those loans are at serious risk (that seems serious), leaving 6.75 Million homes at risk...
They want 700,000,000,000.00 (lots of zeros). 1/4 will be used for Admin (guessing). That leave 525,000,000,000.00
Now divide that bye 6,750,000 home... EQUALS = 77,777.00 Per home.
Does this Math work? This staggering amount of money now seems puny and likely to just prop up the problem until the Dems are put into office.
I say we invest in the homeowners of America rather than the investment banks (however a vanishing breed, along with the 'Puma'). Set up a program where banks and homeowner work to re-negotiate the loan and the taxpayer becomes a co-beneficiary to this deal. We get these bad loans off the books there correct equitable way, rather than a 'bail out'.
Exactly! Give the money to people who have mortgages and work hard to make payments on time. Apparently Mortgages are the source of the problem, so spend the cash there instead of propping up broke investment banks.
It's frustrating to me that as part of this bailout we will be refinancing loans for people who greedily bought more house than they could afford. As a self-employed, lower-income person, I had to use a no-doc (sub-prime) loan to buy my house. However, I only took on what debt I could afford. Now I will have to pay taxes to help refinance others who didn't have the same self-discipline I did? Give me a break, literally, in the form of a reduction in my interest rate.
Also, I find it frustrating that because people abused the no-doc loans, there will be no such animal anymore for people who cannot qualify for a traditional loan, but are still able to make their payments.
We could help the homeowners in foreclosure if every legislator and member of any governmental body that owns more than two homes had to give up, all but the two, to someone who has been foreclosed...
Listening to comments on this situation, Gretchen Morganson of the NY Times has come the closest to the truth; saying that all of the money flowing into the system in good times of selling these financial products was like feeding at the trough, though no-one, including default insurance issuers had any intention of ever paying off their implied obligations. Several experts have commented how we need to keep the system functonal so that it can continue to serve us and that we need to keep these valuable people in the business, no matter their levels of compensation. Really? We need people to keep making up new types of fraudulent schemes to sell, and governments that guarantee the thieves existence? Would we be so much worse off with a few executions and a realization that it won't be tolerated? Would it be un-American to ask for obligations to be met, and if not, then for the solution to come out of the pocket that was stuffed with the money in the first place? These aren't "acidic" investments, they are peoples homes and most likely quite modest compared to the mansions built on this criminal fraud. Let the heads roll.
If we are holding teachers to a standard then we need to hold the financial 'wizards' of the business world to a standard as well. I would rather see the money go to education before it goes to the banking industry. We are really in trouble with the country if we can't spend money on education and health care, but we spend more than it would take to educate and provide health care to every american who needs it, to bail out the rich investment bankers!
Spend the money on the people!
The irrefutable evidence is in. We don't need a standardized test to know the score. The Republican Party gets an F in economics, domestic and global. Its 30 year old policy of DE-REGULATION has literally consumed our economy.
Now it wants to eat the taxpayers for lunch, your future and mine, our children's and our grandchildren's, without a shred of oversight.
And this is AFTER the US Dollar had lost 40% of its value from 2000-2008 under Bush/Cheney!
SOS to Voters: FIRE ALL REPUBLICANS, EVERY LAST ONE OF THEM. It is time for a well deserved lesson in accountability for the party and the politicians that have made accountability in education their mantra.
Three comments: Why should we trust the people who have gotten us in this mess? There needs to be bipartisan over site of how this money is distributed. Perhaps professors in economics.
The taxpayer needs to be given some dividend type reward for using our money. (Perhaps similar to how the bailout of Chrysler went.)
Banks have lobbies, influencing how our Congress will vote on this issue. Banks natural want the highest amount paid on these failed leverages,the taxpayer will what to pay the lowest reimbursement.Who speaks for us? Our Congressional Representation who is being influence by money from lobbies
Why are these mortgages called "toxic assets", why don't these institutions want them any longer, and why did they buy them in the first place? And if it is good for the economy to have the government bail investors out of bad investments, then will the government buy my worthless Enron stock?
My belief is that these investors took a risk when they bought what they hoped would be high yielding mortgages, and now find that they shouldn't have bought them. We should not take them over and give the lenders the money back.
Instead we need to halt all foreclosures, and then create a new mortgage through FHA, called a "salvage mortgage" where people in foreclosure on their primary residence due to fraud, hardship, or any other compassionate circumstances, can refinance with a new 40 yr. mortgage subsidized by the gov't at half the going 30 yr. fixed rate, and then give up half the future appreciation in their home. If circumstances improve, they can refinance later and get their whole equity back if they repay the subsidy cost, so that either way the government won't be out money and people won't be kicked out of their homes.
By helping people in foreclosure, mortgages would get repaid, and that would take assets off lender's hands at eventually no net cost to the public, and it would help the little guy on Main St. which would end up helping the big guy on Wall St. If we bail out the big guy on Wall St. it's not going to help the little guy at all, and Wall St. will soon be back with another scheme to get money out of us, claiming that is the new "fix" that's needed to save the economy, when what our economy really needs is subsidies for energy self sufficiency making alternative energy equipment here in the US with American workers.
In Germany, banks have to give people low interest loans for solar and wind investments in a person's home, and the utilities have to buy the electricity at a high enough rate to pay entirely for the loan. That is the kind of bank/utility intervention our government needs to engage in, not giving a trillion dollars to investors who made bad decisions.
If we spend this money on Wall St., we're not going to have it to really help our economy after the bail out plan doesn't work anyway.
No bail outs for Wall Street!
I have to preface this:
The quote "there were mistakes made" is a total whitewash - yes many mistakes, but the major cause is and has been outright corruption, cheating, hedging, bribery of one sort or many. lying, and other actions not only of the unethical sort, but actions illegal, and now most of the boo-hoo on the execs?/institutions? part is trying to cover their tracks in time and confusion.
The biggest mistake is that the country has been allowed to be run until it has become, de facto, taken over by large corporations and away from an informed voting populace - an ?economocracy?, in the derogatory sense, perhaps, or a kleptocracy of our very own. When one has had the opportunity to serve these people, up close, see them when they are at their unguarded moments, their hubris is breath-taking, and it is contagious among them. Look at what has leak out unto us, the 'innocent' public.
I think I have a few ideas i would like to introduce. I?ll try to be blunt, but i can guarantee nothing.
If anyone thinks that the financiers, who do simulations for everything, were not also doing simulations of what would be a worst case scenario, and how they would get themselves (and their second house, third mistress, off-shore bank accounts, and alimony payments, illegitimate sons in private schools, et c) out of it, they are fooling themselves. And IF they were NOT doing such simulations, they are the even bigger fools. But i think it is greed and incompetence which has caused this, brought us to this point, and it has been a long time coming.
we, the public, have lain on the tracks like Pauline, while Oilcan Harry has gone thorough all sorts of machinations, and we have seen the train steadily approaching down the tracks for some time- ?what?s that light, what?s that light??
who is to blame??
Well, in this case, it IS OilCan Harry, because even while he has been telling us he is loosing the bonds so we can escape before the train cuts us to bits, he has really been rebinding us with other and more fickle promises, more and more fickle as the train gets closer and closer.
We are greedy idiots for having trusted them, and they are scoundrels for lying, and then lying more to us.
So, idea 1,they lied to us and we foolishly, unquestioningly believed them, and they knew how iffy the balancing act had become over the years, at least since the ?80?s, eh? this is not some recent upshot that suddenly and recently ruined a perviously perfected system. As the broker will tell you each and every time that you ask - ?This is gambling, there are no guarantees.?
. I myself am in the bizarre situation of having some investments. I am no real genius myself, although i test out fairly high. Let me tell you without seeming like an intellectual snot, - I have never met anyone in those offices who is close to brilliant, yet there they are, running around with billions of dollars of other people?s money - blame is distributable here, and while responsibility is something other; who are we for letting nitwits and nincompoops and just plain common men and women run around with something so important, with no oversight.
2nd- there is responsibility here, and this is of such great consequence that a debacle like this is the true definition of crime, and it cries out for judgement and justice -just like there are people with mortgages who are going to be homeless because of this, ruined by this, there should equally be upper echelon execs who become homeless- let them as well try to work their way back from literal nothing, not proportional nothing - if they are really that talented, they can do it, if not - they never deserved the privilege they have so so egregiously misused, no - this is abuse, this is not misfeasance, this is malfeasance.
This ? we?ll scare away the talent? argument against responsibility with teeth is bull pucky- ?falling on one?s sword? is honorable- and these people have no honor, what they have instead is our bank accounts. if they want the reward, they have to accept the responsibility- it is grossly unfair for the incompetent to skim off the cream as it were, and skip out when the cream goes badly sour, or the cow dies because they were keeping it, milking it to the death and not giving the poor beast nutritious silage. How stupid can anyone be for not feeding the cow they are milking.
This is also the class that screams communism and socialism about public education, public health, public funding of great arts and other works. All the benefits to them and all the risk to us? For believing this, for accepting it as de facto, this is our failing. John Q. Gullible Public!
3rd -there should be, there must be if we are to avoid doing the same thing over and over again, a winnowing out of the less intelligent as one rises, and ethics should be so ingrained during anyone?s rise that to call it mandatory would be redundant. Obligation is a word. A sophomore college level ?Ethics 101-b class is not it. We have agreed-upon ethics dating back 5000 years, and actual living philosophers are incrementally bettering our potential every year, every decade. We have the latest walkman/ipod- how much more desirable up-to-date, and actually functional/functioning ethics. Ethics is not religion. Ethics are demonstrable. We have become an unethical people. The demonstration is before our eyes. All it requires to see is open and educated eyes.
We cannot have those of lesser intelligence doing what requires great intelligence to accomplish. And yet we have exactly that, and these lesser minds find it extremely difficult to resist the temptation of so much! and so easy to take! Ask yourself, a pile of millions of dollars, there loose in the office, how much would you try to stuff in your pocket before you felt guilty, shamed, - especially when your co-workers brag about their ?take?, in the restrooms, in the elevators, in the bars before and after, they brag - status!. How much could YOU resist, in such a situation? - Really ?
There is no shame in some aspects of being as one was born - we do not expect the physically frail to lift as much as the very fit or very large - shame would be when the frail tries to lift and falls and breaks much of value.
is it not the same - is not intellect of greater or lesser it?s own gift, and while to reach is admirable, to over-reach is asking for calamity - and this is culpable.
if we as a society and culture had actual demands of intelligence and ethics we could have avoided this president entirely, and perhaps the previous president may have been reformed before he did something unethical
and now, sending the fbi to investigate - how is this not like sending gorillas into the libraries and bookshops looking for evidence of plagiarism. The trap is set.- we may get our own KGB out of all this - if indeed some secret arm of 'official investigation' has not already been brought into being by this ever-so transparent administration of today.
There have been predictions that this may be our last election and an interregnum is in our near future - and not by the likes of Jean Dixon or Mama?s Hot Tarot Seances.
I think democracy and ?America?s Favorite Home Balls-up? are not compatible.
there is blame to go all around far
to bail or not to bail?
WE ARE ALREADY SUNK
the question is- to where should we swim? -just any shore? i
-is the vision, the myth, of America no longer within our range?
Columbia strides away, weeping?
When I gambled that one more job change wouldn't hurt us... we lost almost everything and are still paying the debts. It has impacted our relatives and those we supported, our micro economy, if you will. Our story is not so much different, perhaps that rich uncle in Washington will help us out...
That?s what I think should happen to the folks who have gambled on Wall Street too...
I have three questions for the experts:
1. What will the bailout do to the value of the dollar?
2. Why did the Federal Reserve actually relax the banking rules yesterday, while Secretary Paulson was telling Congress that lax regulations helped create the problem we're in? (see http://www.nytimes.com/2008/09/24/opinion/24wed1.html?_r=1&hp=&adxnnl=1&oref=slogin&adxnnlx=1222268851-pklLALXCCUZlhnRx4B9LlQ )
3. What is Phil Gramm likely to do with the $700 billion if McCain is elected and makes him the Secretary of the Treasury?
[quote]What will the bailout do to the value of the dollar?[/quote]
I was wondering the same thing. IIRC, part of the reason for the weak dollar is our giant national debt. There's no way federal taxes are going up in the short run so all of the 1+ trillion bailout dollars go straight onto the national credit card.
The "prevent a credit freeze" rationalization for the bailout is not true. The same money could be used to back new loans from ordinary banks to people with good credit, collateral, and honest projects.
Instead we are being told by George "social security is bust" Bush that we have to give the money to the people who made the bad loans, and we have 72 hours to pay up. Or else.
I have been out of town (the Oregon Outback) w/o TV and radio and first heard the details of this yesterday as I got close to Bend and OPB came into range. If the republicans think the free market is so great, why the bailout? I think it's pretty clear, the wealthy (read GOP) will be protected from losses while the average American will have their tax dollars wasted further (IRAQ) but the 'fiscally conservative' President.
Can't wait to see what McCain does.
Hope you've brought your cattle gun ;)
I don't understand why the proposed bail-out is targeted to investors on Wall St. rather than homeowners on Main St. Will the US Treasury's purchase of all that worthless paper somehow turn all the accumulated dross into gold? Instead, the money could be used to create or empower an existing federal agency to work with borrowers and lenders to renogiate the terms of mortgages currently in or at-risk of default. Or, where the borrower is clearly in over his or her head, allow the federal government to take possession of the real property by making the required mortgage payments -- until such time as the real estate market recovers and the property can be sold. Wouldn't that protect both homeowners AND investors by restoring the value of the individual mortgages underlying the securities? And simultaneously prop up the housing market while providing taxpayers with collateral with an actual market value, rather than a stack of worthless promises?
There seems to be something that smells really familiar in Washington. Getting beyond the why?s and reasons of the Bailout package; I am sensing yet another conspiracy towards the American people.
We have a major push to get this bailout accomplished with some timing issues.
We have a chairman that has close ties to a major investment firm that he sais we need to bail out now right as congress is about to recess, an election that will most certainly remove that upper financial and executive staff, the first set of debates scheduled on the same day that the feds say they need to have this bailout approved, etc.
I listened to the chairman say that the American people will suffer if we don?t get this done immediately; by not having availability to loans (cars, houses, business, etc.) when we need them. Well, that is a lie! My neighbor just got a business loan this week, one of the banks in question, Washington Mutual, is making business, personal, car and home loans as we speak, and most any auto dealership you drive by is offering car loans.
I don?t buy it! And we, as Americans need to have congress take a step back and reevaluate the entire package. I would rather take the 700+ billion dollars and use the money to keep the ?good banks? solvent, the people from losing their houses, and insuring the 401s, IRSs, money markets, and saving accounts that are the real property of the American people are protected.
Something is just not right, and I don?t want this government to make another Iraq size mistake. Until we find out what is smelling so bad, we should not allow for this potentially catastrophic decision.
I don't mean this to sound inflammatory -- but it is a question that I think has to be addressed: What is the definition of fascism? Didn't Benito Mussolini say it was the union of the corporation and the government? Isn't fascism the system of taxing the population for the benefit of business? This isn't the first time this has happened in this country either. Have we become a fascist nation?
I was irritated after hearing about the bailout. No details but a rush to do something. What happened to an economic system where the weak companies are weeded out? I emailed my senator:
Dear Senator Wyden:
I'm disappointed, angry, cynical and have no confidence the $700 BILLION financial bailout plant being rushed into action will work.
I've read your statement and I agree with its content. There are so many things wrong with this plan that it must not be passed in its current thoughtless form.
1.What are the plan's details?
2.How will tax payers be protected or benefit?
3.Will the plan actually fix the problems?
4.How will accountability, integrity, transparency be incorporated into the plan?
5.Why is there so much hurry to pass a complex and critical plan when financial experts have known for a long time that the American economy has been resting on a foundation of sand, obfuscation and deception?
What can we do to fix our government and corporations so they work right?
My stock portfolio has not improved appreciably since 9-11. It's extremely difficult to find reasonable employment. Everything is more expensive. And our problems are mounting.
I resent that rich, privileged, Wall Street and government insiders have earned excessive salaries and golden parachutes but are not held responsible for their excessive risk taking with others' money.
Thank you for doing what you can to restore sanity to our way of being. Good luck. Let me know if I can help. The last eight years have been a nightmare and I'm ready to change course.
re: Wyden Issues Statement on Administration Proposal to Address Financial Crisis
Here we go again, with the "imminent" word. When that one gets bandied about, anything can be accomplished - wars, annullment of basic rights, bilking of citizens, passage of incendiary proposals...
If we the people are going to be investing nearly a trillion dollars of OUR money in the private financial industry, let us have some order about it. Let us take a moment to ensure we will be protected from the unfettered authority of a select few. Let us learn from history, not just history decades old but the very recent history of the past year, month and week.
Where is the reason? Where is our voice? I can't stand being ripped off!
As we face this current financial upheaval, it?s surprising to me that few people are discussing John McCain?s dubious role in another financial debacle, the savings and loan crisis of the 1980s. Why isn?t anyone addressing the fact that McCain was one of the ?Keating 5,? five senators investigated by the Senate Ethics Committee for influencing regulators in the Lincoln Savings and Loan bailout? Investors lost millions and taxpayers lost billions, making it the largest of the S&L scandals. It seems to me this is a part of McCain?s resume that should be part of today?s political debate.
If these companies can raise debt financing from the private sector then they should do that. If they want each American household to invest $7000 in their companies then they need to dilute their stock and share ownership. You don't get risky investment money without sharing in the future benefit.
It amazes me these financial institutions that were so irresponsible with their investors money now expect us to believe they will be responsible with taxpayer money. They are less accountable to us than they are their investors.
Over and over we've been told the US can't possibly afford to set up a system to provide health care to all citizens, yet suddenly we can commit $700 Billion dollars to buy worthless securities and must,must do this by Friday. I don't buy it.
The original bill is a simple read. Anyone can see is a set up for one person, with no oversight, to spend a huge amount of our tax dollars helping his friends in the banking industry.
It is human nature to care more about the people you know best. Paulson knows plenty of Wall Street Bankers and probably no one without health insurance. He may sincerely believe what he is saying. That does not make the bail out the best solution for the American taxpayer. It is the job of congress to say "NO!"
We will probably slip into recession whether we do this or not. Spending a couple weeks coming up with a fair way to deal with this problem is not going to make that much difference. Get it right. Don't rush.
Read the following articles and SEC press release:
Goldman Sachs creates toxic mortgage backed securities and then shorts them.
It is hard not to believe that wasn't intentional.
And who was in charge of Goldman Sachs at the time?
Treasurary Secretary Hank Paulson.
Who gets caught naked short selling?
Who gets protected by the SEC from naked short selling?
Who chairs the Working Group to which the SEC belongs?
Treasury Secretary Hank Paulson.
And this is the guy we want to give a $700 billion taxpayer check to so Goldman Sachs and others can be bailed out?
I am not an econimist, but I am tired of hearing how
the market reigns supreme and will fix itself, then the same people
who seem to think this and scoff at welfare or help for the poor
expect this bail out. Give the $2000 to each tax payer.
I?M PISSED OFF ABOUT BAILOUTS!
And it's LOCAL!!!!!!!!!
First ? Eight years ago YOU and me paid TWENTY MILLION DOLLARS to ?UPGRADE? a stadium that doesn?t even have OUR name on it: PGE PARK.
Second ? In this morning?s Oregonian David Sarasohn states that HENRY PAULSON paid himself a THIRTY NINE MILLION DOLLAR BONUS when he left as CHAIRMAN OF GOLDMAN SACHS in 2007 to become ?Secretary? of the Treasury.
Third ? Henry Paulson is THE ULTIMATE WALL STREET INSIDER!
Fourth ? Henry Paulson has a son, a SPOILED TRUST FUND BABY, named MERRITT PAULSON.
Fifth ? Rich kids used to get polo ponies but instead of a pony, SPOILED TRUST FUND BABY MERRIT PAULSON wanted A SPORTS TEAM.
Sixth ? DADDY PAULSON, because he wanted to make baby happy BOUGHT SPOILD TRUST FUND BABY MERRITT PAULSON TWO TEAMS!
Seventh ? PAULSON + GREED + MONEY = BEAVERS & TIMBERS
Eighth ? Now TRUST FUND BABY MERRITT PAULSON wants YOU and ME to SUBSIDIZE HIS TEAMS WITH A BAILOUT!
Ninth ? TRUST FUND BABY MERRITT PAULSON wants the PORTLAND CITY COUNCIL to use its PUBLIC CREDIT RATING AND PUBLIC BONDS TO BAIL OUT PAULSON?S FAILING TEAMS ? THE TIMBERS AND THE BEAVERS!
Tenth ? Cleverly disguised as a ?public benefit? PAULSON WANTS YOU TO ?FIX? PGE Park FOR SOCCER. Paulson wants you and the PORTLAND CITY COUNCIL TO ?UPGRADE? PGE PARK ??????.. AGAIN!
BONUS! (It gets even better) On top of ?FIXING?PGE PARK for SOCCER ???. PAULSON WANTS YOU TO BAIL OUT HIS TEAM WITH A NEW ?BASEBALL STDIUM? in LENTS! (who wants to go way the hell out to LENTS from the west side?)
I say KIDS SHOULD PLAY soccer and baseball NOT PAY to WATCH soccer and baseball.
I say BAIL OUT OUR SCHOOLS NOT STADIUMS.
FIX OUR OWN SCHOOLS' TOXIC LEAD PLAYING FIELDS ------ NOT A RICH KID'S TOYS
The $700 billion would be spent buying financial instruments and loans. Financial instruments are not backed by tangible assets like houses and such.
If the real estate market falls more than another ten percent, the lower tranches that the $700 billion would be buying would be a total loss.
This means we taxpayers are getting ripped off no matter how it turns out.
The bailout is a huge incentive for the government to keep the real estate market artificially inflated instead of allowing it to fall to its natural level. If they let if fall to its natural level, those bottom tranch securities will be a loss.
In other words, if real estate is propped up, anyone in the market to buy a house is going to have to pay more. That's their "reward" for being fiscally responsible and not buying during the insane boom.
If real estate falls to its natural level, the bailout loses all that money. Every taxpayer loses.
Exactly. Those who have been prudent will be punished because housing prices may not fall as much as they should to come more in line with incomes. Our children will be paying directly in higher taxes and lower government services. And they'll be paying indirectly by paying higher prices for homes than they could have.
I'm sorry, but executive pay is NOT a side show. If a liberal is someone who is generous, only with other people's money, then what do you call someone who is a risk taker but with other people's money? A wall street executive? A "risk taker" is not someone who's worst possible outcome after making a gigantic mistake is that he/she becomes unimaginably wealthy. These guys need to feel "personal" pain. Without the personal pain, there is no incentive to make good decisions. Without incentive for good decisions, or fear of bad decisions, the system doesn't work.
If these mortgage backed securities aren't getting a bid and haven't for months, then perhaps the sellers need to lower their prices? At some price they will get a bid.
Buffet was apparently confident enough yesterday to buy a $5Billion stake in Goldman Sachs. So it's not like all confidence is gone.
The sellers have been lowering their prices. That's why you keep hearing about losses from the various financial houses. Selling MBS for less than they bought them.
As I understand it, this is a $700B rolling fund. So if they bought $700B worth of these (quite possibly worthless) securities and then dispose of them for $100B they can go back and buy another $700B in worthless securities and lose even more.
That's exactly what happened with the RTC that Paulson said he wants to model for the current crisis.
Except the RTC was on a much smaller scale.
I would like to know if the Congressman thinks the bailout package should include equity in the financial houses in return for the bailout money.
Early on, Conservative Republican Grover Norquist was preaching that he wanted to shrink the government so small that he could drown it in a bathtub, well he just grew the bathtub so huge that he has successfully drowned our government in debt and financially raped our children for generations into the future.
Norquist, et al, have successfully sabotaged our government "of the people, by the people, and for the people". If any foreign power had done this to us we would have immediately gone to war against them, isn't it time to acknowledge our "enemy within", Conservatism and Free Market Libertarianism, and make sure that they can't get away with this?
We ought to set up a Nuremberg style Trial, define Financial Crimes Against Humanity and then go about rounding up and trying people like Grover Norquist and the rest of that Conservative and Free Market Libertarian ilk that did this to us.
Rather than fire these executives, force them to resign - no parachute payouts are necessary. As acknowledgement of their bad leadership, have their assets put in a holding fund that can be used as the interim bailout fund until congress has time to prudently act on the situation. Bar them from working in the financial sector again. Freezing their assets can happen in days.
I think you are thinking along the same lines. Now that these guys are going to be public employees, and the companies are taking out loans from the government, they need to pay that money back first, with interest. Miss a payment to the government, and do what would happen to me if I miss a tax payment. Send them to jail. How's that for incentive?
Why are people skeptical? Gosh, where to start?
The people pushing this are the same people who have been telling us for the last year that everything is fine, and now suddenly it's an "OMG the world is ending give us the money" (See Naomi Klein's "The Shock Doctrine").
The people pushing this are the same ones who said "Trust us. Let us have these changes to the banking system and everyone will prosper". Seems that only they have really prospered.
They wanted unfettered, unsupervised powers.
The middle and lower class have taken in the shorts for the last 40 years while wealth has concentrated at the top. It's entirely rational for them to be skeptical of any changes that Wall Street and its government allies are pushing.
I could go on and on, but in short, we _should_ be skeptical.
Let them fail.
Adam Smith is rolling in his grave! The tax payer needs to get tangible assets for their investment. A Bailout package with no tie to real, tangible assets (not just potentially worthless mortgage 'paper') is ridiculous. See the excellent article in yesterday's NY Times business section about how the Swedish government resolved their mortgage crisis in the 90's. The entities that are bailing out lived on very high profits for many years trading 'paper' in a high risk, high reward business. This downturn is the downside of that strategy. If they want to sell these devalued assets they must firs write them down, then provide real shares of their company or actual ownership in the properties to the investors bailing them out. Anything else is socialism and against our entire democratic free market system!
I think it was Thomas Jefferson who said every 50 years. Well we're overdue. This is a joke. These Ceos need to have everything taken from them before any taxpayer money is used for this. Why don't we take the $700B and put it towards infrastructure in this country.
Even Osama Bin Laden with his attacks on the World Trade Center Towers has not done as much damage to our United States as our Conservatives and Free market Libertarians.
We have to start making all our decisions
with a multi-generational mind.
If we must suffer a hardship
so that our children and grandchildren can live free,
then let the hardship come.
Conversely, we should not enslave our children and grandchildren -
-under ONE TRILLION DOLLARS OF NEW DEBT
so that we may spare ourselves suffering in the short term.
WE allowed OUR lawless markets to create this mess.
It is for US to deal with. Not our children.
My children and unborn grandchildren,
who will live in slavery,
have no knowledge or understanding of the decisions
that are being made for their future.
The total debt we will leave our children is Eleven trillion dollars.
Eleven trillion dollars of debt will enslave
my children and grandchildren.
They have no say in the decisions
that we are making for their future.
We all know that none of the people
of this generation will be paying this back.
Let a recession come.
Or a depression.
These things pass in time.
Be it a year, or ten years.
Eleven Trillion Dollars of Debt will enslave entire generations of people who have NO SAY in this matter.
This generation allowed lawless markets to make this mess,
THIS generation should take the hit.
Very well said. We must not put this debt on future generations. It would be immoral to do so. Let's pay the price now and get it over with.
I don't think many understand the worldwide consequences of our current financial situation. This isn't just about bad mortgages or bad loans and big wallstreet finanical firms that need huge bailouts or they may fail. This affects everyone in the world as all money markets are tied to each other, banks are now international as these bad loans stretch worldwide. This crisis affects everyone that has a home, credit card, IRA, stocks, bonds or any financial investment on wall street or not. If these large financial firms are allowed to fail, credit will be difficult or impossible to get, home values will fall further due to loans being tight or impossible to get, small and large business will have layoffs or cease to exist due to lower consumer spending. In other words a major recession or depression will happen. All that money you invested for retirement may just disappear! This may not be as bad as the great depression but it would be a major world wide financial meltdown. I for one do not wish to see the government bail out bad financial decisions on wall street or the mortgage industry in particular, but at this point there is little else that can be done. If we do not take immediate action we all will loose, not just the rich investment bankers on wall street. I for one one many stocks and I am not rich. I have seen how bad the markets are, and they will drop to 1950's levels if something doesn't happen soon. For this ball out there needs to be government oversight and of course the money managers that caused it should not be allowed to profit from their positions, but this is a real crisis and real action needs to be done very soon, or it will be too late.
Yes, Frankhaas, we must proceed with the bailout...I totally agree with you, as much as it curdles my blood. BUT it doesn't have to be hurried. And we DON'T have to surrender all safeguards to the Secretary of the Treasury of this or any future administration. We need thoughtful legislation, crafted with the input of a wide variety of economic experts...not a hastily patched together legislative Frankenstein that will come back to bite us in the ass and potentially drive even the US Govt into bankruptcy with. SAFEGUARDS. ACCOUNTABILITY. EQUITY POSITIONS FOR THE TAXPAYERS. NO GOLDEN PARACHUTES FOR THE EXECS WHO CREATED THIS MESS. AND BUYING THESE SECURITIES AT THEIR HOPED-FOR, IMPROVED FUTURE VALUE RATHER THAN TODAY'S VALUE???? Are they nuts? How stupid do they think we are? There has to be a more creative, sound way to proceed.
But see the excellent post by Aidenj above. This mess was made over the last 10 years or so. This generation should deal with it's own mess. It would be immoral to pass this debt onto future generations - and this is exactly what this bailout would do.
As I am listening to the show on air, I cannot NOT be angry and feel disgusted at these Wall street executives/CEO - I understand the need to pump in money to the Economy to get the credit flowing, but giving a free hand to the Treasury Sec and Wall Street $700B IS NOT A solution. I have a suggestion:
Government gives = $700B now
Government taxes = $x*y - $Z
Where x = Number of companies bailed out by Governemnt including Bear Sterns, Fannie and Fredie, AIG
y = Number of top executives who profited the most and made these decisions - I agree this will need some due diligence and maybe FBI investigation, but w/ time can be done.
Z = some money government invests since they may not be able to get this $700B alone from x companies --- but a less than say 5-10%.
Profit made from such $700B investements by Government should go back to taxpayers in terms of tax relief or something.
They, who made this mess should be respnsible and PAY for this mess --- these executives made millions in bonus from these bad deals, so now let them pay for it. It this means they have to sell their luxary homes at $50M and planes at $20 ---- so be it.
This is a market economy - let us believe in the principles of that and not turn towards a socialist economy. Otherwise this is a biggest $700B scam that King Bush and his wall street associates will have pulled that off -- sip on their drinks on a tropical island and laugh on how smart they were in fooling a whole nation. Think of Ocean's Eleven last scene in front of the Casino !!!!!
Is this the same administration that has made it harder for individuals and small businesses to file for bankruptcy? The regulations and lack there of allows for these mega companies to exist. That is fine when they are making money, but when they make bad choices in investments then it is a crisis.
When they were making lots, they also had enough loopholes not to pay little in taxes too. Now they want us, the little guy, too support them. I say NO
There is a provision in the sarbanes oxley law called the mark to market rule. This was passed after the Enron and WorldCom fiascos to address ethics reform. Economist Wesbury suggests changing that one provision temporarily for our current economy crisis, because it is that that is keeping our economy frozen.
He also advocates extending insurance by the federal government but no loans. If we do this, the taxpayers aren't stuck with a $700 billion debt. However, with the government backing the loans with insurance, then banks are free to loan money again and the economy can repair itself. Just because the subprime market bottomed out, it doesn't mean that the houses behind those mortgages are worth nothing. There is genuine real estate backing them up.
I believe we all should write or call our representatives and senators to back this action. Instead of spending $700 billion, Wesbury says the cost would be dramatically reduced to around $40 billion--a much more reasonable solution and accomplishes the same thing without sticking taxpayers with the debt or making them mortgage bankers.
Wesbury is just another fair weather libertarian. Why should we listen to him?
Here's what the WSJ's "#1 economic forecaster" (in 2001) was saying on Dec 2005:
"While it is tempting to think that government programs are necessary to address anxiety, in reality only the free market can successfully navigate today's rough waters. In the end, it will be the private sector, not the public sector, that quells all this anxiety and creates the opportunities so many desire."
Exactly how does the government offer insurance? Is the US going to guarantee that a loan won't default and pay the full value of the loan if it does? How much would this insurance cost? I'm sure the institutions who hold these loans and know much more about their quality would be able to figure out which loans to insure.
Not marking to market will just continue the charade being played by the big banks. We need to get them to bring all their level 3 assets onto their books where we can see them.
The rationale for the $700 billion bailout is that if the financial system is not stabilized immediately by rescuing the financial firms that created the problem, then the whole system will collapse, hurting everybody, in particular middle and lower income people. This reminds me of ?trickle-down? economics - let?s call it the ?trickle-down? bailout - help those at the top in the ?hope? that those at the bottom will benefit. Why not let the markets do their thing, collapse (if they will), forcing at least some of the people who benefited from the risky investments and practices to pay for their mistakes and greed, and use the $700 billion to directly help those at the lower end of the economic spectrum who may be adversely affected by such a collapse if and when that becomes necessary.
With 30 years of DE-REGULATION pounding us into economic oblivion, it is time for American taxpayers/voters to bail on the Republican Party. They are far too committed to big business and the fat cat friends to generate the crtically needed RE-REGULATION that our financial system requires. If they stay in office, we will have more of the same, meaningless ENRON-type band-aids to give the appearance rather than substance of REFORM. It is ludicrous that they want the taxpayers on the hook with NO OVERSIGHT or accountability! Is there any limit to their contempt for the public?
WHAT'S WRONG WITH THIS PICTURE? Let's see:
-the same people who made these bad decisions are still in place
-they get to keep their jobs unlike other people who make mistakes and are fired
-they don't have to pay the bailout money back
-they get to make profits from the bailout
WHY DON'T THEY LOSE THEIR JOBS & HAVE TO PAY THE MONEY BACK?
Gail Campbell, Eugene, Oregon
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