Troubled Assets Relief Program (T. A. R. P.) should stand for tarp, a covering over the taxpayer's eyes so they don't see that this is just a wealth distribution scheme for big business. This whole thing is such a mess, first the administration asked for $700 billion dollars for a bailout program and said that they would create accountability by buying up bad mortgage assets to hold until such a time that the mortgages would increase in value and be able to be sold to pay back taxpayers who are ultimately paying the bill to bail out Wall Street.
Earlier this week Mr. Paulson from the Treasury said he decided that that was a poor plan to buy bad mortgage debt and instead told us, that after getting this money, he decided to just buy stock in the failing companies to faster inject cash into the failing institutions. The problem with that is instead of having some land or property that would eventually be worth something again when the market recovers, Mr. Paulson has basically a handful of worthless pieces of paper bought from failing institutions that have a good chance of filing bankruptcy in the future leaving the taxpayer with worthless paper in exchange for $700 billion dollars. The other problem with just buying worthless stocks is that Mr. Paulson, the President, or the Congress has no way of restricting what these institutions do with the money that they are given.
It was never the Administration's intention to hold these institutions accountable for the money in the first place. If you look at what President Bush and Mr. Paulson originally asked for it was for $700 billion dollars to spend in which ever way they see fit, to anyone they see fit, for whatever way the institutions that receive the money see fit. Are the American taxpayers the only ones that saw this for what it really was, a wealth distribution program where every man woman and child would give $2300 to the fat cats on Wall Street who are making millions and getting big bonuses even though they ran their companies into the dirt with their greed. And what happened?
The institutions that received the bailout money, that the Bush Administration's "intention" was to free up money tied up in bad mortgage deals to lend out to people, to get the economy moving again, decided that they still don't want to free up money for lending. President Bush was on national TV pleading with the financial institutions to fee up that money, but without the teeth of regulation and oversight there is not much chance of the institutions using the money for much more than to shore up their accounts, buy other failed banks, and/or give their management people and stockholders something. We've already seen how they been spending money knowing that they are getting bailed out by the taxpayers, there were big parties, million dollars a month for people on retainer, and holiday bonuses of up to $230,000 for administration making close to $400,000 base salary. So for those paying attention it is Fat Cats - $350 Billion, taxpayers nada.
Now that the 2nd bailout plan didn't work, Mr. Paulson has a new, new plan on another way to use the 2nd half of the $700 Billion bailout money to bail out these financial institutions. Again I don't see much for regulations or ways to insure accountability. This latest play doesn't directly help mortgage holders that are either already in foreclosure or will be shortly. That's the one thing I don't really understand. One one hand I can't see giving money to people who obviously knew they were trying to buy properties they couldn't afford. On the other hand, there are a lot of banks and mortgage companies that took advantage of the housing bubble to convince people to take out money against their mortgages because the value of their homes had went up so much. Many of these people didn't fully understand what the banks were getting them in to and they took their lending institution at their word that they were sitting in a good spot to take on more debt. To a certain extent, if the government would just take over them loans that are on amounts higher than what the property is worth, reorganize the mortgages so that the people could have payments that they could afford, then the mortgages wouldn't be bad debt and shouldn't strain the financial institutions of Wall Street.
Now the major domestic car manufacturers want to be bailed out too, they are claiming that they will be forced into bankruptcy if they are not. Originally Obama and the Democratic Congress wanted the Bush administration to help bail them out too, but the Bush Administration didn't want to include the auto makers. Now the Bush Administration says that they would be willing to support bailing out car manufacturers long as there are no strings holding car makers to use the money to make more energy efficient cars to make the auto makers more competitive with other car makers. Again the Republicans don't want to place any restrictions on car makers on how they use that money. What is the sense if that? If we are going to bail them out shouldn't we retain the right to say how we want this money used?
President Bush recently made a speech claiming that the fault is not fault the free market system. This is one of the first things I agree with that Bush has said in a long time. The free market would be a working system without trying to bail out industries. It's not like these financial institutions didn't know what was happening, they just were hedging their bets that the government would bail them out. The auto makers and Republicans have been fighting any effort to make strides to increase mileage per gallon or make alternative fueled vehicles, two things that have caused the big three auto makers to lose ground to foreign car makers. The Bush Administration has already wasted $350 billion dollars that has no regulations on how it's spent for these failing industries to take and cut and run when that runs out. These industries should have just failed in the first place, they are going to any way, the only difference is this way taxpayers are going to be out $700 billion dollars first.
All in all this is a hell of a Christmas bonus for big business from the lame duck Bush Administration at taxpayers expense.
Showing posts with label Wall Street Bailout. Show all posts
Showing posts with label Wall Street Bailout. Show all posts
Saturday, November 15, 2008
Thursday, November 13, 2008
We Continue to Get Fooled Again
Unlike The Who song in the 70s, that states, "we won't get fooled again", it is instead, "we continue to get fooled again".
Remember that $700 billion bail out package for Wall Street financial companies that was supposed to free up money from bad debts for lending to get the economy back rolling? With most of the first half of that money gone or spoken for, it didn't work. A week ago a lame duck president got up on national television and pleaded with financial institutions not to hold on to that money to shore up their financial situation, or buy other failing institutions, but to use it for lending like it was intended. It looks like the original plan which was to buy up "bad" mortgages and eventually sell them at a later date paying back taxpayers when the housing market was higher wasn't really considered too hard to start with. Instead of buying failed mortgages, setting some kind of stipulations on how the money was spent or used to insure that the taxpayer could be paid off, the administration decided that we would just buy up the worthless pieces of paper called stocks from companies that no one else would ever in their right mind buy, because the companies are failing in the first place. It looks like Bush get's his money for his big business buddies one way or another. Now that almost half the money is gone, and they can't get banks to loosen up money for lending, the government is thinking about maybe starting to give the second half of the money to directly help homeowners, let's hope that they come up with a few better rules for regulating that half of bailout money.
Talk about redistribution of wealth? How are the bailed out or soon to be bailed out institutions reacting to the economy downturn? They are paying bonuses in the area of $230,000 to employees making base salaries of $400,000. Makes perfect sense to me. After your upper management loses all your money resulting that your company needs to be bailed out by the taxpayers, your management people need hundreds of thousands of dollars of bonuses to know they are appreciated. What?!! Yes during house hearings I heard that these institutions were paying up to a million dollars a month to people who weren't even working at the company anymore, but who were held on on retainer because the companies were afraid that these people would spill their trade secrets with their competitors. Trade secrets??? Mr. Big Business, you are broke, what is it about your company procedures would anyone want or value? Gee what would these trade secrets be? Something like, "How to Bankrupt Your Company and Get Bailed Out by the Government"? Or maybe, "Screw Your Company and Get a Million a Month for Not Working". And while those guys who make 400 thousand dollars a year and bonuses of 230 thousand dollars are getting paid by the American taxpayer if, God forbid, that taxpayer gets a 1 thousand dollar tax break, it is an evil wealth redistribution plot that will bankrupt the top 1-2% of Americans. While you are thinking about that, think about just how much that health plan or education, or disability is such a drain on society compared to them guys pulling in $600,000 dollars plus a year at your expense.
This is not even touching on all the taxpayer money going towards the war in Iraq or money going to other governments that are fighting wars for us. What about all the money going to the company Dick Cheney has ties to that supplies the instruments of destruction to support the wars around the globe. I bet that is another company that isn't feeling the pinch of the bad economy, the only company other than big oil. It isn't chance that in the movies Batman and Spiderman that more than one multimillionaire's fortune was built up using money from the arms industry, kind of like art reflects reality.
I have a bit of news for them politicians. The market is failing and stalled because the common man, the one that's not in the top 2% of income earners, doesn't have any money to spend on things that aren't absolutely necessary. Hell most of them don't have the money to spend on the things that are necessary. That what happens when you cater to the top 1-2% of the people who make the most, they divvy things up to make the most out of everyone else until everyone else don't have the money to keep the economy going.
These things should make you mad as hell. They should make you want to hold people, corporations, and administrations accountable for the mistakes that make and especially when they do things that either are illegal or should be illegal. The Bush/Cheney administration needs to be held accountable for their deeds while in office, they surely didn't protect the constitution that they swore to protect. They started wars where we had no business, screwed up the economy for their buddies gain, went against Geneva conventions and international law. The first step to fixing things is to find and admit where things went wrong to get to this time in space that we are in, and take steps that these things do not ever have the chance to happen again. Impeach Bush/Cheney. Then prosecute them.
Remember that $700 billion bail out package for Wall Street financial companies that was supposed to free up money from bad debts for lending to get the economy back rolling? With most of the first half of that money gone or spoken for, it didn't work. A week ago a lame duck president got up on national television and pleaded with financial institutions not to hold on to that money to shore up their financial situation, or buy other failing institutions, but to use it for lending like it was intended. It looks like the original plan which was to buy up "bad" mortgages and eventually sell them at a later date paying back taxpayers when the housing market was higher wasn't really considered too hard to start with. Instead of buying failed mortgages, setting some kind of stipulations on how the money was spent or used to insure that the taxpayer could be paid off, the administration decided that we would just buy up the worthless pieces of paper called stocks from companies that no one else would ever in their right mind buy, because the companies are failing in the first place. It looks like Bush get's his money for his big business buddies one way or another. Now that almost half the money is gone, and they can't get banks to loosen up money for lending, the government is thinking about maybe starting to give the second half of the money to directly help homeowners, let's hope that they come up with a few better rules for regulating that half of bailout money.
Talk about redistribution of wealth? How are the bailed out or soon to be bailed out institutions reacting to the economy downturn? They are paying bonuses in the area of $230,000 to employees making base salaries of $400,000. Makes perfect sense to me. After your upper management loses all your money resulting that your company needs to be bailed out by the taxpayers, your management people need hundreds of thousands of dollars of bonuses to know they are appreciated. What?!! Yes during house hearings I heard that these institutions were paying up to a million dollars a month to people who weren't even working at the company anymore, but who were held on on retainer because the companies were afraid that these people would spill their trade secrets with their competitors. Trade secrets??? Mr. Big Business, you are broke, what is it about your company procedures would anyone want or value? Gee what would these trade secrets be? Something like, "How to Bankrupt Your Company and Get Bailed Out by the Government"? Or maybe, "Screw Your Company and Get a Million a Month for Not Working". And while those guys who make 400 thousand dollars a year and bonuses of 230 thousand dollars are getting paid by the American taxpayer if, God forbid, that taxpayer gets a 1 thousand dollar tax break, it is an evil wealth redistribution plot that will bankrupt the top 1-2% of Americans. While you are thinking about that, think about just how much that health plan or education, or disability is such a drain on society compared to them guys pulling in $600,000 dollars plus a year at your expense.
This is not even touching on all the taxpayer money going towards the war in Iraq or money going to other governments that are fighting wars for us. What about all the money going to the company Dick Cheney has ties to that supplies the instruments of destruction to support the wars around the globe. I bet that is another company that isn't feeling the pinch of the bad economy, the only company other than big oil. It isn't chance that in the movies Batman and Spiderman that more than one multimillionaire's fortune was built up using money from the arms industry, kind of like art reflects reality.
I have a bit of news for them politicians. The market is failing and stalled because the common man, the one that's not in the top 2% of income earners, doesn't have any money to spend on things that aren't absolutely necessary. Hell most of them don't have the money to spend on the things that are necessary. That what happens when you cater to the top 1-2% of the people who make the most, they divvy things up to make the most out of everyone else until everyone else don't have the money to keep the economy going.
These things should make you mad as hell. They should make you want to hold people, corporations, and administrations accountable for the mistakes that make and especially when they do things that either are illegal or should be illegal. The Bush/Cheney administration needs to be held accountable for their deeds while in office, they surely didn't protect the constitution that they swore to protect. They started wars where we had no business, screwed up the economy for their buddies gain, went against Geneva conventions and international law. The first step to fixing things is to find and admit where things went wrong to get to this time in space that we are in, and take steps that these things do not ever have the chance to happen again. Impeach Bush/Cheney. Then prosecute them.
Wednesday, October 8, 2008
The Great American Rip Off
By now, even if you live in a hole, you should have heard about and are hearing about United States' and the world's financial crisis. Within the last couple of weeks our President has got on the boob tube and pleaded with Congress and the American people for a $700 billion bailout for the fat cats of Wall Street. This had to be done as soon as possible meaning days, not weeks, giving no time to have hearings or research what the problem was, what caused it, or what would be the best way to go about trying to fix the economy.
Within days of Congress agreeing to spend $850 billion on the financial rescue (bailout), there has been hearings with the House Committee on Oversight and Government Reform where we are learning that high executives and CEOs of Wall Street financial companies have left these companies with hundreds of millions of dollars that were paid to them, some of these fat cats were paid such amounts as a million of dollars per month having them on retainers. On top of the already tens of millions they were already getting, they took home millions of dollars in bonus or a form of severance, or retirement packages. Then as some at the House Committee on Oversight and Government Reform heard yesterday and the day before, even as taxpayers were bailing these companies out, some such as AIG were holding week long events at posh hotels that charged up to $100,000.00 a night for rooms, spending $440,000.00 for these events.
I'm sure that the American tax payers are just happy that their representitives voted to bailout these Wall Street companies at the cost of over $2300 for every man woman and child to save companies that paid their officers hundreds of billions in salaries and bonuses as they left their jobs before pleading to the American people to bail them out. There are many families that live on under $20,000 a year, it is just wrong that some of these guys were making a million a month, no one is worth that much.
Within days of Congress agreeing to spend $850 billion on the financial rescue (bailout), there has been hearings with the House Committee on Oversight and Government Reform where we are learning that high executives and CEOs of Wall Street financial companies have left these companies with hundreds of millions of dollars that were paid to them, some of these fat cats were paid such amounts as a million of dollars per month having them on retainers. On top of the already tens of millions they were already getting, they took home millions of dollars in bonus or a form of severance, or retirement packages. Then as some at the House Committee on Oversight and Government Reform heard yesterday and the day before, even as taxpayers were bailing these companies out, some such as AIG were holding week long events at posh hotels that charged up to $100,000.00 a night for rooms, spending $440,000.00 for these events.
I'm sure that the American tax payers are just happy that their representitives voted to bailout these Wall Street companies at the cost of over $2300 for every man woman and child to save companies that paid their officers hundreds of billions in salaries and bonuses as they left their jobs before pleading to the American people to bail them out. There are many families that live on under $20,000 a year, it is just wrong that some of these guys were making a million a month, no one is worth that much.
Monday, September 29, 2008
Bailing Out Wall Street
It's the politicians that just don't get it, or maybe they did but they decided to milk any available money they could from the populace any way. Let's look at it in a different way.
Say I buy a car from a dealer, the dealer wants to make big money off me so the price has been jacked up to the point where it is really over-valued. I drive it off the lot and it's price devalues a couple of thousand dollars, but that's not all. It turns out that the car is a real lemon requiring lots of money to be constantly stuck into it to keep it running, it gets to the point where I can not afford to keep the car because it has ate up all my money keeping it running, and if I sell it I will have to take a big loss because I can not recoup what I have stuck into it. Eventually I lose my job cause my car is not dependable and I'm late too often.
But it's not just my car with these problems, it's everyone's that has bought this particular make and model. Eventually word gets out and everyone quits buying this particular make and model. The dealer, having bought this make and model in huge numbers, even though he knew of the car's short comings, because he figured that he could make the most money from selling such high priced cars, is now stuck with a lot full of them and they are not selling. The dealer now is losing money and decides to file for bankruptcy. The government now steps in and says, "Oh this is bad, this dealer is really going to lose money and probably will have to go out of business. He will have to lay off mechanics, sales people, other people working in the office all of which have benefited from the high price of the car and the high commissions. This is going to have an effect on everyone, the people at the car washes, the people selling gas, people who sell tires and service, not to mention all the people who get money from the dealer and his employees like when they go to the bar, grocery store, buys a house, etc. We have to do something to protect the dealer's interests because it will affect all these other people and wreck the economy."
So the government comes up with the idea of collecting money from all the broke people who have been taken by the dealer's bad cars and they give that money to the dealer so that he can stay in business selling over priced crappy cars to other unsuspecting customers. At the same time the government, even though they know the car is over-valued and crappy, doesn't do anything for me, the person who is stuck with an expensive car that is not worth anything. This does nothing to make my car not a lemon, it doesn't get my job back, and it doesn't get my money back from all the repairs etc.
The dealer has a big fancy home, vacation home, mobile home, boats, ATVs, cars, SUVs, eats out a lot, gets paid vacations, and bonuses. I am stuck, broke from making repairs, no job, no 401s, and no running car........
Ok, it's maybe not quite the same thing, but in many ways it is. Wall Street has got itself in a bind. It's not because they didn't know it was coming, it was because everyone thought they could make their ungodly profits and get back out before the shit hit the fan. The financial people in Wall Street knew this, the president of the United States knew this, but everyone thought they'd be long gone before the ship went down, or maybe they figured that the government would not allow them to fail and bail them out. The president thought that he'd be out of office before the pumped up markets fail and he would leaving this mess on the next president (most likely a Democrat) and then the Republicans could use it against them in the next election. The failing market happened a bit too early, so now the Bush Administration comes up with this plan to give the very people who took advantage of deregulation to gouge the American public 700 billion dollars, from the very people that were taken advantage of, so that they can stay in business as usual.
This 700 dollar bailout does nothing to cure the problem at hand. All it will do is bring the market back up temporarily to give share holders a chance to get their money back and jump ship. After the share holders jump ship the country will be back to this same spot it is in now, except that the tax payers will be 700 dollars poorer. I believe that we need to demand from our leaders to let the market adjust itself back to responsible financial policies and reinstate regulations to keep this from happening again.
Say I buy a car from a dealer, the dealer wants to make big money off me so the price has been jacked up to the point where it is really over-valued. I drive it off the lot and it's price devalues a couple of thousand dollars, but that's not all. It turns out that the car is a real lemon requiring lots of money to be constantly stuck into it to keep it running, it gets to the point where I can not afford to keep the car because it has ate up all my money keeping it running, and if I sell it I will have to take a big loss because I can not recoup what I have stuck into it. Eventually I lose my job cause my car is not dependable and I'm late too often.
But it's not just my car with these problems, it's everyone's that has bought this particular make and model. Eventually word gets out and everyone quits buying this particular make and model. The dealer, having bought this make and model in huge numbers, even though he knew of the car's short comings, because he figured that he could make the most money from selling such high priced cars, is now stuck with a lot full of them and they are not selling. The dealer now is losing money and decides to file for bankruptcy. The government now steps in and says, "Oh this is bad, this dealer is really going to lose money and probably will have to go out of business. He will have to lay off mechanics, sales people, other people working in the office all of which have benefited from the high price of the car and the high commissions. This is going to have an effect on everyone, the people at the car washes, the people selling gas, people who sell tires and service, not to mention all the people who get money from the dealer and his employees like when they go to the bar, grocery store, buys a house, etc. We have to do something to protect the dealer's interests because it will affect all these other people and wreck the economy."
So the government comes up with the idea of collecting money from all the broke people who have been taken by the dealer's bad cars and they give that money to the dealer so that he can stay in business selling over priced crappy cars to other unsuspecting customers. At the same time the government, even though they know the car is over-valued and crappy, doesn't do anything for me, the person who is stuck with an expensive car that is not worth anything. This does nothing to make my car not a lemon, it doesn't get my job back, and it doesn't get my money back from all the repairs etc.
The dealer has a big fancy home, vacation home, mobile home, boats, ATVs, cars, SUVs, eats out a lot, gets paid vacations, and bonuses. I am stuck, broke from making repairs, no job, no 401s, and no running car........
Ok, it's maybe not quite the same thing, but in many ways it is. Wall Street has got itself in a bind. It's not because they didn't know it was coming, it was because everyone thought they could make their ungodly profits and get back out before the shit hit the fan. The financial people in Wall Street knew this, the president of the United States knew this, but everyone thought they'd be long gone before the ship went down, or maybe they figured that the government would not allow them to fail and bail them out. The president thought that he'd be out of office before the pumped up markets fail and he would leaving this mess on the next president (most likely a Democrat) and then the Republicans could use it against them in the next election. The failing market happened a bit too early, so now the Bush Administration comes up with this plan to give the very people who took advantage of deregulation to gouge the American public 700 billion dollars, from the very people that were taken advantage of, so that they can stay in business as usual.
This 700 dollar bailout does nothing to cure the problem at hand. All it will do is bring the market back up temporarily to give share holders a chance to get their money back and jump ship. After the share holders jump ship the country will be back to this same spot it is in now, except that the tax payers will be 700 dollars poorer. I believe that we need to demand from our leaders to let the market adjust itself back to responsible financial policies and reinstate regulations to keep this from happening again.
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