We Ask Again-- Bail Or Bailout For Wall Street
When I heard some CNBC spokesperson of the Forces of Greed and Selfishness talking about how the Democrats' efforts to change the Paulson bailout/give away proposal-- now dubbed the Emergency Economic Stabilization Act of 2008-- have been "scaled back," I knew the bill would be even worse than I feared and that it would do little to help keep homeowners from being foreclosed on. And it won't be just holders of bad mortgages who get screwed by this. The Bush Regime seems to have come close to ensuring that President Obama will be forced to explain why he can't live up to his promises regarding health care, education, benefits for veterans, disaster relief, or anything remotely discretionary because we just can't afford it.
I just watched Lil' Adam Putnam fluffing John Boehner on TV-- and announcing they would be voting for the Paulson bill. Putnam has been a 98.7% rubber stamp for Bush's agenda, including all the heinous, reactionary initiatives that have led directly to the financial meltdown, and he's sticking with Bush on this as well. His Democratic opponent, Doug Tudor, who does not support this horrible bill calls it a symptom of our representatives being asleep at the controls. Tudor:
“Adam, of course, will vote for this bill because Roy Blount told him to. Adam will then try to tell our district that he had to hold his nose to do so, because he hates spending taxpayer money. The real question for Adam should always be, 'Why in Hell didn’t you do your job in the first place? Why has it taken you seven years and nine months to finally decide to care?' No matter Adam’s personal vote, we have seen the total death of Reaganomics in the past 10 days. Never again can the uber-wealthy like Polk’s Prince Putnam claim that deregulation and self-correcting markets are the way to go. As a friend explained to me, ‘When millions of Americans lose their homes, it's free market forces at work. But when the millionaires get into trouble, it's a financial crisis.’”
Dennis Kucinich claimed last night that the Democrats don't have enough votes to pass the bill, at least not yet. If Pelosi, Emanuel-- who has been the beneficiary of more bribes from the culprits in this mess than any other member of the House-- and Hoyer think that all the safe seats are in the bag, they probably haven't had a talk with moderate southern California Rep. Brad Sherman lately. An organizer of the "Skeptics Caucus," Sherman organized a meeting yesterday so Democrats could meet with respected economics like James Galbraith, economics professor at the University of Texas, and William Isaac, former chairman of the Federal Deposit Insurance Commission."
Speaking before the meeting, Sherman equated the Treasury Department proposal to a power-grab by the Bush administration as well as a gift to failing financial services firms.
“This is greatest shift of power to the imperial presidency and the greatest shift of wealth to a still wealthy Wall Street that anyone could imagine,” said Sherman. In addition, the California Democrat also began distributing Sunday a “Dear Colleague” letter highly critical of the relief package.
Kucinich called for more hearings on the bailout despite Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke speaking about the proposal before lawmakers last week.
“None of this has been subject to a critical analysis. We haven’t had access to the books to the people who are claiming they are going broke,” said Kucinich. He also drew the parallel between the administration’s intense urgency on the Wall Street relief package and its drive towards the conflict in Iraq.
“They rushed this Congress into the Iraq resolution and look what happened. Catastrophe for this nation as well as for the people of Iraq,” said Kucinich.
Another Florida Democrat, Alan Grayson, has the clearest arm's length analysis I've seen anywhere. Like Tudor, Grayson is running against a useless rubber stamp bribe-taking crook, Republican Ric Keller. Grayson:
The story so far . . . .
President George W. Bush, grandson of an investment banker, appoints the Chairman and CEO of Goldman Sachs, Henry Paulson, to head the Treasury Department. Goldman Sachs is the largest investment bank in America. Paulson has a personal net worth of $700 million, probably consisting largely of Goldman Sachs stock. He sees the market cap of his company drop from $100 billion to merely $60 billion. He also sees Lehman Brothers file for bankruptcy, and Merrill Lynch and Bear Stearns come close to bankruptcy before being bought at fire-sale prices by Bank of America. He knows what that means for Goldman Sachs. As Bob Dylan said, you don't need a weatherman to know which way the wind blows.
Paulson bails out Fannie Mae and Freddie Mac, and puts it in the fine print of the bailout that the Government will get out of the mortgage business, starting next year. That's great for Wall Street, and horrible for Main Street.
Paulson then waits until the very last week that Congress is in session before the election to replace Bush, and then he announces that the Government needs to buy $700 billion of "toxic" assets, or confidence in the capital markets will be endangered. And it has to happen immediately. No time for hearings, no time for amendments, right now. No explanation of who is responsible for this mess, or even who will get the money. Normally, an announcement like this would itself causes a considerable loss of confidence in the capital markets. On this occasion, however, the U.S. stock market rallies by... just over $700 billion. Paulson is so desperate to get this through Congress that he literally gets down on bended knee to Nancy Pelosi. Is he begging for our sake, or for his?
As someone said about Paulson in Washington this week (not for attribution, of course), "I wouldn't trust that guy to tell me the time of day." Why are we letting someone with a hopeless conflict of interest dole out, to his golf buddies, an amount greater than $2000 for every man, woman and child in America?
We "elect" a Texas oil man as President, and then the price of gas triples. We "elect" the head of Halliburton as Vice President, and then we are mired in a war longer than World War II, with no end in sight. We see the head of the largest investment bank appointed Treasury Secretary, and suddenly there is a "need" to fork over $700 billion in taxpayer funds to Wall Street. I'm beginning to see a pattern here.
David Sirota gets down into the weeds and tells members of Congress the top 5 reasons to vote against Paulson's bailout, mostly focussing on the widespread belief that the bill's approach is irresponsible and will make the nation's fiscal problems worse, that there are much better and safer alternative, that this approach is as fraught with sleaze and corruption as was all the trillions Congress has handed over to Bush for the Iraq war, and that the public hates the bill and will defeat otherwise safe incumbents who vote for it.
Republicans, of course, are trying to shift the blame away from predatory capitalists and vultures on Wall Street and blaming working people who sought better lives for their families through the Community Reinvestment Act, a bill that unregulated capitalists were able to use to create massive amounts of wealth... for themselves and their political servants. This slanderous, racist YouTube is spreading like a virus and distinguished historian and author Rick Perlstein compares it to the Protocols of the Elders of Zion. Fact of the matter is-- regardless of the virulent racism of people like Michele Bachmann (R-MN) and Jim DeMint (R-SC), who are spreading this garbage-- this crisis was caused by greed and avarice and the ideological prediction of right-wing politicians (and easily bribed politicians who, like Rahm Emanuel and Melissa Bean aren't right-wing per se) to deregulate industries that have proven time and time again that they need regulation-- to prevent exactly these kinds of excesses. Some facts that the Bachmann-DeMint Overdrive seems to have missed in their juggernaut to inject racism into the issue:
• CRA does not require banks or thrifts to make loans that are unsafe or unprofitable. Infact, the law stipulates that CRA lending activities must be done consistent with safe and sound banking practices. In fact, most high-cost loans were originated by lenders that did NOT have a CRA obligation and lacked federal regulatory oversight.
• According to an analysis of HMDA data in the 15 most populous U.S. metropolitan areas, non-CRA lenders made a disproportionate number of high-cost loans. In 2006, 84.3% of high-cost loans were originated by non-CRA covered entities (overall, non-CRA covered entities originated 69.6% of all mortgages) and nearly 83% of high-cost loans to low- and moderate-income individuals were originated by non-CRA covered entities (overall, non-CRA covered entities originated 67.5% of all loans to LMI individuals).
• In 2006, only one of the top 25 subprime lenders was an insured depository institution with a CRA obligation. Although a few others were mortgage/finance company affiliates of CRA covered lenders, these entities do not have a CRA obligation (i.e. Countrywide, CitiMortgage, Wells Fargo Home Mortgage). Similarly, the vast majority of the top 20 producers of risky interest-only and option ARM loans were not CRA covered lenders.
• The Community Reinvestment Act of 1977 (CRA) encourages federally insured banks and thrifts to meet the credit needs of the entire communities they serve, including low- and moderate-income areas, consistent with safe and sound banking practices. The law was enacted in response to concerns about disinvestment and evidence that some lenders were systematically denying credit to certain communities, particularly lower-income and minority neighborhoods, under a practice known as “redlining.”
• The benefits of CRA have been substantial: CRA has been credited with increasing home ownership, decent affordable rental housing, small business ownership, community development investments; and critically needed affordable financial services and products (such as remittances, low-cost banks accounts, and bank branches) in distressed communities across the nation.
• In March 2007, Federal Board Chairman Bernanke noted that CRA has helped institutions discover and enter new markets that may have been previously under-served and ignored by insured depositories.
• CRA covered institutions, for the most part, did not engage in lending practices that fueled the foreclosure epidemic and subsequent economic crisis.
But you don't have to look far to find to find Republican members of Congress who want to blame the wntire mess on poor people, particularly on poor people of color. As if on cue, arch-racist Virgil Goode, one of the most corrupt bribe-takers in Congress, was ranting and railing and blaming the Wall Street meltdown on immigrants. Tom Perriello is the progressive young Democrat, more a problem solver than any ideologue, who is running against Goode. He isn't shy about assigning blame to a corrupted Establishment that crosses party lines. "Is there any integrity left in Washington? Rep. Goode has taken over $200,000 from the lobbyists that helped caused this meltdown; he voted for the deregulation that got us here, and then yesterday had the audacity to try blaming illegal immigrants for the problem. All of a sudden, the gang up in Washington is calling for more accountability, when they had years to see this coming and didn't lift a finger. It's too late for them to get off the hook or play the reformer card-- regardless of how they end up voting on the bailout, Goode and the gang in Washington should be fired for letting corruption put our entire economy at risk."
Everyone has been buzzing about how the Republican leadership, such that it is, might not have the requisite votes to hold up their end of the deal. Well... neither do the Democrats. Paul Krugman seems to feel that Barney Frank and Chris Dodd have forced enough improvements onto it so that it's worth passing-- although he thinks it still sucks "and it won't end the crisis." That sounds ominous; maybe it will wind up in the hands of Sarah and First Dude. Matt Taibbi:
Sarah Palin is a symbol of everything that is wrong with the modern United States. As a representative of our political system, she's a new low in reptilian villainy, the ultimate cynical masterwork of puppeteers like Karl Rove. But more than that, she is a horrifying symbol of how little we ask for in return for the total surrender of our political power.
Not only is Sarah Palin a fraud, she's the tawdriest, most half-assed fraud imaginable, 20 floors below the lowest common denominator, a character too dumb even for daytime TV -and this country is going to eat her up, cheering her every step of the way. All because most Americans no longer have the energy to do anything but lie back and allow ourselves to be jacked off by the calculating thieves who run this grasping consumer paradise we call a nation.
...The great insight of the Palin VP choice is that huge chunks of American voters no longer even demand that their candidates actually have policy positions; they simply consume them as media entertainment, rooting for or against them according to the reflexive prejudices of their demographic, as they would for reality-show contestants or sitcom characters. Hicks root for hicks, moms for moms, born-agains for born-agains. Sure, there was politics in the Palin speech, but it was all either silly lies or merely incidental fluffery buttressing the theatrical performance. A classic example of what was at work here came when Palin proudly introduced her Down syndrome baby, Trig, then stared into the camera and somberly promised parents of special-needs kids that they would "have a friend and advocate in the White House." This was about a half-hour before she raised her hands in triumph with McCain, a man who voted against increasing funding for special-needs education.
Palin's charge that "government is too big" and that Obama "wants to grow it" was similarly preposterous. Not only did her party just preside over the largest government expansion since LBJ, but Palin herself has been a typical Bush-era Republican, borrowing and spending beyond her means. Her great legacy as mayor of Wasilla was the construction of a $14.7 million hockey arena in a city with an annual budget of $20 million; Palin OK'd a bond issue for the project before the land had been secured, leading to a protracted legal mess that ultimately forced taxpayers to pay more than six times the original market price for property the city ended up having to seize from a private citizen using eminent domain. Better yet, Palin ended up paying for the fucking thing with a 25 percent increase in the city sales tax. But in her speech, of course, Palin presented herself as the enemy of tax increases, righteously bemoaning that "taxes are too high," and Obama "wants to raise them."
Yeah, why don't we all march to the polls, vote for McCain, watch him die and leave Sarah to solve the financial crisis! I actually lived through soon to be 8 years old stolen Bush Regime without moving back to Amsterdam. But I can barely stomach seeing this one on my TV screen.