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There is much debate and discussion about what is at stake regarding our economy and this bailout of wealth institutions who have gorged themselves on the profits of bad loans, collateral, and absence of prudence in managing that wealth of others. But, no one is telling the truth about what is at stake, or why these politicians are working feverishly with little sleep night and day. What is at stake is what no one in Washington D.C. wants uttered in a public forum. But history is not so silent about what is keeping them all up at night.
In the public discourse, there is talk of financial gridlock, potential banking meltdown, and partial loss of jobs, savings, and pension plans. But that is the rosier side of what potentially lies before us. That rosier side is what President Bush outlined in his speech last night. There is a far darker potential here. This bleaker and more dangerous potential for failure in D.C. to get this right, is what no politician will talk about in a public venue.
Underlying our paper and financial markets is a very real world of goods, or commodities, necessary for sustaining life which are traded, and which constitute a very real Adam Smithian type of wealth foundation to all economies large and small. This level of economic structure can and will only be impaired by lack of physical transport of goods or inability to agree upon a medium of exchange with predictable valuation over time (currency).
Which means, the wealthy who own the commodities, or access to, or distribution means of, those commodities will survive a collapse of the house of cards built upon this Smithian commodity based economy. Those without control of commodity exchange and sources, will not survive or, will become the servants of those who do control the commodities. That is the theory. The reality however is something else again.
In reality, such collapses down to the commodity base level of the economy often result in revolution, violence, civil disruption, and even the murder of those with the ownership, access, or distribution capacity over real world commodities. And this is the potentiality that those like Bernanke, Paulson, and Bush are truly concerned about. This isn't politics. This isn't really even about wealth maintenance. It is about staying anarchy and revolution in its most naked and basic forms. They aren't lying about this being a precipice. They are only lying about what lies at the bottom of it: anarchy and revolution.
The founding fathers understood this all too well being revolutionaries themselves. They also knew that a well armed population was the greatest incentive for those in government and in control of wealth, to act with a sense of noblesse oblige, a duty and responsibility to the welfare of the whole nation, not just their immediate circle of family and friends.
And that is where we are at this very moment: at the precipice. One more step too far, and the people losing their savings, their jobs, their means to life, liberty and the pursuit of happiness, will revolt, take up arms, and take by force and violence what they need to keep their children fed another day, their bodies clothed another month, and a roof over their heads even if they have to cannibalize parts of it for heat and cooking.
It is truly criminal by the laws of understanding of our founding fathers, what is unfolding before our eyes. This was never supposed to happen again. The White Male Landowners given suffrage at the birth of our country were assumed to have sufficient motivation, sufficient education, and sufficient access to the goings on in government and enterprise, as to motivate them to vote and act as responsible representatives of the integrity of the system which supports them.
From the White House, to Congress, the Federal Reserve,to Investment bankers, the regulatory enforcers to the real estate brokers and sales personnel, to the customers who gambled on owning more than they could reasonably afford, this system has failed in a most basic and most fundamental way. Whether or not a fix can be fashioned to prevent personal greed and power from overruling obligation and responsibility to the welfare of the nation, we will find out in the coming days, months and year. But, the threat within we now face, is far graver than any even potentially posed by the likes of al-Queda or Islamic fundamentalism.
It will not stand that the people will bail out wealthy, powerful transgressors while suffering the current bankruptcy laws that force the lowly workers and middle class into indentured servitude to these same financial institutions and wealthy transgressors. This is the stuff of Revolution, Bastille Day, the beheading of Kings, and the trampling underfoot the agents and defenders of tyrants. This is a politician's worst nightmare. We are watching them scramble to save us all from sharing it with them, and keep their heads attached to their bodies.
12:28 PM, 09 25 2008 | Permalink
Where will the money come from to pay only the INTEREST on a $700 Billion bail-out, the $9.7 Trillion National Debt, and the $53+ Trillion nation-wide debt, much less the money to reduce the PRINCIPAL debt, when that money does not yet exist? Especially when 80% of all Americans now only own 17% of all wealth in the U.S.?
Where? Borrow and create more money out of thin air?
Not only will this bail-out not work, because it is too late, and the debt is too large.
This debt is double or triple (or more) than the Savings and Loan bail-out.
Why do we have to bail-out Wall Street to save ourselves?
I'm not buying it.
I don't know why Congress didn't laugh Henry Paulson and Ben Bernanke right out of the room.
Both of them, along with G.W. Bush (43) were telling us for years that everything was fine (rosy, in fact).
Well, it wasn't was it?
But you don't have to be a rocket scientist or a master economist to see this coming for a long time.
It's not possible to spend, borrow, and waste trillions per year without some painful consequences.
There are things that can be done to mitigate damages, but a bail-out is not the solution.
More borrowing and creating more money out of thin air will make the situation worse, by crashing the U.S. Dollar completely.
While there will be a lot of pain, a lot of jobs lost, a lot of wealth lost, etc., etc., etc., there will be MORE pain if there is a run on the U.S. Dollar.
Remember, a lot of foreigners are holding U.S. Dollars.
If inflation gets worse than it already is, the U.S. Dollar will become worthless, and the damage will be worse.
Any sort of bail-outs will make things MUCH worse, because:
The list below comes to about $1.2 Trillion in losses and some estimates place it much larger, and the FDIC won't reveal their list of 117 banks on their secret watch list (which IndyMac wasn't even on when it failed):
Look at how many have negative net assets, or close to it. Is $700 Billion enough? Probably not.
Well, here we are again, apparently having learned nothing.
But why not, when most voters repeatedly reward bad politicians with perpetual re-election?
Some say this toxic debt isn't worthless, and some profit may still be made.
HHHHhhhmmmm . . . and do you think tax-payers will get any of that supposed profit?
If the government wants to do something constructive, how about enforcing existing laws?
How about putting some real crooks behind bars?
How about stopping rampant usury and predetory loan practices (perhaps limits on some interest rates?)?
How about fixing the dishonest, usurious, inflationary, predatory monetary system (nothing more than a pyramid scheme used to extract wealth from the unwitting)?
How about making the tax system fair and less regressive?
How about upholding the U.S. Constitution?
How about a BALANCED BUDGET amemdnent, since 38 states (only 34 required) have submitted 136 BALANCED BUDGET/General Call for Article V Convention applications.
How about not starting wars based on false intelligence?
How about stopping illegal immigration that is costing tax-payers an estimated $70 Billion to $327 Billion in annual net losses?
How about not continuing the occupation of Iraq, since there are probably better ways to make the U.S. safer?
How about stopping the rampant pork-barrel, subsidies, waste, and welfare for the wealthy?
How about stopping these 10 abuses ?
How about doing something worth while for a change?
How about doing something to keep honest people and business running, instead of some huge, nebulous bail-out for banks and corporations and giving yourself another raise?
And voters, how about doing your part, and stop repeatedly rewarding bought-and-paid-for, corrupt politicians with 85%-to-90% re-election rates?
Or don't.
Perhaps the voters aren't feeling enough pain yet?
Well, don't worry, bail-out or not, significant pain and misery is already in the pipeline, and this bail-out will not only fixe the problem, but will compound it. Probably 6-to-12 months from now, when that $700 Billion (or more) has been distributed to bankers and corporations.
Perhaps enough voters will be less apathetic, complacent, and blindly partisan when enough of the voters are deep in debt , jobless , homeless , hungry , and , the U.S. Dollar isn't worth the paper it is printed on ?
At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , . . . , at least until that finally becomes too painful).
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David R. Remer replied to d.a.n at :
7:06 PM, 09 25 2008 | Permalink
There are other, and very possibly better, approaches than tax payers buying these failed mortgages. But, none has as even close the potential of consensus as the compromise now being worked on.
WaMu is edging closer to failure as credit requests are denied. Unemployment is going up as we type. Businesses are laying off knowing the declining consumer activity is going to hit their bottom line hard in the coming year. Foreign central banks and corporations are waiting with baited breath to see whether there will be a green light or red light coming from America for recommencing international investments and loans.
More and more are saying there is no rush here. They are wrong. There is only one opportunity here to ease the impending recession, and it is now. The risk of recessions is always that they worsen, and recessions by definition limit the tools available to wrestle with it.
If this rescue doesn't occur, it will be akin to being in the ring with one hand tied behind one's back fighting a two handed opponent, and pausing to invite another opponent to step into the ring as well.
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