The Mother of All Bail-Outs?
(August 14, 2007)
Correspondent Zeus Y. has insightfully summarized what many of us sense: that the Powers That Be
are gearing up to save the financial structure which has provided such rich rewards to the nation's
"Unprecedented" may be the word I might use to describe for the possibility that the Federal
Reserve and government apparatchiks will baldly and simply overtly "change the score" on the
economic scoreboard to both serve financiers and bail them out of their circular firing squad.
[It’s been done in the past but covertly.] Yes homeowners who were duped into buying homes way
beyond their means will suffer probable bankruptcy, but they don’t have much to lose in the sense
that many didn’t have a downpayment and some may have even extracted equity.
Very well said, Zeus. Thank you very much for a crystal-clear read on the underlying realities
of our political and financial systems.
Financiers seems to have moved from a pyramid scheme to a game of “hot potato” or perhaps "musical
chairs." So filled with greed and hubris from the massive fees they could charge for every
transaction and the cheap money merry-go-round provided by the private Federal Reserve Board,
they gave out loans sliced and diced them, repackaged them and shipped them out...to each other! In so doing they ended up screwing themselves as well as the American public. Before, in the Depression and during wars, these same financiers and industrialist could stand to gain both power and money by allowing a contraction of supply and a stimulation of misery. But now their books are interconnected and they don’t really have someone to sucker, er, dump their liability on. With so many years of anti-regulatory fervor and even aiding and abetting straight out fraud, this group of so-called elites must have drunk their own Kool-Aid. Now faced with the prospect of having to experience actual consequences (novel concept, huh), they are looking for Daddy to expunge their proverbial drunk driving arrest.
First they try to pass it off as "helping the little man"... All those poor people going to lose
their homes if you don’t used taxpayer money to bail us out. Then, when that doesn’t work, they
simply say, "liquidity crisis". The "fundamentals are sound"; it’s really about the public’s
irrational fear of buying our bullshit, er, products, and we simply need a cash infusion to get
things going, you know, like Bush and Co. gave to the airlines, the 20 – 40 billion dollars that
went straight into the pockets of upper management. How about some other tricks. Did you see
them try to get Fannie Mae and Freddie Mac to change their rules to buy Jumbo loans, trying to
offload the lemons on the American taxpayer again. “Full faith and credit” should be a phrase
banned around these guys.
This is what I mean by extortion. These blokes hold a gun to the head of the American public,
all the while claiming only that they want to save that same public. How about putting that gun
down and taking a good look at yourself, pals! You are a disgrace. Jim Cramer screams about his
poor financial buddies going down. “Lower interest rates, Fed. I don’t want my rich decadent
friends to face their due. They have FAMILIES for Christ sake.” So far the American people are
refusing to play ball with this rigged game. That may call for overt and drastic measures.
These so-called financial elites are so crass and intoxicated with the latitude granted them by their CEO President, it looks like they won’t even bother to rig a few calls in the game or penalize the other team (the American public) unfairly. At this point, it looks like that won’t be enough, they are so far behind. They’re simply going to try to change the score. If this happens, I have no idea what is going to happen. Will we just accept it? No October Surprise and Crash because a few trillion dollars are simply pumped into the system and the interest rates are lowered? Woo boy.
Why don’t they just get it over with and say, "We need about a half-trillion dollar bailout for
our buddies, from you, the taxpayer. If you don’t pay up, you won’t be able to buy a house,
we’ll fire your asses, spiking unemployment (because we would have to cut back on costs,
naturally), and we’ll generally make your life miserable. Pay up if you want "protection."
It is not a “decreasing appetite for risk” that is gumming up the works; it’s a system that has
been set up to have no consequence, which touts the myth of a risk-free profit that is bringing
things down. After all, what risk is there in giving out fraudulent loans and then passing them
off as AAA rated mortgage-backed securities? I get the profit from transaction fees and sale of
the mortgage securities. Some other sucker can take the shaft.
Oops you mean I also used my ill-gotten gains to lend out money to hedge funds (looking for big
interest) which are now collapsing and won’t be able to pay me back, but, but, but... The
cannibalism of elites can be very ugly, but they always end up coordinating in the end and
turning their appetites on the American tax purse. Internalize profits, externalize liabilities.
If you have the right men in government, you can even commit open and outright fraud and produce
nasty, shoddy work as Halliburton did in Iraq, by the government’s own assessment, and still get
a quarter-billion dollar bonus. “Heckuva job ______ (fill in the blank). You’re one of us."
All the while that same taxpayer now has extreme strictures placed upon his or her ability to file
bankruptcy and come out with a clean slate, even though two-thirds of bankruptcies are the result
of real emergencies (failing health, lost job, or divorce), not the fabricated ones of the finance
industry. The simultaneous mendacity, contempt, and dependence toward the American citizen is a
force to behold. I think the best way we may have of calling their bluff, is simply saying,
"no bailout". They have to take the pain even if that means pain for us. As a follow-up I think
we should get real practical and creative about creating our own circle lending, our own markets
(as with farmers markets, etc.) that cut out these non-productive, and indeed, life-draining,
parasites. In the words that they not doubt use to condemn the homeless they pass on the way to
their high-priced pseudo-profession. "Get a job, a real job!"
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