Does it gall anyone else?

[kentuck]

That our Democratic Party is leading the charge to bail out the Big Banks and financial institutions that got us into the mess in the first place? Normally, we would expect the Republican Party to be the major defenders of these criminals. That we gave them $350 billion dollars with nary a bit of oversight? That they passed out that taxpayer money with big bonuses,like it was Halloween treats or Christmas presents. At the same time, the same taxpayers were being laid off with little hope for the future?

Does it seem to anyone else that our Democratic Party was acting like Republicans? Defending the Big Banks and the wealthy over the average American? I heard no Democrats ask the Big Bankers for an accounting of the money. I heard no Democrats tell the big financiers that when we give you taxpayer money, we own your asses! They appear afraid to use the word "nationalized"?

Just as the GOP is no longer the Party of Lincoln, the Democratic Party is no longer the Party of FDR. "Well, what do you expect them to do, let them go under"?? Well, yes. Yes! Yes! Let the thieves go under and save our good banks. Not all of them were involved in these activities. I am embarrassed that our Party is spit-shining the shoes of the wealthy class, at the expense of the rest of us. Yes, it is we that will suffer the consequences. Then they will say, "Think of how bad it would have been...? Bullshit!! This is not my Democratic Party.

[Captain Hilts]

1. That's "economic royalists."

[On the Road]

2. No, Not at All

In fact, I am gratified that the Democrats were responsible enough to support Paulsen's plan despite its unpopularity and partisan temptations. The idiotic GOP would have taken the whole economy down due to a misguided belief in unregulated markets.

If 90% of the financial industry had failed, all of us would have suffered much more than anything we're experiencing now. The so-called bailout consisted mostly of buying equity in the banks which will be paid back provided that they don't fail.

Yes, bank executives are being greedy and using money in irresponsible ways just like they have been doing for years. It makes me furious too, but it is a private matter of corporate governance. One advantage of partial government ownership is that now the feds have a stake in the companies and Obama has a rationale for intervening. Which he is starting to do.

[kentuck]

3. Of course, we have to believe the premise made by the bankers...

that the whole economy would have gone down the tubes if we had not given them the money? And it may still go down the tubes if we don't give them $2 trillion dollars more? You do believe them, don't you? Why would they lie to us?

[On the Road]

80. You Don't Have to Take Their Word for It

Look at how the financial markets have reacted over a period of time.

Stock prices, interbank lending, and all the other indicators showed that analysts over the world expected massive bankruptcies in September. That crisis began subsiding when Treasury began its string of interventions.

It would have been utterly perverse for executives at Bear Stearns, Lehman, and AIG to see their entire personal holdings become worthless simply because they wanted government money. Same for companies like Merrill that were taken over at pennies on the dollar. Nothing in the TARP money even begins to make up for the massive losses that had already taken place. If you look at the week-by-week developments last year all over the world, it's very difficult to think of it as an elaborate charade.

And yes, if a sizable chunk of the financial industry fails, it *will* take the economy down. I can't find a succinct argument to demonstrate this, but think of 1980. The prime rate briefly went to 21%, making loans unaffordable for many people and businesses. The effect is magnified if most of the lenders have gone out of business. Will try to think of a better argument, but all other industries depend on the existence of a financial sector.

[Joe Chi Minh]

81. Why not, instead, give the bail-out money to the responsible banks,

to encourage them to extend credit? Instead of to the incompetents and "losers"? The banking sector is not a place for "loser" banks and crooked and inept senior management.

I think people would have been a lot happier, if they thought that their money was either given to nationalised banks or to those that had proved themsleves capable of showing "due diligence", to take care of the nation's credit needs; provided that senior management were prevented from succumbing to the culture of personal pillage to which their fallen associates had.

As it is, that worst scenario has been pursued, so that the malefactors could entrench themselves still more securely, as entities that are "too big to be allowed to go under". And on the tax-payers' tab, when the bail-out money had been intended to be used for loans.

If they then need extra senior staff to handle the additional business, prosecute the malefactors and have them work there on probation on a bank teller's wages. As long as they succeed they remain out of prison. Once the company fails to actively prosper, for whatever reason, they complete the jail-term (hard time) to which the judge would have originally sentenced them.

[On the Road]

83. Unfortunately,

the Big Four *are* too big to go under.

It's a different industry from, say, manufacturing, where it possible for Chrysler to declare bankruptcy and GM and Ford to actually gain from their competitor's loss. Same with retail -- Target and Wal-Mart can succeed while Sears and Montgomery Ward go out of business.

But banks are interconnected. If three of the Big Four went down, it would drag all the others down in short order, including the responsible ones. We almost saw that happen in September.

The fact is, banks which acted more responsibly are also in trouble and are nowhere near the size of the largest troubled banks. If if those banks got the full $350B, you couldn't immediately channel the nation's lending through a limited group of medium-sized banks with fewer branch offices and a limited staff and superstructure.

As far as penalties, the most significant one is that the executives have seen the value of their company stock disappear, and a lot of them have lost their jobs and more. The companies have had to give away a sizable chunk of ownership to the federal government. I hope there are prosecutions if these companies or individual managers broke the law.

The TARP funds have not vanished never to return. As long as the recipients stay in business, the money will come back:

The nearest parallel action the federal government has taken was in investments made by the Reconstruction Finance Corporation (RFC) in the 1930s. The RFC, an agency chartered during the Herbert Hoover administration in 1932, made loans to distressed banks and bought stock in 6,000 banks, totalling $1.3 billion. In 2008 dollars, that would amount to $200 billion. When the economy had stabilized, the government sold its bank stock to private investors or the banks, and is estimated to have received approximately the same amount previously invested.

http://en.wikipedia.org/wiki/Troubled_Assets_Relief_Program

[Joe Chi Minh]

98. Shame the public didn't continue to benefit. Blue-chip oufits, the banks always seem to have been

milch cows usuriously-operated for the benefit of the rich, to the detriment of the masses.

[JDPriestly]

110. I have an elderly friend whose entire savings of less than $100,000

has become worth far less than it was thanks to the management of the big brokerage, mortgage and banking companies. Now that is perverse. That the top, top, top money managers who engineered this whole disaster lose their personal holdings, that's justice, not perversion. Justice.

My elderly friend is looking for a roommate. Maybe some of those bank managers could start looking for housemates to help share the expenses of keeping up their mansions. Now, there's a solution to the financial crisis.

[bkkyosemite]

111. "why would they lie to us"

:rofl:

[4 t 4]

5. It bothers me big time

it's at the root of so much of my frustration. They ripped us off royally with that bullshit bail out it didn't seem to do one piece of good for any of the people and they still gave out their giant bonuses and they won't account for a dime of the money.If any single part is legitimate why won't they disclose where it went ? There is not one single second of any day I don't think it would have been better to give it to us. Paulson demanded that money and now he's just gone, Poof, gone and we continue to struggle and lose jobs and lives.

[truedelphi]

65. Now calm down. After all, Kucinich had his staff

Research the first tranch of BailOut payments - that is, that first 350 Billion Dolalrs worth of taxpayer monies successfully assisted 457 mortgage holders in this country.

Pretty good record, right? I mean, what if they had found out that it was only four or five or even 4 by 4 households that were helped!

(I hope adding the sarcasm tag is not necessary.)

[On the Road]

82. It Bothers Me a Lot, Too

that many of the remaining Wall Street executives seem to be rewarding themselves lavishly as if nothing had happened.

However, you have to separate that from making the right policy decision. This is the industry that exists, and it either had to be propped up or allowed to fail. There was the equivalent of a run on the banking sytem in September -- the kind of panic that spreads quickly with devastating results. It had to be stemmed, and the Treasury intervention stopped it.

The OP was not so much about whether the banks were managed responsibly or whether the program could have been designed better. It was about Congressional Democrats supporting the Emergency Economic Stabilization Act of 2008. AFAIC, the Democrats acted responsibly by supporting the bill.

[4 t 4]

54. So you think it has worked ?

[On the Road]

78. The Part That Worked

was that the financial system did not fail. The weeks beginning with the Lehman failure were extraordinarily scary times. The cascade of banruptcies stopped and is at least controllable now. From that point of view, the Bear and AIG bailouts worked and saved a financial collapse.

I've seen some charts which demonstrate (to me) how serious the situation was. Am asking around on some stock boards and will post them if I find them. If nothing else, the stock prices for financial companies factor in a likihood of bankruptcy -- the extrardinarily depressed prices of major banks show just how likely investors and analysts thought that scenario was.

On Edit: This chart may be kind of opaque, it shows how interbank lending dried up until the fed intervention on Sep 18:



--------------------

After the immediate crisis, however, the TARP money was provided for a different purpose, namely to stimulate lending. That has had more arguable results. Some of the recipients were not on the verge of bankruptcy and had to be presuaded to take the money. A lot of the recipients carried on as they did before, giving management unnecessarily large bonuses, making acquisitions, and not increasing lending.

It's not wasted money -- the government bought equity with those funds and as long as the companies survive taxpayers should make a modest profit. The TARP money probably stabilized the companies, but didn't have the full benefit that its proponents wanted.

[Truth2Tell]

85. asking around on some stock boards

lol :rofl:

I suppose if your measure of the health of our economy is tied to the artificial weath of our ponzi scheme stock market then you could argue that the bailout bought a little bit of time for the racket to continue before the inevitable collapse.

[On the Road]

124. I Was Asking Around for a Chart

that would demonstate to a poster like you how close the financial system came to collapse in September. That, however, presumes an ability to absorb what the numbers are saying.

The interbank lending spike was as close as I could come. There may be better indicators, but I haven't found them.

[defendandprotect]

100. When you bail out companies, you OWN them. Let's just NATIONALIZE them . . .

as other nations do.

Nationalize oil companies--

Nationalize auto manufacturers who have been in alliance with them and get

the workers going making all electric cars which we desperately need!!

[Riverman]

115. Yes Nationalize them and Arrest the Thieves!

Try them and if convicted jail them for the longest legal sentence at the federal prison for the most dangerous crimminals. These theives have ruined many lives financially and some have committed suicide, or been found dead in their apartments due to lack of funds to pay the heating oil bill and on and on!

[JDPriestly]

112. TARP delayed the damage, but it did not help the fundamentals

of our economy, and that is where our problem is -- in the fundamentals -- the lost value of ordinary Americans' savings, home equity, jobs, everything.

As long as people see economic entities like banks as "too big to fail" and do not recognize the basic principle of life -- that the "big things" are just made of many tiny little things and that if you take care of the little things the big ones take care of themselves, the economy will not improve.

Yesterday, the message on my tea bag was a quote from Babe Ruth that went something like this: I have one superstition. When I hit a home run, I always make sure I touch every base.

The "too big to fail banks" struck out because they were too big and too full of themselves to touch every base. The banks need to be reduced to manageable sizes, and they need to be held accountable for touching every base.

Meanwhile, the government needs to focus on touching all its bases -- like helping mortgage holders, funding infrastructure projects that provide people jobs and educating and informing people about precisely what they are doing and how. If they touch all the bases that matter to ordinary people and forget about hitting home runs with the banks, we will get our economy back on track.

[On the Road]

125. I Believe I Understand Where You're Coming From

an agree with a lot of it. The small things are indeed important, and ultimately they were responsible for a lot of the crisis -- loan officers pressuring appraisers, appraisers stretching estimates to get more business, management looking the other way because the loans were being bundled and resold. It was human nature, but the system has to be controlled.

The government can't legislate altruistic motives, but it can set regulations. And re-regulation is badly needed. Reinstating Glass-Steagall is a start. Addressing off-balance-sheet liabilities is another. Addressing the destabilizing mark-to-market rules may be involved, although it's very tricky. Preventing immediate bundling and reselling of mortgages is another (although the market may have put a damper on that process). Americans are relatively law-abiding in the scheme of things and regulations has worked pretty well in the past before the blind rush to deregulation took over.

But some of the solution has to be at the macro level. If three of the big four fail, we are in a depression and there is no way to get the economy back on track for years. It is worth deficits, inflation, taxation, and even propping up irresponsible companies to avoid that scenario. It should be in a way that is friendliest to the average taxpayer.

Most posters here seem to think the collapse of the financial sector is inevitable. I am not ready to concede that yet. The panic in September has subsided, and the triple stimulus -- fiscal, monetary, and commodity -- is almost unprecedented. I sure hope we don't over the edge -- the only ones who be unscathed will be the vultures and Donald Trumps of the world.

[JDPriestly]

127. Thanks for the thoughtful answer.

[On the Road]

128. And Thank You for the Thoughtful Post

When supporting something as unpopular as the TARP program, I tend to cringe when going back to look at replies.

:-)

But someone has to do it -- after all, our president and party leaders are behind it, so it shouldn't be an outlawed position here.

[truedelphi]

64. Please get an education. Paulson is the problem. Greenspan, Bernacke are the problem

Ron Paul, Kucinich, Issa, Maxine Waters, and others understand that the banks insisted on being allowed to become a very poorly-run casino, minus the free drinks and cheap Prime Rib dinners. The bets they allowed the "gambling class" to make were against the casino bank, and when the casinos went belly up - well, now we the taxpayers are supposed to offer up the money to pay off those in the "gambling class" who were betting that the system would fail.

The derivative losses that these bets entail are anywhere from $ 110 to 550 TRILLION dollars. (Meanwhile our GNP during healthy economic times is only around $ 13 Trillion Bucks - do the math - we simply cannot afford to keep on bailing out those who treat us like chumps.)

And if there are Dems who think that bailing the nasty casino out is going to do anything but worsen the problem, they are idiots or else they are bought out. (I am not sure which is worse.)

YOU SAY: "If 90% of the financial industry had failed, all of us would have suffered much more than anything we're experiencing now. The so-called bailout consisted mostly of buying equity in the banks which will be paid back provided that they don't fail."

The fact is that right now over 90% of the economy has failed. Since the economy is currently owned lock stock and barrel by the banker/casino class.

Wall Street owns the media, it controls the price of gas and oil, it controls the lobbyists who have Congress in their back pocket and thus successfully engineered the meme that "Hey Guys and Gals in Congress, just this one time we will ask that this one big entity, AIG, is too big to fail, you better bail it out. No now this other entity, BAnk of America needs an infusion. And so does this one and this one and this one..."

when the derivative losses are factored in, not only has 90% of the economy failed, a negative 4200 % of our economy is on the line - when or until Obama and the others who are deluded (or in on it) wake up and tell the bankers, er, the casino owners, that they have only themselves to blame and that no, The American People are not liable for their glibness is getting rid of deregulation.

[Wiley50]

95. Rubin and Summers fought like hell to keep derivitives from being regulated

Big problem

[defendandprotect]

99. BIG corporate-influence problem . . .

on Democratic Party . . . didn't have to be.

Rubin is Goldman Saks

[defendandprotect]

101. Great post and everyone should read it---!!! And believe it --!!!

[JackRiddler]

70. The whole economy was taken down -- and the bailouts are the kill-shot.

The big banks will fail. The bailout failed, predictably, and has been followed by more bailouts, and none of it will do any good. In reality, the bailouts were never designed to save the banks, because they cannot be saved. Their liabilities exceed the value of all assets on the planet. (Saving them is not good for us: it merely lets them maintain their dead hand on our lives. We can use the bailout funds to set up a new national credit system instead. Anyone who instead gives it to thieves is being irresponsible.)

The current bailouts are just the last haul the banks could grab. Paying themselves getaway bonuses. Small as that seems, it is very much the point to the individuals who run the show and get the prizes.

Compare it to how poachers will kill a four-ton elephant, just for the lousy tusks. Are there people who would burn the world just to make a few billion out of it for themselves? Obviously. They are the ruling class. We just spent eight years moaning about a whole gang of them, who were in power!

So you're the one paving the way to further disaster. Misguidedly, I assume: 

The banks will fail, the bailouts will (further) bankrupt the nation as a whole, Obama and the Democrats will be blamed for this bullshit (even though Republicans are equally responsible for the crisis), and the Republicans will profile themselves as the populist opposition and make a comeback.

Remember this in 2010 if Obama continues with the Paulson-Geithner-Bernanke strategy!

[defendandprotect]

93. NATIONALIZE the banks . . . our Treasury has been bankrupted . ..

let's stop PRINTING money to bail out capitalists!

[GeorgeGist]

76. I don't have the gall to believe ...

that greedy financial institutions should survive.

[Still Sensible]

4. I promise you

if the banks fail, the pain in this country will be so much greater than it is now--bad as it is. Our party is NOT acting like republicans, we're trying to clean up the mess.

[kentuck]

8. Banks fail everyday...

it's just that these big foreign investment banks were too big to fail. At least, that is what they told us. After all, they are the experts. Why should we question them? Mark it down. This pay-off or bailout, or whatever we wish to call it, will go on for years and years and the living standards of average Americans will continue to drop as they squeeze every ounce of blood out of our bodies...

[Still Sensible]

21. But not all at once

[kentuck]

34. Why do you think all the banks would fail at once??

Most banks are solvent, from what I read. Of course, CitiGroup, WaMu, Lehman Bros, Goldman-Sachs, Merril Lynch and other big investment firms were in aboove their head. They were too big to fail, we were told. I think once we bailed out the first wave, that was really what Paulsen and others were most concerned about when they said the world was going to end. Anything they squeeze out of the taxpayers after that is gravy for them, in my opinion. At least, they have shown us no evidence where the money has gone or will go? They want to be bailed out but they don't want to be nationalized. They want to continue their big bonuses and shenanigans.

[Still Sensible]

39. I am all for cutting out the bonuses and other shenanigans

and they wouldn't fall at once, just in rapid succession. What is important in any additional bank bailout IMO is...

first, it's a loan not a grant
second, assets or equity so the taxpayers have a chance to get the money back
third, the priority has to be reworking mortgages to keep people in their homes
fourth, no bonuses or stock options that are not tied to a progress/payback schedule
fifth, strict limitations against banks jacking up interest rates or inventing new 'fees'

But, make no mistake, if the problem wasn't real, we wouldn't be in this position.

[kentuck]

42. Oh, the problem was real...

With a few big gambling institutions at the top. But, not our entire system.

[JDPriestly]

119. The banks are all connected. That's the problem.

[kentuck]

126. Just as Obama said...

"some are going to fail..."

We cannot save them all.

[defendandprotect]

102. No ... government insurance is intended to cover the unexpected/the ONE theft . . .

Not a world class S&L scandal based on overall theft and embezzlement ---

Nor, anything like these bailouts are covering ---

Nationalize them -- we own them!

[Greyhound]

45. So tell us, just what would happen in your estimation? n/t

[4 t 4]

56. And can you telll us which have

not failed even after the bail Out They are NOT lending money to the people if that is not failing I don't know what is. What do you consider failing? This should be all about the people.

[defendandprotect]

94. Not if we nationalize the banks -- as we should also do with any auto company that fails ---

STOP PRINTING MONEY TO BAIL OUT CORRUPT CAPITALISM!!

[patrice]

6. My Libertarian attorney spouse just informed me that NYT and others have been WRONG saying that

TARP funds have been going to cover bonuses. He says Paulsen's problem has been that what needs to be done, to stabilize the economy, is that he has to make good on the sales commission CONTRACTS between the banks and those whom they hired to move the securities that caused the whole problem.

I said to him that it doesn't matter to most Americans whether our money is going to bonuses or (contractual) sales commissions; our criticism has to do with those who are supposed to be doing business the way that business NEEDS to be done, so that business survives and all of us have the jobs we want. Our problem is that those who were in charge of doing business, according to the principles that they preach to everyone else, did BAD business and now, though we didn't have that much to say about what was going on, we are the ones who have to pay for it, commissions or bonuses, it's all the same money to us.

My husband does have a point, though, I guess I should be glad,

IF

it works, that the money is going to shore up the basics of our economy, i.e. contracts, rather than the ice cream which would be bonuses.

[kentuck]

9. That's like saying...

since we got the pure heroin, no matter how many people it killed, we still have to pay the pushers for the product?

[patrice]

11. My Paul says it's about contracts and whether they are honored or not. If they aren't, there would

be NO economy to begin with. That makes sense to me.

I guess one of the distinguishing factors would be different KINDS of contracts with it being necessary to honor whatever is written into contracts for sales commissions before we honor contracts for things like bonuses.

It does make sense that if contractual law is not honored, there would be no way of even having an economy.

P.S. My Paul is a retired corporate attorney who worked for an international telecom before he was laid-off and now teaches corporate law part-time.

[Jim Sagle]

74. Contractual law? What kind of swill are you trying to feed us?

Were these contracts signed or guaranteed by the government? If not, then the taxpayers have no obligation.

Period.

[acmavm]

86. The 'contracts' were dirty in the first place. Not only did they loan

money to anybody and everybody regardless of their ability to pay, they bet that those loans would fail. Then they sold those bets. Over and over and over. One bad mortgage could be resold many times. And they did. THAT'S NOT BANKING, THAT'S CRIMINAL ACTIVITY. I cannot sell something that's bad in the first place and then bet that it would go bad, and then sell that bet multiple times. No one I know would be stupid enough, or hopefully crooked enough but fork over the money.

Those Wall Street SOBs need to be put in a cell.

[valerief]

91. Hey, the constitution isn't honored! Nothing is honored now except honor among thieves! nt

[JDPriestly]

122. As I said above, when companies are bankrupt, contracts are only

honored to the extent that the court allows. Yes, contracts should be honored, but the Founding Fathers specifically grant to Congress the authority to create Bankruptcy Courts and enact bankruptcy laws -- so contacts are not untouchable.

Happens all the time.

[patrice]

13. Your point is made, though, what we have here are Business leaders who were hooked

on dysfunctional business practices and now we're supposed to enable their habit further, without any oversight (and the reason there can be no oversight is because they are PRIVATE businesses, so we can't tell them what to do unless we Nationalize them).

I say let's Nationalize them! :nuke:

[terisan]

33. Exactly. The purchasers of these contracts had a due diligence responsibility - we are

The Dems politicians have revealed themselves as big bank/big corporation backers and we need to push back.

Where is the bailout money going-----to overseas investors, to enable Wall Street to to de-capitalize US and invest overseas?

In a week the next Big Bank Bailout plan is supposed to be released--the administration will have some phony cover story that it is going to put some controls on bonuses but it will all be bogus.

We are being played---we get to own the so-called toxic assets and the criminals-government enablers included go free to steal again.

I believe we have to make the administration state exactly what the bailout is intended to accomplish (in logical terms-not the summary statements they have been making)
what is the liklihood of success, what alternative plans have they come up with, how will we be made whole if we take on the burden of their failure, and a timeline.

----and something new: a personal guarantee--just like the banks demand from small businesses.

Let each menber of the administration sign it and each member of Congress along with their spouses. Time to pledge those personal fortunes-McCaskill alone is worth between 20-40 million. Her new husband made a fortune on low income housing and perhaps is looking forward to goodies from the stimulus package). They may be personally very nice people but they have enormous conflicts of interest.

The wealth of some of these Senators is mind-boggling and the corporations they are invested in put the lie to meaningful reform.

These banks have already failed; they are dried out cockroach shells.

If we pour more dollars into them, it increases the liklihood that the US will default for the 1st time in our history and become wards of the International Monetary Fund-I remember the hell Argentina went through and the IMF is now feeding on Iceland.

If we do not bail them out we have a good chance of surviving.

[kentuck]

37. I tend to agree with your premise.

We just have to figure out how to get there from here. After all, Argentina survived.

[terisan]

38. True. Please keep posting on how to do it-you have good ideas.(and forgive my rage)

I am still in the betrayed and incensed stage but moving forward to logic solutions.

[wolfgangmo]

113. Of course they survived.

They still had infrastructure and the people resources. Once they got the debt off their back they thrived. Argentina is doing better than ever, at least until our CIA and University of Chicago economist screw it up like they did with Chile.

On the other hand Chile seems to have been just a rehearsal to the real con, the USA.

[valerief]

90. That's how I read that, too! nt

[defendandprotect]

96. NATIONALIZING the banks is the answer -- not printing money to bail out corrupt capitalism!!

[JDPriestly]

121. I disagree with your husband.

The banks were basically bankrupt. Had they gone to bankruptcy court, the court would have given the creditors including those people to whom the banks owed money commissions, pennies on the dollar.

When the U.S. government bailed out those bankrupt banks, it should have imposed the same kinds of pay-out requirements that a bankruptcy court would have as to the creditors of the bank. The banks' creditors should have been paid pennies on the dollar. Bank depositors should be protected by the FDIC.

[blues90]

7. I have similar thought's about it.

It was the Dems who voted to hand wall street and the banks the bailout with no oversight and what have they done with the money, no one really knows.

Then I read that only 350 billion was handed out so where is the other 350 billion that was handed over to the Obama admin? I have not read anything about that since it was broadcast as news.

No the Dems did have their chance to shut this shit down before it reached this point by impeachment but they for reasons un-known which we will never know did not impeach.

It strikes me odd that this enormous bailout came just weeks before the bush admin left office but comes as no surprise.

No, this is not the Dem party I used to know, it is not FDR no matter how they attempt to spin it into this and these are far from the same times or conditions when FDR was president and this country is so far removed from any resemblance of those times that they cannot be compared yet there is the attempt to compare them.

Even during FDR's time when this country had a much smaller population and we had for the most part if not all american factories and jobs and products made here it still took years to remedy a much simpler mass of problems than we are faced with now. I was the war that took us out of the depression and american resources that did the work.

Now we have jack fuck all nothing here to get us out of this mess other than hope it works out and it's all in the hands of politicians who have their own agenda which is mainly to look good and keep their seat. Yet many do not look so very good who are still in there , many who did nothing when they had a chance.

[kentuck]

10. And we don't want to admit it...

But most of our Congressmen are dumber than a box of rocks. They are lemmings.

[az chela]

17. I find it amazing how really stupid most of them are

I guess they have to be so they can be led around by their nose

[bertman]

69. I don't think it's that our congress critters are stupid. We are asking them to make

critical decisions on hundreds of different laws ranging from topics as diverse as involving our military in wars, to providing meals for preschool kids who have no money, to energy usage, to constitutional law, to high finance, to labor law, to scientific studies, and on and on and on.

There is no way any one human being can be well-acquainted with even a tiny segment of these topics. So, our representatives rely upon staff members and experts to inform them. Unfortunately, the experts are often experts for only one element, meaning they are lobbyists for the interests who can afford them.

We ask a lot of our national representatives. I think most of them try to do the right thing but are often swamped by the sheer volume and scope of the decisions they must make.

[defendandprotect]

97. That's like saying that Bush/Cheney were dumb . . .

they weren't -- they were corrupt!

Our government and elected officials have been bought over decades --

as has been clear to everyone for decades! And, the Democratic Party

has been co-opted by corporate power --

The DLC is the corporate-wing of the Democratic Party --!!!

[ColbertWatcher]

24. "(it) was the war that took us out of the depression"

Actually it was the spending that got us out.

We just happened to spend it on war-related industries.

We don't have to cling to that myth any longer, nor do we have to replicate it to get us out of this new, GOP-created economic mess.

[Mike 03]

12. No, but only for the same reason Paul Krugman is giving, that the alternative is

far, far worse than most people can imagine.

Neither option is good, but one is worse than the other.

[patrice]

14. Yes, a country that has no expectation that contracts will be honored CAN'T do business.

I do wonder if there isn't something in this that makes it necessary to know HOW the contracts are being honored. I don't really see anyone willing to walk away from money that they NEED to shore up some other investments just because it's bonuses and not basic commissions.

[Mike 03]

18. Well, you are definitely bringing up some crucial issues that matter a lot

The whole bonus thing drives me nuts, and I don't know if this was part of the plan.

IMO, financial institutions should cut in this order:

1. Bonuses first
2. Dividends
3. Layoffs (sad, but if they are necessary it should be done)

Or maybe two and three should be reversed. I don't know.

This is such a huge and unfamiliar situation, I think a lot of people are learning as we move through this.

[patrice]

16. Does make me think of that one cartoon that you see around: Two guys holding guns to each

other's heads and the caption is: CAPITALISM

[Mike 03]

26. LOL. That is a cartoon I could appreciate. They say if something

makes you smirk or laugh, it's because there is so much truth in it.

[az chela]

15. As USUAL KENTUCK YOU ARE RIGHT ON!!!!

[Mike 03]

19. They are trying to avoid bank failures and bank runs.

I agree with a lot of what you are saying, but I also believe that we could have a disaster if we had allowed institutions like Bank of America or J.P. Morgan to fail, or even worse, the runs on the money market funds. It would have been a catastrophe.

P.S.

I would be in favor of a "clawback" if it is legally possible, to terminate and recoup all of the bonuses paid over the last two months.

[bahrbearian]

20. My repubican brother started a bank a few years ago, with a dozen other investors,

now they are closing the doors, of course he is trying to hide all his assets, Quit Claiming property to his children. Talk about hypocrites.

[4 t 4]

23. but again the most simple question to me is

if nothing is dirty about where the funds went Why won't they disclose where it is being spent ? That should be the first red flag.

[kentuck]

27. And do we, as taxpayers, have a right to know ...?

where every penny of our taxpayer dollar is spent? I think so. I think Paulsen lied to Congress. He had no intention of spending the money on "troubled assets" as he told the Congress. He should be in jail, in my opinion, right next to Karl Rove and Dick Cheney. Bush deserves something besides jail.

[wolfgangmo]

114. RE: your republican brother

TURN HIS ASS IN. CALL THE IRS AND THE FBI AND TELL THEM.

If you don't then you are as guilty as you are.

[Mike 03]

22. Kick and Rec, too. This is a great topic and discussion. NT.

[Sarah Ibarruri]

25. We should bail them out but slam them with regulations out the wazoo

We should regulate everything. This must not be allowed to happen again.

[BlooInBloo]

28. Yup. And take away the executives' money.

EDIT: And prohibit them from ever working in the industry ever again.

[Sarah Ibarruri]

29. Absolutely! That would be the only fair thing to do. They're trash. nt

[kentuck]

30. We did that after the Great Depression...

and it took them about 70 years to figure out how to get around the regulations...but they did...

[BlooInBloo]

31. And it worked well - until they removed the regulations in the 70s and 80s...

Moral: Don't remove the regulations, and make them a bit tighter.

[Sarah Ibarruri]

43. Exactly! nt

[Sarah Ibarruri]

32. Oh they didn't get around the regulations. Nixon, Reagan, and the other shitheads removed the regs

May they be rotting in hell.

[BlooInBloo]

44. Phil Gramm was the father of it all.

[defendandprotect]

89. No... they got deregulation by "buying government" and legislators . . .

by co-opting the Democratic Party --

DLC is corporate-wing of the Democratic Party -- and now they're in the White Hosue via

Emmanuel!

Many, including Ralph Nader, have been telling us about the "buying of government" for

more than 30 years now!!

Anyone listening?

Here's the catch . . . if we can't rid the party of these right-wing influences, where

are we going?

[Captain Hilts]

40. That's right. Nothing's free. nt

[closeupready]

35. These Senators are ALSO part of the wealthy class. Each is worth $1.7M, on average.

So when they save their wealthy brethren, they are saving THEMSELVES. Don't forget that next time they vote to bail out more wealthy concerns.

[defendandprotect]

92. Right . . . we're electing ELITES in hopes of their doing the right thing for the masses . . . !!!

Not going to happen -- all we're getting is more rule by elites!

[closeupready]

120. Yes, and it will get worse over time.

It's been said that where graft becomes the way of getting things done, honest people new to it all are given a short time to learn how to be a crook, or else they are quickly shoved aside, because where your way of life depends on corruption, you can not afford to risk it all due to a single colleague blowing the whistle on you. So we are probably never going to get honest representation, and not necessarily because those we send to represent us don't want to be honest - but because they aren't ALLOWED to be honest.

[EFerrari]

36. Wall Street was a big contributor to Obama's campaign and to the inaugural.

:shrug:

And I didn't see Pelosi or Reid dancing away from it, either.

[dysfunctional press]

41. nationalize consumer banking.

home/car loans, credit card, checking/savings accounts.
mortgage rates of 3-4% for everyone.

[Greyhound]

46. "Gall" does not even come close.

White hot blinding rage is a little closer, yet still inadequate.
:kick: & R

[anonymous171]

47. FDR would not have let them go under. nt

[kentuck]

48. None of them?

Or all of them?

[LibraLiz1973]

49. Gall isn't even the word

I am completely infuriated.

[pnwmom]

50. What makes you think FDR would have let giant banks fail? n/t

[kentuck]

52. I do think he would have required an accounting for the money...

After all, it was his Administration that put in all the New Deal regulations that this recent bunch of neo-cons wiped their butts with. That would be the least the Democrats should do, in my opinion. But a blank check with no questions asked just because Henry Paulsen said everything was going to collapse by the weekend if we didn't give him $700 billion dollars?? Well, they didn't give him the money by the weekend and it didn't collapse. Yes, FDR would have required more accountability.

[pnwmom]

57. I agree. There is no excuse for setting up the bail-out the way with no accountability.

And new regulations are absolutely necessary.

[alarimer]

51. It was Clinton and Rubin who did away with the regulations.

That started this whole mess. And nobody is even talking about re-regulating which we desperately need.

[4 t 4]

53. It's all Clintons fault

Bite yourself now!

[kentuck]

55. Indeed Clinton did sign the law...

to do away with Glass-Steagal, which had been around since FDR, and permitted the big financial institutions to expand their ways to make money. Give credit where it is due.

[pnwmom]

58. I expect they had the votes to override his veto. But I wish he'd vetoed it anyway.

[4 t 4]

61. I was making a joke

Nothing is Clintons fault I don't care what you think his intentions were good. Nothng is his fsult because his intentions were pure he really does care about the people unlike some other people we know

[kentuck]

72. I have no idea what his intentions were....

All I know is that he signed the law to repeal Glass-Steagal, in his effort to try and be bi-partisan with the Republicans. I can't remember if that was before or after they impeached him?? Of course, the scorpion would like to ride on the little froggy's back - across the river. Surely he would not sting you for then you both would drown. Bill learned it the hard way.

[pnwmom]

59. Clinton didn't write the bill. The Republican congress did.

And there might have been enough votes to over-ride his veto, with the help of a few Democrats.

[paulk]

117. the final version of the bill, the one Clinton signed passed the

Senate with over 90 votes.

It was not only veto proof - it had the support of an overwhelming majority of Clinton's own party. That's why he signed it.

[truedelphi]

67. Very much agree with you. n/t

[wolfgangmo]

118. Random house called. They are waiting for your next book of tall tales.

Clinton didn't write the law. You know who had control of the senate and house. And it is likely that BC knew that he didn't have the votes to get past an override.

Do you have any more fiction you will be writing?

[.... callchet ....]

60. Radical liberal conservative elitist democrats.

It is a long road to recognize that everybody deserves a good life whether they have a ged or bs or mb or phd or a trust fund. Americans are afraid to

demand the least of the rights guaranteed by the constitution of life liberty and the pursuit of happiness. The reasoning for taking welfare away from

poor people was absolutety right wing atrocious propaganda. Every human life deserves something. We reward the lucky and talented and punish the

unlucky. Getting money for nothing and not working. John Thain, he was guilty of receiving stolen property not earning millions. And then there is

the pagan god worship of lifestyles of the rich and famous.

[Skittles]

62. I find it completely disgusting

fucking appalling

[marketcrazy1]

63. here is a link to look over

http://market-ticker.org/archives/759-Here-It-Comes.html

[Fireweed247]

66. "This is not my Democratic Party"

I hear ya! None of what the Bush Administration 'accomplished' would have been possible without the complicity of the corrupt Democratic party. We have to replace almost the entire US Congress, but so many people think the Democrats are going to change things they are not working on new Representatives. In the meantime, the Republicans are blaming Bush's mess on the Democrats and they are willingly taking it, so it looks like we will have more Republicans elected next time. Sometimes it seems they are all working for the Republican party.


And there is this one inconvenent and unpopular truth about Al Gore, the hero of the global warming movement....
he was instrumental in passing the "free trade" agreements which not only sent all of our jobs overseas, the jobs were sent to countries that are polluting like crazy. How does that make any sense?

WE have one party, of, by, and for the corporations.

[TBF]

68. Recommended. n/t

[L0oniX]

71. I could retire on what a congressman makes in one year.

I don't expect them to do anything for me anymore. This was the first and last time I will ever vote and it was only to help make sure McLame didn't win. Our government is full of rich bastard criminal loving traitors.

[inna]

73. i agree completely; K&R! n/t

[newtothegame]

75. Who cares? At least our President looks different.

:sarcasm:

[progressoid]

77. I'm beyond galled.

Pissed maybe? Irritated? Incensed?

:mad: :grr:

[earth mom]

79. I am totally pissed off and outraged by the bank bailout.

And I'm even more pissed off that the only financial relief the good hard working people of this country have been given after months of promises of "hope and change" is chump change of like 20 fucking bucks a payday! :wtf:

Some fucking "hope and change" they got there. Yeah right, tell us some more gawd damn lies. :puke: :grr:

[plantwomyn]

84. So when Wall Street holds insurance against a lose their claim gets paid

by the taxpayer.
No questions about weather it was wind vs. water damage. When the taxpayers of the Gulf Coast needed their claims paid... "Sorry, you're not covered." "It was wind not water" "It was an act of god, not flooding from the failure of the levies." "Your house is only worth half that. Here you go. It won't be enough to rebuild but oh well."
For Wall Street, it doesn't matter that they made a bad bet. They actually bet that the economy WOULD fail. Why should it matter to them? They're insured against loss. Those who hold these policies sit back and get fat off of TARP funds paying to make sure that their "home" insurance company doesn't fail.
THE RICH GET RICHER! They do not count on retirement funds, IRA's or the like. They have their's and WE PAID for it. How they must be sitting around their country clubs laughing as Rome burns.

http://www.time.com/time/business/article/0,8599,1858494,00.html
"And Treasury officials say $40 billion of the money that has been spent was a onetime emergency investment into insurer AIG and should not be counted as part of the $250 billion they plan to invest in banks. Still, the AIG investment depletes the amount of money left for buying troubled bank assets."

http://online.wsj.com/article/SB122156561931242905.html
"That the government would prop up AIG financially offers a stark indication of the breadth of the insurer's role in the global economy. If it were to have trouble meeting its obligations, the potential domino effect could reach around the world.

For one thing, banks and mutual funds are major holders of AIG's debt and could take a hit if the insurer were to default. In addition, AIG was a major seller of "credit-default swaps," essentially insurance against default on assets tied to corporate debt and mortgage securities. Weakness at AIG could force financial institutions in the U.S., Europe and Asia that bought these swaps to take write-downs or losses.

Crisis on Wall Street
Real Time Econ: Here Be Dragons | Fed's 'Unusual and Exigent' Clause Greenberg's Letter to AIG CEO WillumstadWash Wire: Bush Not to Comment on Paulson Meeting Crisis Blog: Questions and Answers on AIGAIG, Lehman Shock Hits World Markets Old-School Banks Emerge on Top Complete Coverage: Wall Street in CrisisAIG's millions of insurance policyholders appear to be considerably less at risk. That's because of how the company is structured and regulated. Its insurance policies are issued by separate subsidiaries of AIG, highly regulated units that have assets available to pay claims. In the U.S., those assets can't be shifted out of the subsidiaries without regulatory approval, and insurance is also regulated strictly abroad.

Tuesday afternoon, after the market closed, AIG put out a statement saying its basic insurance and retirement services businesses are "fully capable of meeting their obligations to policyholders." AIG said it was trying to "increase short-term liquidity in the parent company," but said that didn't "include any effort to reduce the capital of any of its subsidiaries or to tap into Asian operations for liquidity." Asia is one of AIG's largest markets."

My biggest question for these "financial" firms is weather any of them has ever heard of Accounts Receivable and Payable? They can't tell were the money went once they received it? Why the FUCK would we even think about giving anyone who can't fill out a receipt book another dime?!!!!!!!
Imagine telling the IRS "Why I just can't tell you were the money went. It all got jumbled up together in my general accounts."
And the idea that we should have legislated their accountability. WTF. When you come hat in hand to the taxpayer to bail you out it should be understood that what you do with the money will be under strict scrutiny. The problem isn't that it wasn't legislated, the problem is that the Treasury ACCEPTED the false premise that they can't and don't know where the money went. The Treasury's and the congress' answer to that should have been "Well you better get your ass to work and find out. Return next week with a full accounting or a certified check for the money you owe the taxpayers."

[defendandprotect]

87. Do what other nations do: NATIONALIZE banks and corporations--!!!

If we bsil them out, we OWN them ...!!!

[blossomstar]

88. It bothers the hell out of me..

My daughter & son in law have to spit up $30,000 for taxes this year. They are not rich, just hard, hard workers. If this is where it's going, it is disgusting. Why aren't these bankers in jail? Why is our tax money bailing them out! Why is it that when they make grossly huge profits it goes in THEIR pockets, then when they loose their asses, it is up to the "little" people to pay the bill? A "free market" would let them take the fall that they created thru their greed. My daughter & son in law are having a hard time of it this year since business is practically nonexistant, nobody is coming to pay their bills and prop them up. They did everything right and played by the rules. NOT FAIR, not fair at all.

[waiting for hope]

103. There are no more D's and R's -

There is one BIG C - and that stands for the Corporation Party and they are all slaves to it.

[Beavker]

104. Working with Underwriters...

...and I was not one, but I recall that they would be concerned if they had a loan, that someone could not afford to pay. Silly concept I know. Where were those people when someone that could afford an $800/mo. payment, all the sudden would have to pay $1200 or $2200? And if I had thousands of those loans on my books, or I bought a pool that was made up of thousands of these loans, at what point would I be concerned that almost ALL of these people could likely default on their loans? If the due diligence is not done by the proper risk management folk, what do you do to keep them in line? How do you keep a suicidal company like this from doing this? If all my loans were to ABC Company employees, and I learned that ABC company was going under, wouldn't someone think,"Gee, we aren't going to get payment on these loans". How do you put into law, keeping someone from taking rediculous, economy crippling risk without pissing off Larry Kudlow?

[whistle]

105. So far the first $350 billion of the bailout as demonstrated the following

<snip>
Emergency Economic Stabilization Act of 2008

<snip to end>
Administration of the law
CAMELS ratings are being used by the United States government to help it decide which banks to provide special help for and which to not as part of its capitalization program authorized by the Emergency Economic Stabilization Act of 2008. <194>

The New York Times states: "The criteria being used to choose who gets money appears to be setting the stage for consolidation in the industry by favoring those most likely to survive" because the criteria appears to favor the financially best off banks and banks too big to let fail. Some lawmakers are upset that the capitalization program will end up culling banks in their districts.<194>

Known aspects of the capitalization program "suggest that the government may be loosely defining what constitutes healthy institutions. <... Banks> that have been profitable over the last year are the most likely to receive capital. Banks that have lost money over the last year, however, must pass additional tests. <...> They are also asking if a bank has enough capital and reserves to withstand severe losses to its construction loan portfolio, nonperforming loans and other troubled assets."<194> Some banks received capital with the understanding the banks would try to find a merger partner. To receive capital under the program banks are also "required to provide a specific business plan for the next two or three years and explain how they plan to deploy the capital."<194>


Effects on national debt
The United States annual budget deficit for fiscal year 2009 may surpass $1 trillion. The original Paulson proposal would lift the United States federal debt ceiling by $700 billion, to $11.3 trillion from the current $10.6 trillion.<195>


$1.6 billion in salaries and bonuses for executives
A December 21, 2008 Associated Press article stated, "Banks that are getting taxpayer bailouts awarded their top executives nearly $1.6 billion in salaries, bonuses, and other benefits last year, an Associated Press analysis reveals. The rewards came even at banks where poor results last year foretold the economic crisis that sent them to Washington for a government rescue... Benefits included cash bonuses, stock options, personal use of company jets and chauffeurs, home security, country club memberships and professional money management, the AP review of federal securities documents found. The total amount given to nearly 600 executives would cover bailout costs for many of the 116 banks that have so far accepted tax dollars to boost their bottom lines." <196>

A January 30, 2009 CNN article reported that Senator Claire McCaskill (D-Missouri) introduced a bill that would cap the pay of employees of companies that receive federal bailout money. The bill would limit the combined pay, including salaries, bonuses, and stock options, to a total of $400,000, which is the same salary that is paid to the President of the U.S.<197>


Banks won't say how they are spending the money
A December 22, 2008 Associated Press article stated, "The Associated Press contacted 21 banks that received at least $1 billion in government money and asked four questions: How much has been spent? What was it spent on? How much is being held in savings, and what's the plan for the rest? None of the banks provided specific answers... Some banks said they simply didn't know where the money was going." <198>

A review of investor presentations and conference calls by executives of some two dozen US-based banks by the New York Times found that "few cited lending as a priority. An overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future." <199>


Government officials overseeing bailout don't know how it's being spent
A December 31, 2008 Associated Press article stated, "Government officials overseeing a $700 billion bailout have acknowledged difficulties tracking the money and assessing the program's effectiveness." <200>

A January 29, 2009 article from bloomberg.com stated, "Bloomberg News asked the Treasury Department Jan. 26 to disclose what securities it backed over the past two months in a second round of actions to prop up Bank of America Corp. and Citigroup Inc. Department spokeswoman Stephanie Cutter said Jan. 27 she would seek an answer. None had been provided by the close of business yesterday." <201>

<MORE>

http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008

[nichomachus]

106. Fatal error in your argument

It's not "our Democratic party" and hasn't been for years. It's their Democratic party. We have only one party -- the Corporate Party. It has two right wings, The Democratic Wing and The Republican wing. They may fight. They may oppose each other in public. But they both come running when the lobbyists call.

[Beavker]

107. Unfortunately largely true

So many members of any political party have had or are still involved with some sort of Corporation. Or, there family was, or their spouse is. Somehow, a lot of people have such a large vested interest in Wall Street, exceeding my meager $401k, that they can't allow their massive funds or stock options to tank. However, one aspect of Obama I liked when he was running. He was not a corporate stooge like even so many Dems were, entrenched in the Financial industry either directly or indirectly via their massive wealth.

Just a thought.

[Beavker]

108. In other words...

Self Lobbying. I knew John McCain wasn't goint to do anything to hurt his wifes empire. He wasn't going to legislate himself into "lesser" wealth. Somehow republicans think he was going to help them though, as middle class schlubs. Anyway, that's a different blog I guess.

[JDPriestly]

109. I think your assumptions are incorrect.

1. So far, I think that the bail-out has been managed and supervised by Republicans like Paulson and Bush. I don't think that the Democrats have been authorized to give out a lot of money yet.

2. The original Paulson proposal gave Paulson personally complete discretion in handing out the monety. It was the Democrats who negotiated to get oversight into the bill. The Republicans did not obey the law as it was written and did not implement oversight. (Surprise. As if this was the first law the Bush administration violated. That's why they need to be subpoenaed, investigated and possibly tried for a lot of crimes.)

3. The whole financial fiasco is a big trap for Obama. Write your congresscritters right away about your opinion because the big Obama giveaway/stimulus package had not begun. It's partly up to us to press Congress to make sure that we get a real stimulus and not a giveaway to the rich.

Sources: Obama cracks down on proposed uses of bail-out money:
The Obama administration on Tuesday will announce tough new restrictions on bailout funds aimed at curbing lobbying by companies that receive taxpayer injections.

“We will implement safeguards to crack down on lobbyist influence over the program, including restricting contacts with lobbyists in connection with applications for, or disbursements of” federal funds designed to shore up the financial system, the Treasury Department says in its announcement.

Fourth-quarter lobbying reports had shown an increase in lobbying by GM and some financial institutions that had benefited from the federal rescue.

http://www.mlive.com/us-politics/index.ssf/2009/01/obama_to_impose_tough_new_bail.html

According to this report dated Jan. 12, 2009, Obama requested the rest of the bailout money, but I don't think he has received authorization to disburse it yet. I could be wrong, but that is my understanding.

U.S. President-elect Barack Obama Monday sought the remaining $350 billion of federal financial bailout funds from Congress, pledging a major overhaul that would distribute the money more widely and impose tougher restrictions on recipient companies.

Obama said he asked President Bush to make the request on his behalf so he could take office next week with the funds at the ready to deal with a "still fragile" financial system.

"I felt that it would be irresponsible for me, with the first $350 billion already spent, to enter into the administration without any potential ammunition should there be some sort of emergency or a weakening of the financial system," Obama told reporters.

http://www.zimbio.com/Reuters+Politics/articles/2665/WRAPUP+2+Obama+seeks+remaining+350+bln+bailout

[hobbit709]

116. The Wall Street clowns need to be shortened.

[G_j]

123. I hate to say it, but

90% are worse than useless.