Sunday, September 21, 2008

MCCAIN-REAGANOMICS CREATED OUR MONEY CRISIS

Three important articles:

1. McCain May Not Understand the Fundamentals, But His Lobbyist Advisors Do. A McCain Admin Would Drill Our Economy into the Ground
A BUZZFLASH NEWS ANALYSIS by Meg White

In the second in our two-part series about the Republican ticket's economic past, we saved the best for last. As we mentioned in our first piece, Alaska Gov. Sarah Palin doesn't have a long record, but it's one that would make any economist (or working, middle class American for that matter) shake their head in disbelief.

Arizona Sen. John McCain, on the other hand, has a long, rich history of either screwing up the economy or just ignoring it, hoping the problem will go away or be handled by his lobbyist friends and advisors.

We could start as early as the late 1980s with the embarrassing Keating Five incident, in which McCain used his influence in Congress to help out his friend and donor, Charles Keating, chairman of the Lincoln Savings and Loan Association. Keating spent five years in jail on corruption charges stemming from his influencing McCain and four other senators. McCain brushes off questions about the incident, saying he's paid for it and learned his lesson. It seems the lesson was "let other people handle economics. It's not that big of a deal anyhow."

2. Mad as hell - taxpayers lash out over bailout.
President Bush petitioned Congress for the authority to spend up to $700 billion to to bail out a financial industry on the verge of collapse and said the high price tag was not only justified, but essential. Some taxpayers disagree. "NO NO NO. Not just no, but H*** NO," writes Richard, a reader from Anchorage, Alaska. "It's our money! Let these companies die," added Claudio from Plainville, Connecticut.

We asked you what you had to say about the bailout, and we heard you loud and clear: 'No way!' by David Goldman, CNNMoney.com staff writer.... article below, but first read this:

3. Greed in the Economy: It’s the Morality, Sinner by Reverend Jim Wallis

IT'S THE MORALITY, SINNER by Reverend Jim Wallis

Everyone has heard the famous phrase, attributed to James Carville, which supposedly won the presidential election of 1992 for Bill Clinton: “It’s the economy, stupid!” It’s still good advice, especially as the shocking collapse of the financial markets has turned the election campaign into a much more serious and somber discussion than lipstick on pigs.

But the issue is deeper than just the economy. I would now rephrase Carville and say, “It’s the morality, sinner!” And I would direct it to the people who have been making the decisions about the direction of this economy from Wall Street to Washington. Here is the morality play:

Aggressive lending to potential home-buyers using subprime and adjustable rate mortgages led to “mortgage-backed securities” being sold to investors at high returns. As housing prices dropped and interest rates rose, homeowners got caught, fell behind on payments, and millions of foreclosures followed. That resulted in the mortgage-backed assets losing value with banks unable to sell the securities. So the subprime lenders began to fail. Asset declines then spread to investment banks. We have now seen the sale of Bear Stearns brokered by the government, and last week, the government took over Fannie Mae and Freddie Mac as mortgage defaults threatened them. Then Lehman Brothers fell into bankruptcy and Merrill Lynch was sold. Now another bailout, AIG, the largest insurance company in the country — whose potential demise threatened the whole financial system even further.

During the height of the lending frenzy, many people got very rich, as they did during the previous technology bubble. Now with the collapse, experts say the most likely result will be further tightening of credit and lending standards for consumers and businesses. Home, retail, and business loans will become more expensive and harder to secure. And the consequences of that will spread to most of America.

In the accounts and interpretation of these events, a word is slowly entering the discussion and analysis — greed. It’s an old concept, and one with deep moral roots. Even venerable establishment economists such as Robert Samuelson now say, “Greed and fear, which routinely govern financial markets, have seeded this global crisis … short-term rewards blinded them to the long-term dangers.”

The people on top of the American economy get rich whether they make good or bad decisions, while workers and consumers are the ones who suffer from all their bad ones. Prudent investment has been replaced with reckless financial gambling in what some have called a “casino economy.” And the benefits accruing to top CEOs and financial managers, especially as compared to the declining wages of average workers, has become one of the greatest moral travesties of our time.
In the search for blame, some say greed and some say deregulation. Both are right. The financial collapse of Wall Street is the fiscal consequence of the economic philosophy that now governs America — that markets are always good and government is always bad. But it is also the moral consequence of greed, where private profit prevails over the concept of the common good. The American economy is often rooted in unbridled materialism, a culture that continues to extol greed, a false standard of values that puts short-term profits over societal health, and a distorted calculus that measures human worth by personal income instead of character, integrity, and generosity.
Americans have a love-hate relationship with government and business. The climate seems to shift between an “anything goes” mentality and stricter government regulation. The excesses of the 1920s, leading to the Great Depression, were followed by the reforms of Franklin Roosevelt.
The entrepreneurial spirit and social innovation fostered by a market economy has benefited many and should not be overly encumbered by unnecessary or stifling regulations. But left to its own devices and human weakness (let’s call it sin), the market too often disintegrates into greed and corruption, as the Wall Street financial collapse painfully reveals. Capitalism needs rules, or it easily becomes destructive. A healthy, balanced relationship between free enterprise, on the one hand, and public accountability and regulation, on the other, is morally and practically essential. Government should encourage innovation, but it must also limit greed.

The behavior of too many on Wall Street is a violation of biblical ethics. The teachings of Christianity, Judaism, and other faiths condemn the greed, selfishness, and cheating that have been revealed in corporate behavior over decades now, and denounce their callous mistreatment of employees. Read your Bible.

The strongest critics of the Wall Street gamblers call it putting self-interest above the public interest; the Bible would call it a sin. I don’t know about the church- or synagogue-going habits of the nation’s top financial managers, but if they do attend services, I wonder if they ever hear a religious word about the practices of arranging huge personal bonuses and escape hatches while destroying the lives of people who work for them. We now need wisdom from the economists, prudence from the business community, and renewal courses on the common good from the nation’s religious leaders. It’s time for the pulpit to speak — for the religious community to bring the Word of God to bear on the moral issues of the American economy. The Bible speaks of such things from beginning to end, so why not our pastors and preachers?


TAXPAYERS LASH OUT: AMERICA'S MONEY CRISIS

NEW YORK (CNNMoney.com) -- "NO NO NO. Not just no, but HELL NO," writes Richard, a reader from Anchorage, Alaska.

"This is robbery pure and simple," Anna from Denver posted on CNNMoney.com's TalkBack blog this weekend.

"It's our money! Let these companies die," added Claudio from Plainville, Conn.

After President Bush petitioned Congress Saturday for the authority to spend up to $700 billion to to bail out a financial industry on the verge of collapse, he said the high price tag was not only justified, but essential.

"It is a big package because it's a big problem," Bush told reporters at a news conference. "The risk of doing nothing far outweighs the risk of the package."

But when asked what they thought of the government's proposal, most readers gave an overwhelming thumbs down.

"I'm tired of rewarding institutions and people for the bad decisions they have made," said Dean from Madison, Wis. "Sure, it will hurt tax payers if/when some of these institutions fail, but perhaps we need to let that happen. We do not need more big government involved in our lives. Enough is enough."

Don't hand me the tab
Readers focused most of their indignation on having to foot the bill for irresponsible lenders and borrowers.

"Companies, like individuals, should be held responsible for their decisions," wrote Jorge from El Paso, Texas. "This buyout does not address the other problems in the pipeline such as personal credit default and market slowdowns in most industries. No new jobs will be created."

Paul from Portsmouth, N.H., said banks are getting the soft treatment when taxpayers are suffering.

"It is time for the financial institutions of this country to be called to the mat. We should be expecting and demanding responsible and ethical business practice, not rewarding it at the expense of taxpayers."

And John from Springfield, Va., said the government action actually hurts the people it is intended to help.

"The government does not have $700 billion dollars. WE have $700 billion, and it is being taken from us. If this is passed then the next administration and the next will be extracting this one from the people who are supposedly being protected by this bailout."

Where's my bailout?
Other readers wanted to know why the government didn't spend the $700 billion investment on the majority of responsible Americans who are suffering because of the bad bets of the few.

"Why not take the billions and ... make funds available to home owners stuck in the loans these idiots created, marketed and sold," asked Don from Coarsegold, Calif. "It will put the money where it should be with the little guy who made a mistake, instead of the big guy who created the problem."

Jordan from Charlestown, Ind., asked why different rules applied to big banks and ordinary investors.

"Once I invested in something and lost money. Maybe I could just change the rules of investing so that my loss turns into a gain? Oh, I forgot only banks can do that!"

Vote these jerks out
Some readers said it was time for the politicians who support the bailout to get the heave-ho come November.

"I will be watching to see which of our representatives vote for this bailout," said R. Kidd in Troy, N.C. "Let the American people see how many we can fire come election time."

And many readers, including Danny from Texas said we should stop typing and start dialing the lawmakers who are prepared to give the OK to the bailout.

"Call your Congressman. Stop blogging, posting comments, and call your congressman. This is the patriotic thing to do. Let them hear your opinion, show them this is still America and that you will not stand for this!!"

A necessary sacrifice
But not all readers agreed. Some thought the bailout was an unfortunate but necessary move to rescue our financial system from collapse.

For instance, Bill from St. Louis said he changed his mind about the bailout when he realized the consequences of doing nothing.

"I was opposed to the bailout at first, but realized that the scope of this thing is global and so massive that the entire global economy could collapse if nothing was done. ...The priority has to be resolving the present crisis of confidence in our economy. Remember, if Wall Street collapses, Main Street will go with it."

Andy from Chicago said the cost to the taxpayer will not be what the headline number makes it seem.

"This money is not a handout to companies. It's simply giving banks and mortgage companies loans, since the banking system itself is too unstable to raise this kind of capital. And no, the government cannot just use the $700 billion to pay back all the citizens that will be hurt by this. If the companies like AIG fail, the cost will be far far greater than $700 billion. Wake up!!"

And Surfta from Brooklyn, N.Y., says the government action is really not a bailout at all.

"It's NOT a bailout. The government is not handing out cash, they actually stand to make a great deal of money out of this, which will trickle down to YOU. First priority should be to try to control and fix the problem, then regulate sufficiently to make sure this NEVER happens again."

First Published: September 21, 2008: 2:07 PM EDT

11 comments:

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  2. I agree Lydia, I frickin say hell no, let these abortions of companies die, we need to frickin spend our money on health care, education, and on helpin frickin normal people keep their homes and jobs.

    Only a frickin deranged greedy goon would say we need to save these frickin banks and bail out the elitist corporate asshol#$ from Wallstreet an save their companies for them, these greedy goons outsourced our frickin jobs so we could like sling burgers an work at Walmart with no paid health care, its time for these asshol#$ to sling burgers and work at Walmart with no health care or like lose all their frickin fat cat toys an mansions an see what its like to struggle to survive.

    Like Obama says its time to frickin help Main Street not wall Street.

    ReplyDelete
  3. I was about to post something wise, insightful, thought provoking, and that would be guaranteed to solve the financial problems we all face ...

    Then I looked at Sara's new profile pic ... my mind went blank, my jaw dropped open and my knees turned to butter.

    Thanks Sara

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  4. Hey MCH, good to see ya.

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  6. Pelosi Thumbs Down on Bailout Plan

    Washington, D.C. — Speaker Nancy Pelosi issued the following statement today as Congress and the White House work to craft legislation to address the crisis in our financial markets:

    “Congress will respond to the financial markets crisis by taking action this week in a bipartisan manner that will protect the taxpayers’ interests. The Administration’s $700 billion proposal does not include the necessary safeguards. Democrats believe a responsible solution should include independent oversight, protections for homeowners and constraints on excessive executive compensation.

    “We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome. Democrats will act responsibly to insulate Main Street from Wall Street.

    “As we proceed to deal with this crisis, this is clear recognition that the party is over for the Bush Administration’s anything goes, failed economic policies that have damaged our economy, undermined the middle class and further pointed out the need for a New Direction.”


    Could it be?

    Does she actually have a spine?

    ReplyDelete
  7. The recent crisis should serve as a reminder to voters just what deregulation and greed has done to this country. Unfortunately, we have people like Voltran out there who probably pays more attention to Defender of the Universe than he does the real issues. I continue to bemoan the fact that we have a population filled with people who are more concerned with pop culture and voting for the next American idol than studying up for an educated vote for President. We do have to pray that the swing voters out there who do pay attention are more interested in changing this country for the better than continuing the Bush/Cheney/McCain legacy.

    ReplyDelete
  8. Fascist Franny, Crusty, Doltron, and the rest of the mindless wingtards are undoubtedly in agony because one of their favorite talking points has been incinerated. "The markets will regulate themselves" makes about as much sense as expecting 4 dogs to civilly divide a ribeye steak. Human nature is human nature, and a measurable number of us will always be greedy. Government must act as an arbiter, and not let itself be swayed too far one way or the other. For the past 7 years, the moronic monkey has basically been an enabling tool of the greedy, as he has worked furiously to transfer the entirety of the national wealth from the American people to a few of his cronies at the top. What has happened was inevitable, and has we have written about it endlessly, as many others have.

    We have also written endlessly that the only way to correct the downward course we're on is to return this country to a more equitable division of wealth. Cutting the pay of those who are actually performing productive work guarantees that there will be little or no economic growth, because those are the people who buy things. Paying inept CEOs multimillion dollar slaraies ALSO guarantees little or no economic growth, because those people simply do not buy enough themselves to sustain an economy.

    Reconstitution asked years ago what happens when there's nobody left with enough money to buy anything. I think we have our answer.

    ReplyDelete
  9. On Sept. 22, 1862, President Abraham Lincoln issued the preliminary Emancipation Proclamation, declaring all slaves in rebel states should be free as of Jan. 1, 1863.

    Wingtards like Franny, Duncetron and crusty would have decried government intervention in the private markets of the slave trade, and mocked the slaves like they do liberals and Muslims.

    John McCain and Sarah Palin would have decried the government intervention, was hurting small businessmen who needed slaves to turn a profit.

    People like Larry Kudlow, Steve Forbes, Patrick Buchanan, William Kristol, Grover Norquist, Milton Friedman, would have decried the government intervention in the private market place and the liberal anguish about the slave trade and how it help give good profits, and very few were really bad slave holders, most were just helping improve slaves lives with their "christian family values" they impart to the slaves who didn't have such values before being forced into slavery.

    The American Enterprise Institute, American Legislative Exchange Council, Atlas Economic Research Foundation, Cato Institute, Center for Strategic and International Studies, Citizens for a Sound Economy, Competitive Enterprise Institute, Empower America, Employment Policy Foundation, Ethics and Public Policy Center, Family Research Council, Free Congress Research and Education Foundation, Heritage Foundation, Hoover Institution, Hudson Institute, Manhattan Institute, National Center for Policy Analysis, National Center for Public Policy Research, Progress and Freedom Foundation, Reason Foundation, would have held numerous "public" panels where their supposed experts would have decried how this was going to undermine the business enviroment raise prices cause many small businesses to be forced into bankruptcy, undermine the social fabric of the country, and cause the downward spiral of the society as a whole.

    Of course the hate mongers on the public airwaves like Rush, Bill O, Savage, Hannity, Coulterguist Malkin, and right wing blogs would have screeched this is the first sign of the impending apocalypse, and used every slimy trick to dehumanize Lincoln and the abolitionists.

    They all would have claimed the business needs override any social good from freeing the slaves, and as usual they would have been wrong.

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