$700 Billion & Counting

So this plan to buy up all this bad debt from big business with taxpayer cash and thus let the government “fix” the economy is not making any sense to me. Mind you, I’m not alone in thinking that a no oversight plan is a bad idea. Of course I don’t think it takes a degree in economics or business to know that signature only mortgages were a bad idea either. Am I crazy, or does this bailout plan feel a lot like a signature only mortgage with the bills coming due to the entire country?

11 Responses

  1. Believe it or not, it’s actually $700 billion. We just did a “Bailout 101″ at the CA NOW blog, summarizing the situation and giving lots of links to more info and ways to take action: http://www.canow.org/canoworg/2008/09/bailout-101.html

  2. That’s actually a typo. It was meant to be 700 billion.

  3. Read Amy Goodman’s interview with Naomi Klein.

    Klein describes in her brilliantly clear manner how this bailout is really stage one of the corporatista Economic Shock Doctrine on the U.S. taxpayer, Taking It All. As we know from history as in Mussolini’s Italy and Franco’s Spain, this is fascism, that goes hand-in-hand with a police state.

    The interview is here.

    An extract:

    Yeah. I mean, there is pressure being put on Congress from Democrats who—you know, we’ve heard the proposals to cap executive pay and to have a moratorium on foreclosures. It’s coming not from all Democrats, but from some. But there’s something going on on the Republican side, where you have people like Newt Gingrich, and you also have the Republican Study Committee, which is a group of very influential Republican lawmakers who are saying that they’re opposed to the bailout, and they also have their wish list. And I think it is that it’s not that they’re going to oppose a bailout completely; it’s that they want economic changes, right-wing, pro-corporate economic changes, attached to a bailout. So, Newt Gingrich has his list. He’s got eighteen demands. But I think even more important than that is the Republican Study Committee, and I raise this because they’ve just issued their ransom list. It starts with suspending the capital gains tax, privatizing Fannie Mae and Freddie Mac, suspending mark-to-market accounting, which is the rule that requires companies to assess their assets at current market values.

    So, what’s so stunning about this, Amy, is that here you have a crisis that everyone seems to agree is borne of deregulation, and they’re actually calling for more deregulation. We have a situation where the debt is exploding on American taxpayers, and they want to suspend corporate profits—sorry, corporate taxes, which is actually what might defray some of those costs from regular taxpayers. So it’s an incredible display of opportunism. And this is what I mean by stage two of the shock doctrine. The first stage is just the bailout, but the second stage are all of these radical reforms that are going to be invoked in the name of the crisis that the bailout is creating, whether it’s pushed through right now or whether it’s pushed through later.

    But what’s important—you know, Amy, in the book, I talk about—I start the book with a quote from Milton Friedman that has really made the rounds a lot lately, which is that—and this is a Friedman quote—that “only a crisis, actual or perceived, produces real change. And when the crisis occurs, the change depends on the ideas that are lying around.” And then he goes on to say, “That, I believe, is our basic function: to keep the ideas ready until the politically impossible becomes politically inevitable.” So I think it’s really important for people to look at the ideas that are lying around.

  4. You know, what really boils my blood about this whole thing
    is that the word GENTRIFICATION is never mentioned in any of this. Black neighborhood after black neighborhood were gentrified to hell because of this scam. People were pushed right out of their homes, sometimes onto the very street while people with these no-good-mortgages came in and bought up all the houses. Then they jacked up all the rents.

    If you could READ and were able to do a simple calculation anyone could see that there was something wrong with these mortgage plans. But it was just so easy and so much fun to move into an “up and coming” neighborhood. Damned the consequences.

    Just to make this even more bitter, these bad loans are being blamed on “people with bad credit” a.k.a. black people when it was middle class whites who were getting the majority of these loans. Think about it, a population the size of black America could not take down all these large loan companies alone. It’s just impossible.

    Now these VERY SAME people that pushed us out of our neighborhoods are in trouble and want us to bail them out.

    I just ain’t right y’all. It just ain’t right.

  5. One of the things that pisses me off the most about this whole thing is that despite all of this, the CEOs still get their golden parachute.

    Here’s an idea: If you want a bailout, I say the CEOs and the Board of Directors have to do 5 years of community service.

  6. I don’t understand why we are compromising about how much to pay these CEOs. We should be compromising about how much JAIL TIME these assholes get for trashing the American economy. Osama bin Laden could not have come up with a better way to fuck us over.

  7. Jenn said that gentrification has never been mentioned in this mess, and I’ve noticed this too.

    One of the primary reasons for the subprime loan mess, it seems to me, from where I sit, here in one of the most expensive real estate markets on the globe, and what I saw happen in this city, is that people don’t have anywhere to live!

    There are no rentals, at least not any that people can afford. No dearth of luxury rental property, but very little, if any, for middle-class and poor people. So you do go for a mortgage and house, at any sort of deal, because there is no other choice.

    That there was / is not other choice also appears to me, from where I sit, not an accident or a coincident. These sub-prime mortgage lenders and bundlers and buyers and gamblers got very rich from the desperation of less affluent people.

    Not that it is news that some groups gets rich from the miseries of others. That’s history. But not any more acceptable for that, particularly in a nation that trumpets democracy.

    Love, C.

  8. You want obscene? Here you go:

    Alan Fishman could be eligible for a multi-million paycheck after only three weeks on the job … if he decides to keep it.

    By Aaron Smith, CNNMoney.com staff writer
    Last Updated: September 26, 2008: 3:07 PM ET

    “NEW YORK (CNNMoney.com) — Washington Mutual Chief Executive Alan Fishman could walk away with more than $18 million in salary, bonuses and
    severance after less than three weeks on the job, according to the terms of his employment agreement.”

    Love, C.

  9. $18 million? I may need to take to my bed behind that one.

  10. It is bailing out the Titanic, rich people first. I was offered a huge loan and decided I couldn’t afford it. I live in a small apt., have no car, no 401K, all I got is a savings acct. earning a little more than a thread from my mattress. Bottom line, same as always: the rich get richer and the poor get poorer. Pay for the bailout? Hell, we been payin’ for CEO houses, cars, Harvard for their kids, drugs for their parties, for YEARS. Only difference is now THEY are hurtin; a little—can’t afford that 3rd vacation home. We should take away their stolen money from us (like the cost of a movie and popcorn) and their health ins., and welcome to the lives they shoved us in. Let Wall Street players swim.

  11. Why does it matter if there’s oversight? Oversight on something like this is like being told whether the people who robbed your house used a truck or a van to drive away with your furniture.

    So, what’s so stunning about this, Amy, is that here you have a crisis that everyone seems to agree is borne of deregulation, and they’re actually calling for more deregulation.

    Regulation or deregulation, it doesn’t really matter when the government is allowed to print money (which is called counterfeiting when anyone else does it) and banks are allowed to lend out funds from demand deposits (which is called fraud when anyone else does it). Debating the nuances of regulation on top of a system like that is akin to deciding among types of fire extinguishers to use against an oil-well fire.

    Austrian economists hate to say we told you so, not because we don’t like the feeling of being right, but because we suffer from disasters like this as much as anyone.

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