Excellent read....$25B Auto Bailout Would Be Band-Aid On Chest Wound..sm
Posted By: ms on 2008-11-19
In Reply to:
$25B Auto Bailout Would Be Band-Aid On Chest Wound
Tuesday, November 18, 2008
Mike Baker
The question really shouldn’t be “Do you support the government bailout?” Instead, the public should be asked “Do you think Barack Obama, Nancy Pelosi, Harry Reid, Barney Frank and the rest of our gang on Capitol Hill are qualified to run the U.S. auto industry, banking industry, insurance industry and other sectors of the American economy?”
If you think big business is best managed and overseen by politicians with no business experience, then the bailout, particularly the bailout of the auto industry, must seem like a pretty good idea. If however you haven’t lost your mind, then throwing $25 billion (on top of the already approved $25 billion for plant retooling) at a business model that is broken might seem, lemme’ see, insane.
Before we go further, I should point out that I have nothing against Detroit, am saddened at the thought of the potential job losses and disheartened at the demise of the once iconic U.S. auto industry. But none of that changes the overriding concern that the only thing $25 billion would do is postpone by a factor of months the inevitable Chapter 11 of one, two or all three of the big three auto companies.
Lest you think that I’m singling out the auto industry while tacitly approving the $700 billion approved for God knows what and the $100 billion plus handed over to AIG, I’m not. Having lived and worked overseas for years and having been exposed to systems ranging from communist to socialist to dictatorial, I feel pretty comfortable saying that massive government involvement in private business eventually results in a big steaming pile of crap. Now that might not be as eloquent as some of the business theories you’ve read, but hopefully the meaning is clear.
While the PWB staff is light on sophisticated economists, it does seem that using a band-aid, even one that costs $25 billion clams, on a sucking chest wound isn’t going to save the patient. Perhaps the leaders of the big three, along with their newest best friend forever Ron Gettelfinger (head of the United Auto Workers union) think they can convince the Congress that if they just had $25 billion they could save the day by restructuring their costs, business model and product line. As opposed to watching the $25 billion go down the drain over the next few months as they continue to pay enormous legacy costs, suffer declining sales and deal with the continued credit crunch. Apparently Nancy Pelosi, using her extensive business management experience, thinks that sounds about right.
In normal political times we might get a good old fashioned difference of opinion on the Hill over an issue as important as the proposed auto industry bailout. But these aren’t normal times. During this blessed honeymoon period as we await the change in administrations, anyone voicing concern over the bailout is viewed as an obstructionist … someone who doesn’t have the best interests of the nation at heart. What a load of crap.
A few Republicans have stood up and suggested that throwing good money (should I point out, our money) at the wheezing GM and inevitably Ford and Chrysler amounts to buying a few more months on life support. The auto chieftains and BFF Gettelfinger (not related to Goldfinger) have marched on Washington to explain that failing to prop them up will result in millions of job losses, the collapse of the free world and the end of the industry that makes those pine tree shaped air fresheners that hang from our rear view mirrors.
This is the same tactic used by AIG and the financial industry. I know we have collective attention deficit disorder as a nation, but does anyone remember Hank Paulson running around the Hill with his hair on fire claiming a huge comet will hit the earth if he didn’t get $700 billion? That was a trick question. Hank is bald; a hair fire is out of the question.
But Hank did get his $700 billion, which as far as I can tell is being dispensed with all the transparency of a Russian off shore company. Some of that $700 billion was mine… some of it was yours … don’t you want to know where the h*ll it’s going? It’s like handing money over to my teenage daughter … not only do I not know where it’s going, but the next day she’s standing in front of me asking for more.
And AIG? Remember them? Apparently, much like people are saying about the auto companies, AIG was just too big to fail. At last count they’ve received two massive infusions of cash. We’ve all heard about their crazy getaway trips to resorts for spa treatments and super boozeups. But does anybody think they could’ve possibly spent the entire $150 billion (give or take a few billion, who can freakin’ keep track) on facials and Cold Duck, or whatever insurance folks throw back on vacation? Even if they spent 10 percent of the bailout money on special executive massages (15 percent with happy ending), that still leaves $135 billion to account for.
And there in lies the rub. Or in AIG’s case, the rubdown. With Hank handing out briefcases full of dosh like Howie Mandel (minus the attractive briefcase ladies), AIG already $150 billion into the trough and the auto companies snuffling around looking for their feedbag, you and me have next to no idea what the h*ll is happening to our money, our children’s money and, frankly, our grandkid’s money. Once again, if you owned a pitchfork and/or one of those old fashioned torches, now would be a good time to pull them out of the shed and go demand that the monster be killed.
What’s that you say? If we don’t bailout the auto companies millions will lose their jobs and the economy will be wrecked? That’s one scenario and I agree, along with everyone that it’s a frightening scenario. And it’s that fear that the auto industry and Mr. “Read my lips, no concessions” Gettelfinger are preying on in the hope that Congress and the White House will pull out the billfold.
What we do know is that, without a bailout, GM will in all likelihood head in to Chapter 11. As with many other large companies before them, that entails restructuring and an actual hardnosed effort to return the company to profitability by making hard choices and changes. Easy? Painless? Absolutely not and no one should underestimate that.
But I’ll bet Bobo the talking intern’s pay for the next six months that a government bailout of $25 billion or more will in all likelihood result in GM eventually heading in to Chapter 11. Which would you rather do? Deal with the problem now, or throw $25 billion on the fire and deal with the problem later?
If the Republicans hold the line I’ll be amazed. The Obamatrons have marched on Capitol Hill and the pressure to display your commitment to blind bipartisanship is building.
Politicians, I hear, aren’t necessarily known for hanging their butts out in the wind and taking a stand. While they may believe it’s the right thing to do, the pressure to go along and, more germane, to not be viewed as responsible for job losses and the pain that will follow a move into bankruptcy, will likely prove too great.
Agreeing to an unsound (political speak for stupid) idea in the name of bipartisanship makes you not only weak but unprincipled as well. I think it’s time we show some fiscal responsibility and save the $25 billion. Frankly, we’ve got to think to the future. We’re going to need the extra cash when AIG heads off for their next out of town conference.
To bail or not to bail? Let me know what you think. As always, we look forward to your comments, thoughts and insight. Send your emails to peoplesweeklybrief@hotmail.com
'Til next week, stay safe.
http://www.foxnews.com/story/0,2933,454444,00.html
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I have some ideas about auto bailout
Let the oil companies bail them out since they directly benefited from some of the bad management decisions.
Don't bail out the companies. Give the money to the workers for re-education, etc., while the auto companies restructure.
My first suggestion was a little cynical, but I'm not sure why the second hasn't occurred to anyone. ...
For those who support the auto bailout........ sm
please answer me this.
If the Big 3 are truly in the dire financial straites they claim to be, surely this did not come on overnight. Surely they did not wake up one morning a couple of weeks ago and say "wow, we have a problem. Let's go get help from Washington." GM has already received help from the government before and it didn't seem to keep them solvent. With that line of thinking, what makes those of you who support the bailout think that they will manage whatever funds (it's up to $34K and possibly growing) they receive wisely and will not allow this to happen again?
Auto Bailout is on C-Span. If you
want to watch it tonight, it will be on at 8 p.m. In the meantime, the plans of GM and Ford are online.
I feel sorry for the Chryler guy. He seems to be the most honest and wants the least amount of money. Sen. Corker - TN told him right out he doubts Chrysler is going to make it even with the money and they should just be bought out by someone and leave the company go.
He was also tough on the UAW Gettlefinger (or whatever his name is). I don't blame him there. The guy was squirming but he kept talking about all the concessions hurting the workers; i.e., not willing to make concessions.
Hope the link works.
Auto industry bailout...(sm)
I happen to think that the auto industry does need a bailout. No, I don't agree with keeping the current management, and I do believe in making stipulations for how that money is spent. I know most of you will disagree with that, but here's what I'm seeing in TN.
Congressman Zach Wamp (R) from TN was on the tube last night talkiing about how he does not want to do the bailout. If that's his opinion that fine ----- However, lets look at his reason. TN has been bidding for a new Volkswagon plant which has recently come to fruition---right here in my home town by the way. He has been pushing for this for years. This is obviously a good thing for people in TN because of the jobs it would create. What I find ironic though is that he would let American companies go down the tubes and yet support a foreign auto maker. My honest opinion about guys like this, is that they want the job creation, regardless of where the real money is going (overseas) and they would like to do this in such a manner so as to cut out unions.
ARRRGGGGHHHH!!!! 
Here's a link for the auto industry bailout
They keep flip-flopping. The second link is Paulson's idea. That was probably posted before but am posting again just in case.
http://www.cnbc.com/id/27721013
http://www.cnbc.com/id/27712153
Bush approves auto bailout........ sm
to the tune of 17.4 billion.
Mr. Bush, in a televised speech before the opening of the markets, said that under other circumstances he would have let the companies fail, as punishment for their own bad business decisions. But given the economic downturn, he said the government had no choice but to step in.
“These are not ordinary circumstances, in the midst of a financial crisis and a recession allowing the US auto industry to collapse is not a responsible action,” Mr. Bush said.
http://www.nytimes.com/2008/12/20/business/20auto.html
Article I read on the auto industry and the election.
Good article and the guy they interviewed, Peter DeLorenzo (?) - a guy all up on the auto biz - said neither McCain nor Obama had a clue when it came to the auto industry. The article gave a little bit of the voting records on both related to the auto industry.
Candidates Voting Record On Auto Industry-Related Issues:
Clean Energy Achievement Criteria (2007): McCain - no vote; Obama - Yes
Preventing Petroleum Export Organizations (NOPEC Act of 2007): McCain - no vote; Obama - Yes
Reduction in Dependence on Foreign Oil (2005): McCain - No, Obama - Yes
Arctic National Wildlife Refuge (No) Drilling Amendment (2005): McCain - Yes, Obama - Yes
Does Palin kno McCain voted no on reducing dependence on foreign oil?
Wound up?
Maybe if you would get off your complacent behind and do some yelling, this country wouldn't be in the fix it's in now!!!
Bandaid on a mortal wound? sm
Looks like the Big 3 got some money but not everything they wanted, only 14 to 17 billion. I guess that is what big business and government consider chump change.  Ford didn't get any at all as they were not in an emergency situation like GM and Chrysler. From the sounds of this article, this will carry then through the holidays and into the new year, but what then? Another bailout or loan? And if they are hurting as badly as they claim, how on earth are the going to pay back the funds as requested "in a few weeks?" 
http://www.reuters.com/article/topNews/idUSTRE4B50CL20081206?feedType=RSS&feedName=topNews&pageNumber=1&virtualBrandChannel=10276
Probably has a band around his
neck that says WWCD?
What would Castro do?
Rush is a Band... nm
and he's a blow-hard.
Yep, they sure like their hookers......and the band played on......
Police Report: Skoien with Two Prostitutes
March 11, 2009
Inverness Police say former Cook County Republican Chairman Gary Skoien admitted having two prostitutes in his children’s playroom when his wife walked in on him early Sunday morning.
The allegation is in a domestic battery report from Skoien, 55, against his 36-year-old, 5-foot-4-inch, 110-pound wife. He said she beat him with her fists and an electric guitar.
But Skoien said the police report inaccurately stated that he had prostitutes in his home. Skoien said he and a friend were talking in the playroom when his wife came down and began beating him.
Eni Skoien spent two nights in a lock-up before being released on a $10,000 personal recognizance bond.
The police report said Skoien had cuts and blood on his hands and there was blood on the walls and stairs near the playroom.
The police report said Skoien “told [the responding officer] he did in fact have prostitutes with him in the playroom when his wife caught him.” The playroom looked like “a struggle of some kind took place there...There were items turned and tossed around the room,” the report said.
“That’s how it was reported to us,” Barrington/Inverness Police Deputy Chief Jerry Libit said.
Allies of Mayor Daley blasted Skoien four years ago when he offered a $10,000 “bounty” four years ago for information that would lead to Daley’s conviction on corruption charges.
The remark got Skoien fired from his real estate job, cost him a seat on the Metra board and prompted calls for his ouster as party chairman, He survived a re-election vote, serving from 2004-2007 as chairman of the GOP, which has not elected a member countywide in 17 years.
Current Republican Party Chairman Lee Roupas said, “It’s an extremely disappointing and unfortunate situation, if the allegations prove to be true.”
Skoien was an aide to former Gov. Jim Thompson and serves as Palatine Township Republican Committeeman.
He said he and his wife of 13 years have been living in separate sections of the house for a while and getting counseling but that he went to police after she hit him last Tuesday while he was brushing his teeth.
“I went to the police to find out what I should be doing,” he said.
On Sunday night, he said his wife was driven home from a function and she went to bed. Skoien called a friend who came over and they were talking in the playroom when his wife woke up and began beating him with her fists and “a hard heavy electric guitar,” he said.
“I called police because I thought I was going to be killed,” Skoien said.
Skoien went to talk to the arresting officers Wednesday after his stories hit the news, trying to convince them that he did not confirm his wife’s contention that she found him with prostitutes.
“If there were hookers, I’m not sure why the police didn’t arrest me -- that’s illegal too,” Skoien said.
He said the officer stuck to his contention that Skoien nodded in affirmance when told his wife’s version of events. Skoien said he disagrees.
Skoien obtained an order of protection that prohibits his wife from having any contact with him or their three children, ages 5, 7 and 8, he said.
I believe the youngest was named after her favorite band...Van Halen....nm
lol
Next auto
Why pay those pesky premiums now when we're young and healthy. And, heck, I'm a good driver. In any case, I'll get a policy once I have an accident.
And my family can get life insurance on me once I'm gone! Pay a premium or two and collect! GOOD DEAL!
And it cracks me up how the auto co's. are now
trying to sell the gas-guzzlers by offering 3 years of subsidized gas (@ $2.99/gal.) for those vehicles. So what are people supposed to do with those vehicles, once the 3 years is up, and the price of gas is then $8/gallon?
Small minds come up with even smaller solutions to the US's problems.
For every auto job loss
that seven other people in this country are affected. Think about it: Bailing out the big 3 IS bailing out the American taxpayer.
But you see which auto workers are
handouts, and the workers are not complaining about their jobs. I am talking about the ones mentioned recently in the news here in the Southeastern US. Those workers are making(including all their benefits) around $35 an hour. The unionized big 3 workers making $70+ an hour for the same work. Is that contract worth that much?
Auto bail out s/m
Read the following report. 8-10% of total cost doesn't seem like a huge percentage for labor costs. Maybe they can't afford the big salaries and bonuses for the top dogs? About time the wealth started being redistributed. Funny I haven't heard any outrage over the outrageous salaries the top dogs in these automobile business are paid. Just whining about how much the UAW workers are paid. It's about time the working class started standing up for the working class!!!!!
Let 'em all go bankrupt. I have no doubt the idjits in Washington are way more concerned about job losses in "developing countries" than those of American citizens.
http://news.yahoo.com/s/ap/20081115/ap_on_bi_ge/auto_bailout_gettelfinger
Auto industry
I feel the same way I felt about the bank bail-outs. I would say no bail-outs for ANY business. I think it borders on extortion. First the banks need a bail-out, then it's the auto companies, then AmX reorganizes so they become a holding company so THEY an qualify for some of that free money. Latest I read the newspapers are to be next in line. Where does it all end?
My reason for my no bail-out opinion is, what did it accomplish for the banking industry? Nothing if we are to believe there is a credit crisis. I noticed this evening one of the local banks was advertising that they still have money available for loans. Why is it that it's the big guys that get into trouble? Let 'em suffer. Bail-outs are going to do nothing for working middle class people.
As I said in an earlier post where do you think new automobiles will fit in consumers priority list when they are trying just to put food on the table and a roof over their heads? Pretty far down I'd say. There are new layoffs announced every day, many have nothing whatsoever to do with the automotive industry.
So that is why I say NO BAIL-OUTS.
One more thing...UAW role in the automobile woes. The public has been dreadfully misled. Most seem to think the workers make some $70 an hour when in truth they make in the neighborhood of $27.00 an hour. Not a word have I heard objecting to the executives who are paid some $6000 PLUS per hour and all kinds of perks like private jets, etc. Wouldn't one think this would have a whole lot to do with their finances? The one thing I think the union should concede is the job bank where they are paid 95%, I think it is, of their wages when they are laid off. The rest of the workforce (and my husband spent his life working as a Teamster) should have to suffer through unemployment just like the majority of other employees. I do think that employer provided benefits such as the unions have should be available to all workers. It most surely comes in handy at retirement. I think everyone should have an opportunity to retire in their older years and Social Security sure doesn't covere living expenses. I wonder if there are any MTs who have retirement benefits? Probably not. Most seem now-a-days hard pressed to even make a living.
And if we did bail out the auto industry......sm
how much is that going to cost us and where is the money going to come from?
I realize this country's economy is in the toilet at this point and people are hurting everywhere, but my question is, like I said above, where is the money going to come from (I don't believe tax increases on the wealthy are going to cover the tab) and what is going to happen when "they" call in the loans?
unemployed auto workers' pay
per their contract, if unemployed they receive FULL pay. The loss would be benefits, but they get full pay for not working if they are laid off. That should give them time for re-education.
If you are going to give money to re-educate the auto workers....... sm
then it would follow that money should be given to sustain and re-educate the people in other industries (MT comes to mind) that are suffering because of big suit mismanagement and jobs going overseas. What about the thousands upon thousands of other displaced workers in the public sector that have lost their jobs? Will they need to be re-educated as well? Will there be jobs available to them, even if they are re-educated?
Maybe that's what all those re-education centers all over America are for. hmmmmmmm
Why such a huge deal made about the auto LOAN
nm
The auto industry's V6 motor is pretty good
We get 28-30 MPH with it. Why they didn't brag this up, I have no idea. It has power, too. We could keep up with the V8's with no problem. Had a very large luxury Delta 98 LS and it was the best car we ever had...but the frame rotted away, so we kept the motor and put it into a Buick LeSabre.
Part of the problem is the unions. I've always been a union supporter, but they have really killed the industry in this country in the past 20 years. That's why there are no steel industries here anymore. That's why auto workers make a fantastic wage. Once they make good to fantastic wages, they won't back down.
Face it. People are greedy and this is a gigantic wake up call, but if they don't want to, or aren't willing to, take pay cuts, or pay more for their health insurance, then we're doomed to fall into a greater depression than seen in the 30s. A me-first-and-only-me economy doesn't work.
Example: Teachers in my area are screaming and going on strike because they don't want to pay more for health insurance. They pay $40 biweekly. I pay $200 a pay and before that, I paid $630 a month. I'm happy paying $200 a month. Are they? Nope. It's me-me-me. When are people going to wake up?
If our bailed-out auto industry doesn't invest enough
over their addiction to fossil fuels to power them, why bother to buy a new one, I'll just keep patching my old one together. At least it's paid-for, so I don't have to support the Evil and Deceitful Banking Industry with my hard-earned money. I'd rather it go to a *real* worker, like my faithful mechanic!
The whole country would crash and burn. Do you know how many jobs in Michigan alone are auto related
Michigan might as well hang a sign on the door saying last one out, turn out the lights. But then if Obama has his way, we won't have any electricity either because the coal companies will be bankrupted too. Domino effect in my opinion.
Bailout
"If the American people ever allow private banks to control the issue of our money, frist by inflation and then by deflation; the banks and corporations that will grow up around them (around the banks) will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered"
-President Thomas Jefferson
here's your bailout
I think that all the CEOs of the big three along with all their members of the board and whatnot, all the big wigs, that have made millions screwing people over for years and years should dip into their OWN pockets and sell a few houses, cancel a few vacations, cash in a few money markets and get their own companies out of debt. Then, when the books are balanced, the people who have been making 80,000 a year to push a button should take a pay cut and NOT go on strike and live like the rest of real America. Then they should be fine.
Bailout
if they fail, do you realize it would affect everyone. Millions of jobs in the auto industry alone. If people don't have jobs, they can't spend money anywhere. Stores will start to close, etc. It will affect everyone.
Bailout
I totally agree 1000% with your analysis - the only time these greedy CEO's give a hoot about us is when they see their profits increase. You can bet your last five cents that if one of us went to them asking for money - they would call the police!! It would be interesting to see the salaries of CEO's in Europe as opposed to what these guys continually fleece us for... 
About That First Bailout
Do you remember who told us "we had to act now or we might face dooms day (sic)" with all that bailout money? It was Hank Paulsen and George Bush. We may as well have flushed that first TARP payment down the toilet. There was no accountability, and no one knows where all that money went.
At least the present stimulus package has accountability built into it and some limits as to what can and can't be done with the money.
the bailout IS making
the US a socialist country - compliments of your beloved GWB and McPalin. congratulations you got your wish.
No Bailout for the rich
Say no to the bailout. The FBI is investigating all of these companies for criminal mortgage fraud.
Why the rush for the bailout
There Is No Crisis--Summary by: Chris BowersTue Sep 23, 2008 at 16:22
Things are getting a little suspicious about this crisis.
1) Why did the Bush administration suddenly declare a crisis during the final two weeks when Congress would be in session during his presidency? Is it maybe because, after the election, Congress would know it wasn't dealing with Bush anymore?
2) If this is such a sudden crisis, why is it that the Bush administration was drawing up the plan for this bill for months beforehand?
3) Why is it that Congress is supposed to bail out many banks and firms that are actually quite successful and profitable right now, and not just those that are failing?
4) Why is Paulson blatantly lying to Congress about oversight?
5) Where did the $700 billion figure come from?
6) Why is Paulson urging that debate on the matter be held after the legislation is passed?The burden of proof should always be placed on those who are demanding a huge government bailout, not upon those who are skeptical that one is needed. And yet the questions keep mounting, with no answers in sight.
I am not saying that there is no need for government intervention. I am saying that the case for a $700 billion bailout is far from having been made. Until the case is made, there is no need to go forward. We will elect a new President in 42 days. We swear in a new Congress in 103 days. What is the rush? Why does this all of a sudden need to be done while the Bush administration is still in charge? The case hasn't been made, and answers are slow in coming, if they come at all. Chris Bowers :: There Is No Crisis--Summary
I don't agree with the bailout
We have some savings, but we still live paycheck-to-paycheck, not wanting to touch the savings. I really don't agree that we taxpayers should have to fund this. I think that the higher ups that walked away with 100s of thousands or even millions should have to pay for this. Charge them with fraud and make them give it back. I certainly don't feel I've put anyone in this situation and therefore don't feel I should have to pay for it.
only 24% of us support the bailout
Yesterday it was reported only 24% of Americans support the bailout, 56% are opposed so 20% have no opinion. Senators' and reps' offices were flooded with calls and emails all day asking that the bailout be opposed. And I was one of those. Everyone should be contacting their own reps to express their opinions. That's they only way they will know what the people want.
Yes, and how about the bailout, ACORN, and
nm
Well.....look at it this way....if they don't push this bailout...
there are folks who know "where the bodies are buried." There is probably so much we DON'T know about all this...and yes, it is disgusting. Dodd and Frank, if they had an ounce of integrity, would apologize to the American people and resign. Pelosi, if SHE had an ounce of integrity, would demand it. So far John McCain is the ONLY one who has said someone should resign, and that was Christopher Cox, the Republican head of the SEC. He SHOULD resign. So should the treasury secretary, Paulson. Every member of that committee that voted back in 2006 to kill the bill McCain co-sponsored should resign. They should all be investigated criminally as well as far as I am concerned. I know the FBI is looking at Fannie/Freddie but talk about a day late and dollar short after Raines, Johnson, Howard, and Gorelick raped the American public for millions.
You're right. They should ALL have to go and start over.
SNL skit on the bailout. sm
Funny but sad because it is true.
http://www.hulu.com/watch/37758/saturday-night-live-c-span-bailout#s-p1-st-i1
TheSmokingGun/bailout
http://www.thesmokinggun.com/archive/years/2008/1007083aig1.html
AIG spa trip, right after gov. bailout approved. This is disgusting.
Not a bailout, entirely voluntary (nm
x
I think we MT's need a bonus and a bailout!
nm
Again, I don't think the problem is the bailout itself, (sm)
but rather the way it's used, which right now leaves a lot to be desired. As far as the rest of the country being screwed, well that's coming either way. We have 2 choices--we can either do nothing, lose millions of jobs and go into a full-blown depression; or we can take a chance with bailing them out (preferably with stipulations) and owe a lot of money. I think my preference would be to pay more taxes if need be, but still have a job so I could feed my family instead of not being able to do either of the above.
But, the first bailout passed because
the dems had the majority of votes. Am I right or did I lose my mind? DON"T ANSWER THAT QUESTION, PLEASE. LOL
Bailout dies in Senate.........sm
It's over, at least for this year. I don't know, and the article did not state, whether there will be more talks after the first of the year.
http://www.reuters.com/article/topNews/idUSTRE4B50CL20081212?feedType=RSS&feedName=topNews
A little satire about the bailout scam. sm
A sense of humor can help in stressful times.
From The Nation to the nation:
"Dear Lucky American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury Paulson"
Bailout as a Nigerian Request for Help
Ron Paul's comments on the bailout. sm
Dr. No is still working for us in Congress.
Dear Friends:
The financial meltdown the economists of the Austrian School predicted has arrived.
We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market's attempt to re-establish rational pricing of houses and other assets.
Last night the president addressed the nation about the financial crisis. There is no point in going through his remarks line by line, since I'd only be repeating what I've been saying over and over - not just for the past several days, but for years and even decades.
Still, at least a few observations are necessary.
The president assures us that his administration "is working with Congress to address the root cause behind much of the instability in our markets." Care to take a guess at whether the Federal Reserve and its money creation spree were even mentioned?
We are told that "low interest rates" led to excessive borrowing, but we are not told how these low interest rates came about. They were a deliberate policy of the Federal Reserve. As always, artificially low interest rates distort the market. Entrepreneurs engage in malinvestments - investments that do not make sense in light of current resource availability, that occur in more temporally remote stages of the capital structure than the pattern of consumer demand can support, and that would not have been made at all if the interest rate had been permitted to tell the truth instead of being toyed with by the Fed.
Not a word about any of that, of course, because Americans might then discover how the great wise men in Washington caused this great debacle. Better to keep scapegoating the mortgage industry or "wildcat capitalism" (as if we actually have a pure free market!).
Speaking about Fannie Mae and Freddie Mac, the president said: "Because these companies were chartered by Congress, many believed they were guaranteed by the federal government. This allowed them to borrow enormous sums of money, fuel the market for questionable investments, and put our financial system at risk."
Doesn't that prove the foolishness of chartering Fannie and Freddie in the first place? Doesn't that suggest that maybe, just maybe, government may have contributed to this mess? And of course, by bailing out Fannie and Freddie, hasn't the federal government shown that the "many" who "believed they were guaranteed by the federal government" were in fact correct?
Then come the scare tactics. If we don't give dictatorial powers to the Treasury Secretary "the stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet." Left unsaid, naturally, is that with the bailout and all the money and credit that must be produced out of thin air to fund it, the value of your retirement account will drop anyway, because the value of the dollar will suffer a precipitous decline. As for home prices, they are obviously much too high, and supply and demand cannot equilibrate if government insists on propping them up.
It's the same destructive strategy that government tried during the Great Depression: prop up prices at all costs. The Depression went on for over a decade. On the other hand, when liquidation was allowed to occur in the equally devastating downturn of 1921, the economy recovered within less than a year.
The president also tells us that Senators McCain and Obama will join him at the White House today in order to figure out how to get the bipartisan bailout passed. The two senators would do their country much more good if they stayed on the campaign trail debating who the bigger celebrity is, or whatever it is that occupies their attention these days.
F.A. Hayek won the Nobel Prize for showing how central banks' manipulation of interest rates creates the boom-bust cycle with which we are sadly familiar. In 1932, in the depths of the Great Depression, he described the foolish policies being pursued in his day - and which are being proposed, just as destructively, in our own:
Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion.
To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection - a procedure that can only lead to a much more severe crisis as soon as the credit expansion comes to an end... It is probably to this experiment, together with the attempts to prevent liquidation once the crisis had come, that we owe the exceptional severity and duration of the depression.
The only thing we learn from history, I am afraid, is that we do not learn from history.
The very people who have spent the past several years assuring us that the economy is fundamentally sound, and who themselves foolishly cheered the extension of all these novel kinds of mortgages, are the ones who now claim to be the experts who will restore prosperity! Just how spectacularly wrong, how utterly without a clue, does someone have to be before his expert status is called into question?
Oh, and did you notice that the bailout is now being called a "rescue plan"? I guess "bailout" wasn't sitting too well with the American people.
The very people who with somber faces tell us of their deep concern for the spread of democracy around the world are the ones most insistent on forcing a bill through Congress that the American people overwhelmingly oppose. The very fact that some of you seem to think you're supposed to have a voice in all this actually seems to annoy them.
I continue to urge you to contact your representatives and give them a piece of your mind. I myself am doing everything I can to promote the correct point of view on the crisis. Be sure also to educate yourselves on these subjects - the Campaign for Liberty blog is an excellent place to start. Read the posts, ask questions in the comment section, and learn.
H.G. Wells once said that civilization was in a race between education and catastrophe. Let us learn the truth and spread it as far and wide as our circumstances allow. For the truth is the greatest weapon we have.
In liberty,
Ron Paul
Letter to Congress re the bailout. sm
The bailout has stalled. Please contact your reps and tell them NO to the bailout. Phone calls, emails, and letters are having an impact. People have already lost their homes and jobs. According to experts in economics, this is going to cause inflation to soar and a depression.
Letter below is from someone who is on the verge of losing their home, and gave permission to copy it.
Almost 300 years ago the founders of this country believed in freedom and liberty so much that they risked everything—their property, prosperity, comfort, honor, and even their very lives—on the near impossible gamble of taking on the world’s greatest superpower, at that time, to win the liberty that we enjoy today. That example has inspired Americans through the ages until the present day to reach for greatness despite the presence of risk and uncertainty. Against these dangers the intrepid push forward, knowing the price of failure, yet never succumbing to fear because our system is so robust in its scope that failure can be overcome and the rewards of hard work eventually achieved. In these troubled financial times, we are tempted by fear to shy away from the responsibility that liberty requires and instead hearken to the safety net of socialism. George Washington and his men had no safety net. The price of failure for them was certain death.
More money can always be made, but once we give up our freedom for socialism we can only buy it back with blood and death. CongressPerson, that is too high a price for the rescue of a few banks that should have known better. Let them suffer the consequences of their actions. Let the markets buy up their assets and redistribute them as only a free market can. Bring back sound money and the value backed currency the Constitution requires. Stop the central bankers at the Federal Reserve from ruining our country. There will be some pain, just like there was in the winter at Valley Forge, but in the spring, the economy will thrive again just as did the army that won our freedom.
I call on you now CongressPerson to fight for our freedom. Fight with all your might and strength the way our troopers did at Cowpens. Do not surrender. Do not sell us out. Fight for us and our liberty CongressPerson, as if we were about to lose it…because we are.
RJH
Norman, OK
PS I am a homeowner in distress. I stand to avoid the specter of foreclosure if you pass the bailout…but PLEASE DON’T PASS IT! I would rather lose my house than see America lose her freedom. In time I can buy another house.
The Roundtable is chatting about the bailout.
Newt Gingrich, George Will, Steven Pearlstein, and Robert Reich are "debating".
The terms of the bailout will be posted on line around noon today. I think we all should read it to see what it's all about.
Because the bailout is a corrupt piece of
Most people do not even realize that HALF that money they are stealing from us is going DIRECTLY to foreign investors, i.e., the China
2-step......read up on it. Better yet, I'll send a link... sickens me to no end!!!!!
http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=234
The O also voted for the bailout package. (nm)
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