L’Shana Tova Umetuka Tikatevu
May you be inscribed in the book of a Good and Sweet Year.
Day: September 29, 2008
Catherine Austin Fitts: Financial Coup d’etat
Please try to listen to at least the first 3 of these videos, lots of great info. ~ Lo
Today on Flashpoints: Another special extended edition of Community Business with Catherine Austin Fitts, as we continue to cover the meltdown on Wall Street and its reverberations on Main Street; we’ll feature listener calls and a close look at the implications of a $700 billion dollar bailout.
Penny Pritzker
01:00 Intro: Economic Meltdown and the Sub-Prime Culprit Penny Pritzker
Dennis and Nora06:00 Community Business with Catherine Austin Fitts: A Crumbling Empire
Catherine Austin Fitts, solari.com
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see
Stuff the Bankers by Dale Allen Pfeiffer
Eat Your Cats and Dogs by Joel S. Hirschhorn
FINALLY Someone Said “No” by Richard C. Cook
Exclusive: Resolving the Wall Street Financial Crisis: Monetary Reform
Black Monday? Global Investors vote “No” on Paulson’s Bailout
Stuff the Bankers by Dale Allen Pfeiffer
by Dale Allen Pfeiffer
featured writer
Dandelion Salad
Dale’s blog post
Sept 29, 2008
I’ll parse as few words as possible. We don’t need this bailout. The economy will not crash if Congress doesn’t pass it. What is more, the bailout itself could sink the economy.
No economists were consulted about this bailout. No one knows where Paulson came up with the $700 billion figure. Investor Marc Faber, who is considered a reliable judge of these things, believes the actual amount of the bailout necessary will be closer to $5 trillion.
Every economist worth his or her credentials has gone on record against this bailout. Nobody has offered any details on what they want to do with this money. The best we can figure is that Paulson intends on giving extravagant Christmas presents to all his banking buddies.
So how’s this for a bailout package. We use this $700 billion to develop a reliable mass transit system throughout the country, and to rebuild our communities so they can go back to being more self-sufficient. That means relocalizing production and agriculture, and placing the necessary markets within walking distance. And while we’re at it, we can refurbish our homes for energy efficiency.
Now I haven’t run the figures on all this, but I am willing to bet it will not cost $700 billion. And all of this retooling would actually provide jobs and stimulate local economies, instead of swelling some financiers’ pockets.
Unfortunately, between the war debt and the bailouts, we are wasting any chance we might have to do something positive for the people of this country. Our future security is being mortgaged to pay off a pack of thieves.
This amounts to a banker’s coup on the US government and the taxpaying public. As a part of this legislation, the financial institutions which benefit from this bailout will become agents of the government. According to the most popular definition, that is fascism.
The $700 billion bailout will cost every man, woman and child in this country $2,000. My nephew’s newborn daughter will be indebted before she is even a month old. And if the true amount of the bailout is actually $5 trillion, then the amount owed by every man woman and child in this country will jump to $14,000. A family of four will accrue $56,000 of debt in order to pay off the imbeciles who got us into this mess in the first place.
And with all that, the bailout will not solve the problem. It may delay disaster for a few months, but the fall will be even harder when it does come. The next swing of the pendulum could bring down our entire country. So what would happen if the US was placed into receivership?
It is too late to stop the bailout. But we can make damn sure our politicians know how we feel about it. I sure as hell will not vote for anyone who supports this bill — including presidential candidates.
Anyone for a tax rebellion?
see
The Economy Sucks and or Collapse
Eat Your Cats and Dogs by Joel S. Hirschhorn
FINALLY Someone Said “No” by Richard C. Cook
Ron Paul: You’re Going To Destroy A Worldwide Economy!
Exclusive: Resolving the Wall Street Financial Crisis: Monetary Reform
Black Monday? Global Investors vote “No” on Paulson’s Bailout
Eat Your Cats and Dogs by Joel S. Hirschhorn
by Joel S. Hirschhorn
featured writer
Dandelion Salad
www.foavc.org
September 29, 2008
Nations come and go, rise and fall as elites and the wealthy make victims of most citizens and plutocracies prevail. Current dogma is that we live in the greatest nation on Earth. Perhaps in terms of ideals there is some truth to that. But with another trillion dollars that we now must borrow at higher costs because of the meltdown of the financial sector, solidifying our position as the greatest debtor nation, Americans have little to be proud of. Our government and politicians as well as the corporate state have failed us. What do our young people and future generations have to look forward to? Be prepared to eat your cats and dogs.
America Should Listen To Ahmadinejad By Paul Craig Roberts
By Paul Craig Roberts
29/09/08 “ICH”
The full text of Iranian President Mahmoud Ahmadinejad’s speech to the UN General Assembly last week was printed in the Israeli newspaper, Haaretz (9-25-08).
Although our Founding Fathers would have comprehended and endorsed Ahmadinejad’s speech to the United Nations, present-day Americans would find it strange should they happen to hear about it.
Unlike their forbears, Americans today live a material life, not a spiritual one. Americans are far too likely to dismiss Ahmadinejad’s words about obeisance to God and justice as the mumbo-jumbo of an “Islamist extremist.”
The hubris of Americans and their belief in U.S. “exceptionalism” would cause them to reject Ahmadinejad’s holding the US, its NATO puppets, and Israel accountable before the UN General Assembly. So successfully has Ahmadinejad been demonized by the propagandistic US media that his speech would be dismissed out of hand by the arrogance of those who regard themselves as the salt of the earth.
Ahmadinejad echos the statements of other world leaders when he says that US power is rapidly waning. The US “superpower” is dependent on foreigners for its financing. The US cannot exist without Chinese financing, just as Europe cannot exist without Russian energy. America’s European puppet regimes are rethinking the consequences of serving US hegemony.
A “superpower” that cannot subdue Iraq and Afghanistan cannot subdue Russia and China. Do Americans and their neocon leaders believe that China and Russia will lend the US the money to finance a war against themselves? Do they believe that Russia will keep America’s NATO puppets supplied with energy if American aggression against Russia intensifies?
Warnings about America’s financial dependency on foreigners have been ignored.
The bailout of the US financial system is entirely dependent on the willingness of the Chinese, Saudis, and other foreigners to use their trade surpluses with the US to purchase the US Treasury instruments that must be sold in order to raise the money for Bush’s bailout of the financial institutions.
The bailout of the US government’s budget has been going on for years, and it takes place every time the US Treasury holds an auction of new American debt. But now the bailout by foreigners of the US government is starting to turn into much larger sums that carry much higher risks.
Last week the Financial Times reported that Peer Steinbruck, the Finance Minister of Germany, said that the American financial crisis was “a fundamental rupture” and that “the US will lose its status as the superpower of the world financial system.”
Steinbruck is being charitable. The US lost that status when it became dependent on foreigners to finance American consumption of foreign goods and US goods and services produced offshore in addition to the war-swollen budget deficits of the US government. Indeed, foreigners finance Americans’ home mortgages. The Chinese alone hold about $400 billion of Fannie Mae and Freddie Mac bonds.
Is Ahmadinejad correct in his view that, with the waning of American hegemonic power, the world is on the verge of a better, more humane, and more just world? I wonder. Many Americans think of themselves as hard-nosed realists. They believe that it is a dog-eat-dog world: We have to get “them” before they get us. This paranoid view is the basis of US foreign and military policy. It holds that America must not only have the military power to overwhelm any combination of possible enemies, but also America must prevent the rise of any country or countries that could challenge American power. This is a “diplomacy” without any concept of peaceful coexistence or good will among men. Yet, Americans think of themselves as a Christian nation.
Neocons and macho Republicans think we don’t win our wars because we lack the balls to use enough force. They believe that the US should nuke every country that doesn’t follow our orders. Indeed, many American “conservatives” are lusting for the US to nuke a country in order “to teach the world a lesson.”
To accommodate this blood-lust, the Bush Pentagon revised US war doctrine to permit preemptive nuclear attack even upon non-nuclear-armed countries. During the long cold war, preemptive nuclear attack was not a US option.
Which vision of the future will win out? Ahmadinejad’s policy of peaceful co-existence or neoconservative desires for American world dominance? The chance is too high for comfort that the hubris and arrogance of the United States will lead to a nuclear confrontation that will destroy the world.
People of good will hope that Ahmadinejad and Steinbruck’s views will prevail and that the rest of the world will wake up and ask if they want to continue financing America’s hegemonic ventures that threaten life on earth. The day the foreign bankers turn off the credit spigot to the US Treasury, American arrogance will be tamed.
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions. He can be reached at: PaulCraigRoberts@yahoo.com
see
Should We Fear Iran? The Peter Principle Playoffs By Sheila Samples
The Economy Sucks and or Collapse
Mahmoud Ahmadinejad on Larry King Live
Democracy Now!: Iranian President Mahmoud Ahmadinejad
Myth of Iran wiping Israel off the map dispelled (interview with Ahmadinejad)
FINALLY Someone Said “No” by Richard C. Cook
See also: “They Just Don’t Get It” By Richard C. Cook
by Richard C. Cook
featured writer
Dandelion Salad
richardccook.com
Sept. 29, 2008
FINALLY, someone said “No” to the criminal gang that runs the U.S. economy when the House voted down the Bush-Paulson $700 billion Wall Street bailout plan by a vote of 228-205.
Shame on the Democrats! Speaker of the House Nancy Pelosi, Majority Leader Steny Hoyer, and Majority Whip Rahm Emanuel delivered “yea” votes from 60 percent of Democratic House members and thereby gave the bill the only chance of passage it had. Continue reading
Ron Paul: You’re Going To Destroy A Worldwide Economy!
http://cspanjunkie.org/ September 29, 2008 C-SPAN
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see
Dow falls nearly 7 percent in wake of House bailout defeat
Exclusive: Resolving the Wall Street Financial Crisis: Monetary Reform
Black Monday? Global Investors vote “No” on Paulson’s Bailout
Rep. Dennis Kucinich Rejects $700 Billion Bailout
Tell Congress: No to Bailout! (Action alerts)
Financial Bailout: Thanks but No Thanks – What Lincoln would have said by Ellen Brown
The Fiscally Insane Bailout Bill Might Not Pass By David Sirota
No Bailout for Wall Street Billionaires by Prof. James Petras
Dow falls nearly 7 percent in wake of House bailout defeat
By Kevin G. Hall
McClatchy Newspapers
09/29/2008
WASHINGTON — Congressional leaders and the Bush administration vowed to revive a $700 billion Wall Street rescue after rebellious Republicans defied their leadership and killed the controversial plan Monday.
The surprising demise of a bill that had been the subject to intense neogtiations for days sent U.S. and global financial markets plunging. The Dow closed down 778.68 points, a nearly 7 percent drop. It was the largest one-day point drop in history, but as a percentage it fell below other historic declines.
[…]
see
Exclusive: Resolving the Wall Street Financial Crisis: Monetary Reform
Black Monday? Global Investors vote “No” on Paulson’s Bailout
Rep. Dennis Kucinich Rejects $700 Billion Bailout
Tell Congress: No to Bailout! (Action alerts)
Financial Bailout: Thanks but No Thanks – What Lincoln would have said by Ellen Brown
The Fiscally Insane Bailout Bill Might Not Pass By David Sirota
No Bailout for Wall Street Billionaires by Prof. James Petras
Black Monday? Global Investors vote “No” on Paulson’s Bailout
By Mike Whitney
09/29/08 “ICH”
The wrangling continued on the floor of the House of Representatives all weekend, but it is still unclear whether there’s enough support to pass Treasury Secretary Paulson’s $700 billion Emergency Economic Stabilization Act of 2008. Paulson says he has the votes, but Paulson has been wrong before. The bigger question, is whether buying up the illiquid mortgage-backed assets from the nation’s banks will be enough to save the financial system from an impending meltdown. The jury is out on that question, too. Professor Nouriel Roubini, chairman of Roubini Global Economics, summed it up like this, “You’re not resolving the two fundamental issues: You still have to recapitalize the banking system, and household debt is going to stay high”. A large number of economists believe Roubini is right. The bill will not solve the underlying problems.
Still, senators and congressmen are expected to hold their noses and pass Paulson’s bailout anyway, fearing that if they don’t, the country’s financial system will come crashing down around them. They could be right, too. The banking system is undercapitalized, the credit markets are frozen, and foreign creditors are beginning to slow their purchases of US debt. It’s all bad. At the same time the number of casualties among the financial giants–Bear Stearns, Indymac, AIG, Lehman, Washington Mutual–continues to grow. Three more struggling European banks were added to the list of financial institutions that needed emergency government assistance this past weekend. It’s no wonder Congress feels like they have to do something to stop the bleeding.
Before the stock market opened on Monday, the futures markets had slumped heavily into negative territory, while the TED spread, an indicator of stress in interbank lending, had widened to 3.19, a level that suggests another rocky week of trading ahead. Could this be another Black Monday?
Paulson’s bill is designed to avert a system wide crash by clearing the banks’ balance sheets so they can resume extending credit to consumers and businesses. The hope is that massive infusion of capital will “turn back the clock” to the happy days of low interest speculation and bubble economics. Paulson is a “one trick pony” who firmly adheres to the belief that wealth creation depends on maximum leverage and an ever-weakening currency. But that world view is no longer applicable after reaching Peak Credit, where consumers are no longer able to make the interest payments on their loans and businesses and financial institutions are forced to curb their spending and dump their toxic assets at firesale prices. The system is deleveraging and nothing can stop it. Paulson has yet to accept the new reality.
Besides, there’s no guarantee that the banks will use the money in the way that Paulson imagines. As one Wall Street veteran explained to me, “I don’t see one penny of that $700 billion ending up helping the broader economy. I see it being used to prop up share prices so the insiders can salvage as much as possible when dumping their shares”.
Indeed, the $700 billion is just part of a massive “pump and dump” scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream. The US is headed into its worst recession in 60 years. The housing market is crashing, securitzation is kaput, and the broader economy is drifting towards the reef. The banks are not going to waste their time trying to revive a moribund US market where consumers and businesses are already tapped out. No way; it’s on to greener pastures. They’ll move their capital wherever they think they can maximize their profits. In fact, a sizable portion of the $700 billion will likely be invested in commodities, which means that we’ll see another round of hyperbolic speculation in food and energy futures pushing food and fuel prices back into the stratosphere. Ironically, the taxpayers largess will be used against him, making a bad situation even worse.
Then again, if the bill isn’t passed, no one can predict with certainty what will happen. Here’s how Tim Shipman summed it up in “Bailout Failure Will Cause US Crash”, in the UK Telegraph:
“Officials close to Paulson are privately painting a far bleaker portrait of the fragility of the global economy than that advanced by President George W Bush in his televised address last week.
One Republican said that the message from government officials is that ‘the economy is dropping into the john.’ He added: ‘We could see falls of 3,000 or 4,000 points on the Dow [the New York market that currently trades at around 11,000]. That could happen in just a couple of days.
‘What’s being put around behind the scenes is that we’re looking at 1930s stuff. We’re looking at catastrophe, huge, amazing catastrophe. Everybody is extraordinarily scared. It’s going to be really, really nasty.’”
The fear on Capital Hill is palpable, especially among the Democrats who have led the effort to pass Paulson’s boondoggle ASAP. Speaker of the House, Madame Botox, and fellow Democratic Party leaders, Chris Dodd, Harry Reid and the blabbering blowhard from Massachusettes, Barney Frank, have done everything in their power to sandbag dissenters, quash resistance, and rush the bill to a vote without the usual deliberation and debate. Rep. Marcy Kaptur (D-ohio) was one of many angry congressman who lashed out at Pelosi’s highhandedness. It’s all caught on a one minute video on you tube.
Rep. Marcy Kaptur:
“The normal legislative process that should accompany a monumental proposal to bail out Wall Street has been shelved. Yes, shelved! Only a few insiders are doing the dealing. These criminals have so much power they can shut down the normal legislative process of the highest lawmaking body in this land. All the committees that should be scanning every word that is being negotiated have been benched. And that means the American people have been benched. We are constitutionally sworn to protect this country against all enemies foreign and domestic, and yes, my friends, there are enemies….The people who are pushing this bill are the very same one’s who are responsible for the implosion on Wall Street. They were fraudulent then; and they are fraudulent now. We should say No to this deal”. (Dennis Kucinich: Is this the U.S. Congress or the Board of Directors at Goldman Sachs! + Sounds Like Insider Trading To Me!)
Republicans were equally furious at the way the Pelosi Politburo kept the rank and file out of loop as much as possible. Rep. Michael Burgess (R-Texas) summarized the feelings of a great many congressmen who felt they were being railroaded by Pelosi and Co:
“We have seen no bill. We have been here debating talking points …House Republicans have been cut out of the process and derided by the leaders of the House Democrats as “unpatriotic” for not participating in supporting the bill. Mr. Speaker, I have been thrown out of more meetings in the last 24 hours than I ever thought possible as an elected official of 800,000 citizens of N. Texas….Since we didn’t have hearings, since we didn’t have markup, let’s at least put this legislation up on the Internet for 24 hours and let the American people see what we have done in the dark of night. After all, I have never gotten more mail on a single issue than on this bill that is before us tonight.” (Rep Burgess: We Are Under Martial Law! As Declared By The Speaker Last Night!)
Predictably, Rep Dennis Kucinich (D-Ohio) gave the best speech of the day railing against the financial industry and defending the interests of working class Americans.
Rep. Dennis Kucinich:
“The $700 bailout bill is being driven by fear not fact. This is too much money, in too short of time, going to too few people,while too many questions remain unanswered. Why aren’t we having hearings…Why aren’t we considering any other alternatives other than giving $700 billion to Wall Street? Why aren’t we passing new laws to stop the speculation which triggered this? Why aren’t we putting up new regulatory structures to protect the investors? Why aren’t we directly helping homeowners with their debt burdens? Why aren’t we helping American families faced with bankruptcy? Isn’t time for fundamental change to our debt-based monetary system so we can free ourselves from the manipulation of the Federal Reserve and the banks? Is this the US Congress or the Board of Directors of Goldman Sachs? (Watch the whole speech: Dennis Kucinich: Is this the U.S. Congress or the Board of Directors at Goldman Sachs! + Sounds Like Insider Trading To Me!)
There is greater opposition to the Paulson bill than any legislation in the last half century. The groundswell of public outrage is unprecedented, and yet, Congress–completely insulated from the demands of their constituents–continues to blunder ahead following the same pro-industry script as their ideological twins in the White House. There’s not a dime’s worth of difference between the two parties. Not surprisingly, neither Pelosi nor any of the Democratic leadership has even met with any of the more than 200 leading economists who have stated unequivocally that the bailout will not address the central problems that are wreaking havoc on the financial system. Instead, they have caved in to Bush’s demagoguery and the spurious claims of G-Sax bagman Henry Paulson, a man who has misled the public on every issue related to the subprime/financial fiasco so far.
There are parts of Paulson’s Emergency Economic Stabilization Act of 2008 that every US taxpayer should understand, even though the media is attempting to keep the details obscured. In sections 128 and 132; the proposed bill will suspend “mark to market” accounting. This means that the banks will no longer be required to assess the worth of their assets according to what similar assets fetched on the open market. For example, Merrill Lynch just sold $31 billion of mortgage-backed securities for $6 billion, which means that similar bonds should be similarly priced. Simple; right? The banks need to adjust the value of those assets on their balance sheet accordingly. This gives investors and depositors the ability to know whether their bank is in bad shape or not. But Paulson’s bill lifts this requirement and allows the banks to assign their own arbitrary value to these assets, which is the same old Enron-style accounting bullsh**.
Paulson bill also proposes the “Elimination of FASB 157 and 0% reserves”. This is just as sketchy as it sounds. FASB or Financial Services Regulatory Relief Act reads:
“Federal Reserve Banks are authorized to pay banks interest on reserves under Section 201 of the Act. In addition, Section 202 permits the FRB to change the ratio of reserves a bank must maintain relative to its transaction accounts, allowing a zero reserve ratio if appropriate. Due to federal budgetary requirements, Section 203 provides that these legislative changes will not take effect until October 1, 2011.”
Blah, blah, blah. It’s all legal mumbo jumbo to conceal the fact that the banks can continue to operate with insufficient capital, which is why the system is currently blowing up. It all get’s down to this: The reason the system is exploding is because the various financial institutions have been allowed–via deregulation–to act as banks and create as much credit as they choose without a sufficient capital base. When one reads about massive deleveraging; this relates directly to the fact that under-capitalized businesses were operating with too much debt in relationship to their capital. That’s it in a nutshell; forget about the CDOs, the MBSs, the CDS and the whole alphabet soup of derivatives garbage. They were all inserted into the system so greedy Wall Street landsharks could expand credit without supervision and balance trillions of dollars of debt on the back of a one dollar bill. This is why Paulson wants to suspend the rules which would bring credibility and trust back to the system. After all, that might impinge on Wall Street’s ability to enrich itself at the public’s expense.
Finally, Nouriel Roubini sites a study by Barry Eichengreen, “And Now the Great Depression”, which points out why Paulson’s $700 billion plan is likely to fail:
“Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is NOT the most effective and efficient way to recapitalize the banking system….
A recent IMF study of 42 systemic banking crises across the world provides evidence of how different crises were resolved.
First of all only in 32 of the 42 cases there was government financial intervention of any sort; in 10 cases systemic banking crises were resolved without any government financial intervention. Of the 32 cases where the government recapitalized the banking system only seven included a program of purchase of bad assets/loans (like the one proposed by the US Treasury). In 25 other cases there was no government purchase of such toxic assets. In 6 cases the government purchased preferred shares; in 4 cases the government purchased common shares; in 11 cases the government purchased subordinated debt; in 12 cases the government injected cash in the banks; in 2 cases credit was extended to the banks; and in 3 cases the government assumed bank liabilities. Even in cases where bad assets were purchased – as in Chile – dividends were suspended and all profits and recoveries had to be used to repurchase the bad assets. Of course in most cases multiple forms of government recapitalization of banks were used.” (Nouriel Roubini’s Globl EonoMonitor http://www.rgemonitor.com/blog/roubini )
In short, it won’t work. Nor is it designed to work. The bill is just Paulson’s way of carving a silver canoe for he and his brandy-drooling investor buddies so they can paddle away to some island paradise while the rest of us drown in a bottomless ocean of debt.
see
Rep. Dennis Kucinich Rejects $700 Billion Bailout
Rep Burgess: We Are Under Martial Law! As Declared By The Speaker Last Night!
Tell Congress: No to Bailout! (Action alerts)
Financial Bailout: Thanks but No Thanks – What Lincoln would have said by Ellen Brown
The Fiscally Insane Bailout Bill Might Not Pass By David Sirota
No Bailout for Wall Street Billionaires by Prof. James Petras
Ralph Nader: Wall Street toppled
Full text of the bailout bill (subject to revision) + Summary
Rep. Dennis Kucinich Rejects $700 Billion Bailout + Plan being rushed with no alternatives
Updated: added another interview with Kucinich; scroll down.
Democracy Now!
Sept 29, 2008
“Is this the United States Congress or the Board of Directors of Goldman Sachs?” Rep. Dennis Kucinich Rejects $700 Billion Bailout
The House is set to vote today on a $700 billion emergency bailout plan for the financial industry. The proposed legislation was forged during a marathon negotiating session over the weekend between lawmakers from both parties and Treasury Secretary Henry Paulson. The 110-page bill would authorize Paulson to initiate what is likely to become the biggest government bailout in US history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates. [includes rush transcript]
U.S. Deploys Radar, Troops To Israel
By Gyle S. Putrich
26 Sep 2008
http://www.defensenews.com
U.S. European Command (EUCOM) has deployed to Israel a high-powered X-band radar and the supporting people and equipment needed for coordinated defense against Iranian missile attack, marking the first permanent U.S. military presence on Israeli soil.
More than a dozen aircraft were required to transport an AN/TPY-2 X-band radar to Israel. (U.S. Missile Defense Agency)
More than a dozen aircraft, including C-5s and C-17s, helped with the Sept. 21 delivery of the AN/TPY-2 Transportable Radar Surveillance/Forward Based X-band Transportable (FBX-T), its ancillary components and some 120 EUCOM personnel to Israel’s Nevatim Air Base southeast of Beersheba, said sources here and in Stuttgart, Germany.
[…]
h/t: Cem Ertür
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See
The Fiscally Insane Bailout Bill Might Not Pass By David Sirota
By David Sirota
Blog for Our Future
AlterNet
September 29, 2008
Here’s 5 Reasons It Shouldn’t
The scheme would force taxpayers to absorb the pain, while Wall Street execs reap the gain.
There was news Sunday afternoon of a congressional deal to bailout Wall Street fat cats with $700 billion of taxpayer cash (you can read the draft legislation here [pdf]). Though the deal negotiated between congressional leaders and the White House is better than what Treasury Secretary Henry Paulson originally proposed early last week, it remains an insulting atrocity, having omitted even basic aid to homeowners, bankruptcy reforms and any modicum of future financial industry regulation. Now, New York Times reports that the Democratic leadership may not have the votes to pass this bailout. So without further ado, here are the top 5 reasons (in no order) why every single member of Congress — Democrat and Republican — should vote this sucker down. Please feel free to copy and paste this post into an email to your congressperson. They are deciding right now — let them hear your voice.
1.This Bailout’s Inherent Fiscal Insanity Could Make Problem Worse
When an individual consumer uses a new credit card to pay off astounding debt from an old credit card, it’s akin to check kiting, which is is illegal. Apparently, though, when the government does it, it’s billed as Serious Public Policy. Because that’s what this supposedly prudent bailout bill would do: Force taxpayers to borrow $700 billion from foreign banks to pay off the bad debt of Wall Street banks. During a crisis that is aimed at preventing interest rates from skyrocketing, nobody has been able to explain how adding almost a trillion dollars to the interest rate-exacerbating national debt would do anything other than undermine the plan’s underlying objective. Worse, the U.S. Treasury Department itself admits that the $700 billion number is “not based on any particular data point” — that is, they created it out of thin air because “We just wanted to choose a really large number.” Slapping that amount of money onto the national credit card when our government can’t even justify the amount is beyond absurd — it is insane.
It didn’t have to be this way, of course. As I noted in my newspaper column this week, Senator Bernie Sanders proposed a temporary tax on millionaires to finance part of this bailout. Similarly, Blue Dog Democrats proposed a future tax on financial firms if and when taxpayers lose cash on the deal. These proposals were discarded in favor of language asking the government to “submit a plan to Congress on how to recoup any losses,” according to the Associated Press. Not only is that language toothless, but it opens up the possibility of a plan being submitted that says we should raise middle-class taxes or slash middle-class social programs to pay for Wall Street’s misbehavior.
2. Experts on both the left and right say this bailout could make things worse
Primum non nocere is the latin phrase for “first do no harm” — the priority principle for any EMT working on a sick patient. It should be the same priority for Congress at this moment — and a growing group of esteemed experts on both the Right and Left are insisting that this bailout bill could make things worse. Here’s a review:
- The Washington Post reported on Friday, almost 200 academic economists “have signed a petition organized by a University of Chicago professor objecting to the plan on the grounds that it could create perverse incentives, that it is too vague and that its long-run effects are unclear.”
- NYU’s Nouriel Roubini, the visionary who had been predicting this meltdown, says “The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan.”
- Harvard’s Ken Rogoff, a Former Federal Rerserve and IMF official, insists that the prospect of this bailout is, unto itself, taking a manageable problem and making it into a more intense crisis. He says that credit is frozen primarily because banks want to avoid dealing with other banks that might drive a hard bargain, and instead would rather wait for free money from the government. Without the prospect of that free money, Rogoff suggests that credit would probably begin moving again, if slowly.
- Dean Baker of the Center on Economic and Policy Research says that spending so much cash so quickly on such a poorly conceived plan could have the effect of making it impossible to fund economic stimulus that is the real way out of this mess. “Suppose the Paulson plan goes through,” he writes. “It is virtually certain that the economy will weaken further and the number of foreclosures and people without jobs will continue to rise. This is the fallout from a collapsing housing bubble…When families respond to their loss of home equity by cutting back their consumption it will deepen the recession. In this context it might prove very important to have the resources needed to provide a substantial stimulus. [and] there is no doubt that this bailout will make further stimulus much more difficult to sell politically.”
Meanwhile, it’s not even close to clear that this is a problem that requires such an enormous response. As mentioned above, the Treasury Department admits it has absolutely no factual basis for requesting $700 billion — an amount equivalent to about 5 percent of our entire economy. Additionally, the Washington Post reports that “Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.” Indeed, “many smaller banks said they were actually benefiting from the problems on Wall Street” and “even some of the nation’s largest banks, which have pushed hard for a federal bailout, deny that the current situation is forcing them to reduce lending.”
The questions, then, are simple: In the face of this bipartisan opposition from objective experts, why should a lawmaker instead believe the same Bush officials who helped create this crisis with their deregulation, the same Bush officials who just months ago said everything was AOK? Shouldn’t there be almost complete unanimity among both objective and partisan observers before spending 5 percent of our entire economy after just one harried week of White House demands? Fool me once shame on you, fool me twice, shame on me. It’s time, as The Who said, that we “don’t get fooled again.”
3. There are clearly better and safer alternatives
The mantra throughout the week has been that America has “no choice” but to pass Treasury Secretary Henry Paulson’s $700 billion giveaway — that, in effect, there are no alternatives. But that’s an out-and-out lie — one with a motive: Making it seem as if the only thing we can do is hand the keys to the federal treasury over to both parties’ corporate campaign contributors.
The truth is, there are a number of alternatives. Here are just a few:
- In the Washington Post last week, Galbraith outlined a multi-pronged plan shoring up and expanding the FDIC, creating a Home Owners Loan Corporation, resurrecting Nixon’s federal revenue sharing, and taxing stock transactions (a tax that would fall mostly on speculators) to finance the whole deal.
- The Service Employees International Union has drafted a plan based around a massive investment in public services and national health care, and regulatory reforms preventing foreclosures and forcing banks to renegotiate the predatory terms of their bad mortgages.
- For those in the mindless, zombie-ish “someone has to do something, so we have to do what the White House says!” camp, consider the possibility that you are under the spell of the same kind of White House fear that led us to invade Iraq because of Saddam’s supposed WMD. Consider, perhaps, that there may not even be a compelling basis for doing anything just yet (or at least not anything nearly so huge), and that the whole reason there is this urgent push right now has nothing to do with the financial situation, and everything to do with creating the political dynamic to pass a wasteful giveaway — one that couldn’t be passed otherwise without a sense of emergency. And ask yourself why you would listen to this White House instead of listening to those experts who have been predicting this crisis and are now advising against this bailout — experts like CEPR’s Baker. In two separate posts (here and here), he says that letting the problem play out could be the best path, because Treasury and the Fed may already have the tools they need. Following this path, the worst thing that happens is “The Fed and Treasury will have to step in and take over the banks [which] is exactly what many economists argue should happen anyhow,” Baker writes. “So the outcome of the worst case scenario is a really frightening day in which the whole world financial system is shaken to its core, followed by a government takeover of the banks. Eventually the government straightens out the books and sells them off again. But the real threat here is not to the economy, it is to the banks.”
- Then there is the idea of simply taking the $700 billion and simply give it to struggling homeowners to help them pay off part of their mortgages. This hasn’t even been discussed but the thought experiment it involves is important to understanding why there is, indeed, an alternative to the Paulson plan. If the root of this problem is people not being able to pay off their mortgages, and those defaults then devaluing banks’ mortgage-backed assets, then simply helping people pay their mortgages would preserve the value of the mortgage-backed assets and recharge the market with liquidity. That would be a bottom-up solution helping the mass public, rather than a top-down move helping only financial industry executives.
On this latter proposal, some may argue that giving any relief to homeowners is “unfair” in that those homeowners created their problems, so why should taxpayers have to help them? But then, is helping homeowners any less fair than simply giving all the money away to Wall Street, no strings attached? I’d say no — and helping homeowners also serves a second purpose: namely, keeping people in their homes, which not only helps them, but helps an entire neighborhood (as any homeowner knows, nearby properties can be devalued when foreclosures hit).
4. Any Incumbent Voting for This Puts Themselves At Risk of Being Thrown Out of Office
As a preface, let me state that I think we live in a country where politicians too often listen to their donors and to the Establishment rather than their constituents, not the other way around. America is a country where our leaders dishonestly invoke the concepts of “Statesmanship” and “Seriousness” and their supposed hatred of “pandering” to justify ignoring what the public wants (as if giving the public what it wants is somehow not the objective of a democratic republic). So, in short, I don’t think there’s anything wrong with this bill being “politicized” by coming down the pike right before an election — in fact, I think it’s a good thing because the election — and the fear of being thrown out of office forces our politicians to at least consider what the public wants. I mean, really — would we rather have this decision made after the election, when the public can be completely ignored?
Polls overwhelmingly show a public that sees voting for this bill as an act of economic treason whereby the bipartisan Washington elite robs taxpayer cash to give their campaign contributors a trillion-dollar gift. As just two of many examples, Bloomberg News’ poll shows “decisive” opposition to the bailout proposal, and Rasmussen reports that their surveys show “the more voters learn about the proposed $700 billion federal bailout plan for the U.S. economy, the more they don’t like it.” Put another way, this bailout proposal has unified both the Right and Left sides of the populist uprising that I described in my new book and that is now even more angry than ever.
Any sitting officeholder that votes for this — whether a Democrat or a Republican — should expect to get crushed under a wave of populist-themed attacks from their opponents. We’ve already seen it start. In Oregon, Democratic challenger Jeff Merkley (D) is airing scathing television ads hammering Republican incumbent Gordon Smith for potentially supporting the deal. Similarly, this morning on Meet the Press, we saw Republican Senate challenger Bob Schaffer (CO) dishonestly papering over his own votes for deregulation and ripping into his opponent Rep. Mark Udall (D) for potentially supporting the deal. Incumbents, get ready for that kind of election-changing heat in your face if you vote “yes.”
This, by the way, could play out in the presidential contest. Barack Obama has been taking the advice of the Wall Street insiders in his campaign in endorsing this bailout. McCain has endorsed the vague outline, but he may ultimately back off once he sees the details, allowing him to then run the last month of the campaign as the economic populist in the race. I’m not saying it would work, considering McCain’s 26-year record of supporting the deregulatory agenda that created this crisis. But such a move could end up help him flank Obama on the defining economic issues of the race.
5. Corruption and Sleaze Are Swirling Around These Bailouts — and America Knows It
The amount of brazen corruption and conflicts of interest swirling around this deal is odious, even by Washington’s standards — and polls suggest the public inherently understands that. Consider these choice nuggets:
- Warren Buffett is simultaneously advising Obama to support the deal, while he himself is investing in the company that stands to make the most off the deal.
- McCain’s campaign is run by lobbyists from the companies that stand to make a killing off a no-strings government bailout.
- The New York Times reports that the person advising Paulson and Bernanke on the AIG bailout was the CEO of Goldman Sachs — a company with a $20 billion stake in AIG.
- The Obama campaign’s top spokesman pushing this deal is none other than Roger Altman, who Bloomberg News reports is simultaneously “advising a group of investors who are trying to prevent their shares from being diluted in the U.S. takeover of American International Group Inc.” — that is, who have a direct financial interest in the current iteration of the bailout.
Add to this the fact that the negotiations over this bill have been largely conducted in secret, and you have one of the most sleazy heists in American history.
**********
If this bill passes, it will be a profound referendum on the dominance of money over democracy in America. That — and that alone — would be the only thing an objective observer could take away from the whole thing.
Money will have compelled politicians to not only vote for substantively dangerous policy, but vote for that policy even at their own clear electoral peril. Such a vote will confirm that the only people these politicians believe they are responsible for representing are are the fat-cat recipients of the $700 billion — the same fat cats who underwrite their political campaigns, the same fat-cats who engineered this crisis, and want to keep profiteering off it. Any lawmaker who takes that position is selling out the country, as is any issue-based political non-profit group — liberal or conservative — that uses its resources to defend a “yes” vote rather than demand a “no” vote. This is a bill that forces taxpayers to absorb all of the pain, and Wall Street executives to reap all of the gain. It doesn’t even force the corporate executives (much less the government leaders) culpable in this free fall to step down — it lets them stay fat and happy in their corner office suites in Manhattan.
Even if they believe that something must be done right now, lawmakers should still vote no on this specific bill, and force one of the very prudent alternatives to the forefront. They shouldn’t just vote no on Paulson’s proposal — they should vote hell no. Our economy’s future depends on it.
David Sirota is a best-selling author whose newest book, “The Uprising,” was just released this month. He is a fellow at the Campaign for America’s Future and a board member of the Progressive States Network — both nonpartisan organizations. His blog is at www.credoaction.com/sirota.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
see
Tell Congress: No to Bailout! (Action alerts)
No Bailout for Wall Street Billionaires by Prof. James Petras
Ralph Nader: Wall Street toppled
Financial Bailout: Thanks but No Thanks – What Lincoln would have said by Ellen Brown
Full text of the bailout bill (subject to revision) + Summary
China’s Bloodless Taking Over of The USA by Guadamour
Rep Burgess: We Are Under Martial Law! As Declared By The Speaker Last Night!
Bernie Sanders: Any company that is too big to fail is too big to exist!
The Obama-McCain debate: Right-wing politicians agree on bailout and militarism
By Patrick Martin
http://www.wsws.org
29 September 2008
Friday night’s presidential election debate between Democrat Barack Obama and Republican John McCain demonstrated that there is no choice in the 2008 presidential election within the confines of the official two-party system. Two candidates stood facing each other, espousing nearly identical positions in defense of Wall Street and American militarism which would, in any other country in the world, immediately identify them as representatives of the ultra-right.
Both agreed that all possible resources must be mobilized to prop up Wall Street, regardless of the cost to working people. Obama declared, “We have to move swiftly and we have to move wisely,” although he did not explain why speed was required to save the banks and speculators, but not to stop foreclosures, layoffs and the destruction of working class living standards.
McCain praised the bailout talks in Washington, saying, “We are seeing, for the first time in a long time, Republicans and Democrats together, sitting down, trying to work out a solution to this fiscal crisis that we’re in.”
Two days earlier, President Bush went on national television, to all but declare the bankruptcy of American capitalism, warning of an “imminent collapse” of investment banks, “the gears of the American financial system … grinding to a halt,” “a financial panic” and “a long and painful recession.”
[…]
The Obama-McCain debate: Right-wing politicians agree on bailout and militarism.
FAIR USE NOTICE: This blog may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
see
Be a Freedom Writer – Take Action: Open the Debates
Nader: Who Lost? Peace Activists, Consumers, Workers
Hypocrisy or democracy? Ralph Nader on Russia Today
Barack Obama and John McCain Presidential Debate 09.26.08
Pop-up Double Talk: Ole Miss Debate
No Bailout for Wall Street Billionaires by Prof. James Petras
by Prof. James Petras
Global Research, September 28, 2008
Ten Reasons to Oppose the Wall Street Bailout
Treasury Secretary Paulson and President Bush backed by the Democratic Congressional leadership have asked Congress for $700 billion dollars to bailout Wall Street financial institutions.
Over the past several years these banks reaped billions of dollars borrowing and speculating on mortgages, securities and other financial paper with virtually no capital covering their bets. With the fall in the housing market, Wall Street’s financial debts skyrocketed, the value of their holdings evaporated and they are saddled with trillions of dollars of debt.
Paulson, Bush and the Congressional leadership want the US taxpayer to buy Wall Street’s worthless private debts, saddling current and future generations of US taxpayers with worthless paper.
Paulson/Bush and the Congressional leaders falsely claim that failure to bailout the Wall Street swindlers will lead to the collapse of the financial system. In fact, almost 200 of our leading economists from the most prestigious universities reject Paulson’s bailout. The truth of the matter is that withholding funds to Wall Street will lead to the collapse of the swindler-speculator-run financial system, which created the current economic debacle.
The Federal Government can and should use the hundreds of billions of public money to establish a national, publicly controlled banking and investment system subject to oversight by elected representatives. The collapse of the current bankrupt financial system is both a threat and an opportunity: The collapse of this corrupt system has led to the loss of jobs and frozen credit and lending; the establishment of a new publicly owned banking system offers an opportunity to finance the priorities of the vast majority of the American people: the re-industrialization of our economy, a universal national health program, securing and extending social security into the next century, rebuilding our decaying infrastructure and many other programs essential to the American way of life.
The problem is not the false alternative of bailing out Wall Street or financial chaos and collapse: The real choice is between subsidizing swindlers or establishing a responsible, responsive and equitable publicly run financial system.
Ten Reasons to Oppose the Wall Street Bailout
1. In a market economy capitalists justify their profits by the risk of losses that they take. Gamblers cannot keep their profits and pass their losses to the taxpayers. They have to take responsibility for their bad decisions.
2. Much of the toxic (garbage) debts were based on fraudulent practices – opaque financial instruments unrelated to real assets (but which generated huge commissions). Bailing out swindlers only encourages more swindling.
3. The US Treasury will purchase worthless paper, the private banks will retain any assets of value. We buy the lemons, they drive the Cadillacs.
4. The chance of the Treasury recovering any value from their purchases of bad debt is near zero. The taxpayers will be stuck with paper with no buyers.
5. The long-term effect of a bailout will be to double the
public debt and undercut funding for Social Security, Medicare, Medicaid, education and public health programs while increasing the tax burden of future generations.
6. The dollar will devalue as the government debt will decrease its attractiveness overseas, increasing the cost of imports and resulting in an inflationary spiral which will further undermine working people’s living standards.
7. The channeling of funds to Wall Street will divert funds from getting us out of this deepening recession.
8. The bailout will deepen the financial crisis because, according to the Director of the Congressional Budget Office, it will expose the fact that many institutions may be carrying many more ‘toxic assets’ and reveal that those institutions are not solvent. In other words, the Treasury and Congress are freeing up bad debts to insolvent institutions.
9. The bailout is aimed at facilitating lending; but if the problem is not credit but (as the Congressional Budget Office has shown) the insolvency of the financial institutions, the solution is to create solvent financial institutions.
10. The bailout totally ignores the financial needs of 10 million homeowners facing foreclosures; the bankruptcy of small enterprises facing a credit crunch and the loss of workers’ jobs and health plans for their families because of the recession.
Alternatives to the Wall Street Bailout
The speed with which this gigantic amount of public funds had been made available by the Treasury and Congress puts the lie to their argument that popular programs cannot be funded or need to be cut back. In fact, investing $700 billion in the health and education of American workers will increase productivity, open markets and expand consumer power leading to a virtuous circle increasing public revenues and eliminating the budget and trade deficits.
Public funds invested in manufacturing, construction, education and health care leads to products with real use value and has a multiplier effect on the rest of the economy instead of ending up in the pockets of billionaires who speculate and invest in mergers and overseas buyouts.
The Treasury and Congress have inadvertently revealed that federal financing is readily available to rebuild the US economy, guarantee decent living wages and provide health care for everyone if we choose elective officials who are committed to the needs of the US workers and not the Wall Street billionaires.
James Petras is a Bartle Professor (Emeritus) of Sociology at Binghamton University, New York. He is the author of 63 books published in 29 languages, and over 560 articles in professional journals, including the American Sociological Review, British Journal of Sociology, Social Research, Journal of Contemporary Asia, and Journal of Peasant Studies. He has published over 2000 articles in nonprofessional journals such as the New York Times, the Guardian, the Nation, Christian Science Monitor, Foreign Policy, New Left Review, Partisan Review, Temps Moderne, Le Monde Diplomatique, and his commentary is widely carried on the internet. His publishers have included Random House, John Wiley, Westview, Routledge, Macmillan, Verso, Zed Books and Pluto Books. He is winner of the Life Time Career Award, Marxist Section, of the American Sociology Association, the Robert Kenny Award for Best Book, 2002, and the Best Dissertation, Western Political Science Association in 1968. His latest books are: Zionism, Militarism and the Decline of US Power, and Rulers and Ruled in the US Empire
© Copyright James Petras, Global Research, 2008
The url address of this article is: www.globalresearch.ca/index.php?context=va&aid=10362
see
Ralph Nader: Wall Street toppled
The Economy Sucks and or Collapse
Full text of the bailout bill (subject to revision) + Summary
China’s Bloodless Taking Over of The USA by Guadamour
Rep Burgess: We Are Under Martial Law! As Declared By The Speaker Last Night!
Ralph Nader: Wall Street toppled
Another great interview with Ralph. Why can’t he be our next president? Did hear that the third parties are trying to get a debate going, see http://www.thirdpartyticket.com/. ~ Lo
Bree Walker
Nader calls it again!
Wall St billionaire bailout busts broad range of Americans.
Dandelion Salad 