If You Want to Bail Out Main Street Then.....Bail Out Main Street!

truck wreckWhat's the reality?    

 

Main Street is getting run over by a Mac Truck called Corporatism and has been for years.

Don't believe me?   Take a look at this scandal story covered in the New York Times, which I will call Boys Club:

Two weeks ago, the nation’s most powerful regulators and bankers huddled in the Lower Manhattan fortress that is the Federal Reserve Bank of New York, desperately trying to stave off disaster.

As the group, led by Treasury Secretary Henry M. Paulson Jr., pondered the collapse of one of America’s oldest investment banks, Lehman Brothers, a more dangerous threat emerged: American International Group, the world’s largest insurer, was teetering.   A.I.G. needed billions of dollars to right itself and had suddenly begged for help.

In a separate meeting on Sept. 15 to discuss financial aid for A.I.G., the only participating Wall Street chief executive was Lloyd C. Blankfein of Goldman Sachs, Mr. Paulson’s former firm. Mr. Blankfein had particular reason for concern.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements.  A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.

Get that?   Goldman Sachs is the only private company in a meeting to decide the fate of AIG.  The CEO of Goldman Sachs in a meeting with the Treasury Secretary, an Goldman Sachs Ex-CEO and Goldman Sachs stood to lose $20 Billion Bucks.  Magically AIG is saved.  Lehman Brothers is left to die.

So, now that that cat is out of the bag.....let's answer the screaming Pundits on T.V.

Every talking head is screaming, SCREAMING on how Main Street Is Wall Street!

I've got news fer ya, Main street is not Wall Street and these people cannot even grasp why the average Joe is so royally pissed.

Let's go through the hysterical whines and screams one by one.

  1. Threat:   You'll Lose Your Job!
    • Answer:  Main Street Already Lost Their Jobs!   You outsourced them, brought in cheap labor, committed age discrimination, denied work to single mothers, and even insulted people claiming somehow they didn't have what it takes anymore to compete!  (no, nothing about cheap labor here, on no, Americans now plain sucked)
  2. Threat: You Can't Get a Loan to Send Your Kid to College!
    • Answer: We already cannot afford to send our kids to college! So what if we get a loan, you outsourced our jobs so we cannot pay the loan off!
  3. Threat: You Can't Get a Car Loan
    • Answer: So? They are repossessing my current car as it is!
  4. Threat: You Can't Buy a Home!
    • Answer: Uh, bone heads, we were already foreclosed on!
  5. Threat: You'll Lose Your 401k and Retirement!
    • Answer: We already lost our retirement when you offshore outsourced the jobs and allowed things like the Tech bubble and Enron. We also used it to pay our health care bills and house payments.

Wall Street, feel our pain.    Fun, isn't it?

 

Ok, so now that we have established how Multinational corporations in collusion with a corrupt Congress have been royally f**king the middle class for years now, what's next?

Clearly people have plain revolted at the idea of letting Paulson get their taxpayer dollars while they are busy declaring bankruptcy because they had the audacity to get sick.... yet something must be done so what? (the wall street whines are getting to me) 

One thing I heard from of all corrupt ex-politicians, Newt Gingrich:

suspend the mark-to-market rule which is insanely driving companies to unnecessary bankruptcy. If short selling can be suspended on 799 stocks (an arbitrary number and a warning of the rule by bureaucrats which is coming under the Paulson plan), the mark-to-market rule can be suspended for six months and then replaced with a more accurate three year rolling average mark-to-market

They also want to suspend the Sarbanes-Oxley Act rule.  Highly suspect to be sure, yet supposedly Sarbanes-Oxley does cost quite a bit in accounting fees.

So, instead of letting the Treasury Secretary rob the treasury to bail out his pals.... maybe it would be better to risk a few Enrons, at least temporarily, for 90 days or so, just give them what they want. 

That at least buys some time, can be accomplished in ten minutes, requires no Congress and more importantly might get a real plan that truly does bail out main street promoted and digested by real people (not the fictional ones Nancy Pelosi is referring to!) 

 

The smoke and mirrors, whines and screams are designed to keep you afraid....very afraid. 

They are trying to keep your head from wrapping around what's really going on and thus understand what should be done.   Of course of all things, Don't Panic!  So, Breathe, everybody breathe.

But the reality is the failed bail out will will not bail out main street.    This is yet more spin and this time, people are simply getting more and more angry at the duped attempts.  Now pundits are using their scary song and the market correction to really give you a Boogie Man.  He ain't under the bed, he's got his hand in your wallet.

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Comments

If You Want to Bail Out Main

An idea I am hearing floated is take the 700 billion and divide it up among the taxpayers -

think of all the car loans, student loans, mortgages, credit cards that would get paid off, thus alleviating the debt crisis.

As well as the new consumer spending it would generate - taxes would be paid in the form of sales taxes and the boost would aslo be taxed as income

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Stimulus

The $700B sent to citizens would be used to buy foreign goods. Citizens are a pass through. That is why FDR like programs are so much less effective today than in the 1930's when the money stayed in the U.S.

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I'm really not sure it is worth saving

Yes, it'll be hard. Yes, you might be leaving the city and your "safe" job to forage for food in the countryside for a while. But I'm not sure that an economy based on credit is worth saving- at all.

I say, set usury rates at one half of the CPI. Anybody charging more than that for a loan, the government takes the extra money and gives it back to the debtor to pay off the loan faster.

And leave the usury rate there. With NO real profit for loaning money, nobody will do it. With no way to get loans, people will HAVE to save up to buy things again. Massive deflation and unemployment will set in for a while, until the immutable law of supply and demand lowers the prices until supply=demand at the new level. Foreign goods will become more expensive as prices fall compared with what is already in our warehouses.

Businesses based on fraud and credit will fail, businesses based on providing real value for cash and investing that cash into labor and product will survive.

And in the end, we'll all be better off.

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Maximum jobs, not maximum profits.

Remember the S & L crisis?

>Massive deflation and unemployment will set in for a while,
>until the immutable law of supply and demand lowers the
>prices until supply=demand at the new level.

To slam in a change by jumping straight to where you want to end up creates exactly the kind of shock that can rip things apart like say for example, Saving & Loan institutions. Woah there cowboy! How about phasing in an adjustment like that so we don't end up with one step forward and two steps back?

Massive unemployment isn't necessary to repolarize the economy away from borrowing but it will ruin peoples finances, lives and physical and mental health as they end up homeless and starving. BTW, in the Great Depression, many unemployed people just ended up back on a relative's farm as an extra hand while today there is no equivelant safety net.

On the whole I agree we must wean ourselves off borrowing.

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