Last night our fearless (sic should be feckless) leader talked to the nation for 12 minutes without answering the question I have had foremost in my mind since the bailout was proposed which is: exactly what is it that the bailout is buying?
Is it stock in the companies that are holding the debt? Is it the base mortgages that unqualified homeowners around the country are unable to pay? Is it the mortgage based securities that the banks created in the slack created by deregulation so they could hide the true value of their loans? Is it the credit default swaps that the insurance industry covered and that caused their demise?
I don't even know if it's possible, but if we could buy up the mortgages themselves and get people out from under the ballooning ARM rates that the slime-ball lenders stuck them with the deal might be worth doing. If we are being bum’s rushed into buying any of the other stuff, we ought to run like hell in the other direction so we can be as far from the dirt of Wall Street’s implosion as possible.
This morning, thanks to OMB Watch, I finally found an article that explains in spades what it is that BushCo is telling us we have to buy and buy RIGHT NOW. BushCo wants us to buy Mortgage Based Securities.
I say let Wall Street keep their securities. We ought to offer to buy up all the mortgages represented by the MBSs, but not the MBSs themselves. The upshot would be that the government – through FannieMae and FreddieMac, in both of which we now own significant stock – could refinance the mortgages at current market prices and reasonable rates while Congress works on legislation to restore regulatory control over the lending industry.
So what would happen to Wall Street? Those who engineered and made the disastrous deals could look for work. Maybe if they are lucky some of those homeowners would hire them to cut the grass.
Would the country take an economic hit? Yes, indeed. We would lose all the false value the Wall Street paper represents, but then it was all BS in the first place wasn’t it?! There was no real value there. It was all based on the deceptions of a deregulated industry whose only concern was inflating the value of underlying stock so its CEOs could take home hundreds of millions of dollars of easily earned cash. Of course, stock in those companies would go to zilch and we would all feel that.
Would it impact the Main Street, too? Yes it would. It would hit us all pretty darn hard, but I believe that the recovery would put us all in a better place. No lesson is well learned that doesn’t come through pain and sacrifice. This nation has a soft underbelly gained from years of unearned benefits. We need a complete shake-up that results in a re-evaluation of the short-term thinking that got us where we are today. We are a resilient nation that knows how to cope. Wall Street losses wouldn’t destroy us; they would ultimately strengthen us.
The bottom line here is that this bailout, as the OMB Watch article's title tells us, is the end of the free market. How can BushCo claim to preside over the America we had when they took office? Their deregulation has created a capitalism that they are proposing to underwrite with federal funds. No economist has ever defined capitalism in terms of government ownership, so this is another milestone for Shrub. He can now lay claim not only to being the "war president", but he also holds the title of "destroyer of the capitalistic system". Karl Marx would be so proud.
“Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!” – Patrick Henry
Be the change you wish to see in the world. -- M. K. Gandhi
The reason for going was to keep the crude flowing and raise a false flag abroad. – from a poem by Jack Evans titled 3500 Souls - http://www.myspace.com/paralegal_eagle
Individually we have little voice. Collectively we cannot be ignored.
But in silence we surrender our power. Yours in Peace -- BR
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2 comments:
I don't think the "bail out" is meant to purchase anything, as much as it is to rebuild Fort Knox. A mountain of useless greenbacks though seems pointless. Maybe the government should demand it's citizens send their gold teeth fillings and granny glasses to them instead.
I'm sure they'll cash those items in after they're done with us at the holding pens.
Can you believe it was the Republicans who stomped out of yesterday's meeting because they want more tax cuts and refuse to bail out the home-owners?!?! Or that the DemoRats are going to go along with this robbery? Of course you can. It's no break from the usual.
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