Category Archives: Corporate Welfare
Amy Goodman interviews investment banker turned journalist, Nomi Prins, and Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends in the video. The transcript of the interview can be read here. Some of the choice quotes from the interview below:
NOMI PRINS: It’s insane, actually. It’s bad math, and it’s a bad precedent, because they’re not simply bailing it out with putting taxpayers’ money through the Fed into taking on the risks of these companies; they’re taking on risks. They’re not bailing out and selling debt; they are taking on the risk. They’re becoming-the Fed is continuing to become a larger and larger hedge fund. And it’s doing it with taxpayer money, and it’s doing it with the future debt of the United States.
So, for the one thing, they’re not attaching any rules to these bailouts. You know, you bail out Bear Stearns, effectively you’re putting up $30 billion to take Bear Stearns’s junk and say, “Alright, we’ll back the junk. JPMorgan Chase, you take Bear Stearns. We’ll back whatever junk is there.” But there’s no decision to say, “But, you know, you’ve got to tell us what’s there. And JPMorgan, by the way, as you’re taking on this bank, you have to explain to us what you really have. And Bank of America, you have to explain to us what your risks are.”
I know that at Bank of America they were struggling with their own risks and trying to figure out what was going on in their own company, and now they have assumed Merrill Lynch. That creates a tremendous institution, where the Fed is now obligated, when that starts to have more and more trouble, which it will.
Our government is nationalizing private debt. Too many people, progressives included, are saying these moves by the Fed are needed to keep our economy stable. Yet our government refuses to take care of, or bail out, the Social Security system. A system which takes care of the elderly and disabled. Our government will NOT be bailing out the pension funds, the labor funds or the small investors who are being bankrupted by the current financial meltdown.
So, how is giving billions to these private entities going to help the average joe and jill?
It won’t. Simply put…it will take years if not decades for pension funds and individual investors to recoup their losses, if they can at all.
And thats wrong on every damn level to me. This article in The Nation tells us who is taking the hard hit in this horseshit, and its not the banks, its people like you and me. Its people like Mildred:
She is not a rich woman and her retirement investments have been decimated by the perpendicular drop in the stock market. Despite a lifetime of working and saving, like a thrifty squirrel burying acorns in the backyard, she’s now broke.
One of the places she buried her acorns was AIG, thinking it would be hard to find a more conservative, rock-solid place to put her retirement money. She bought AIG preferred shares, that is, shares that are guaranteed to pay dividends and are thus ideal for retirement.
What none of the experts let the investors know was that somewhere along the path, AIG had stopped being rock-solid. Before Mildred knew it, the government had bought AIG and wiped out the stockholders. She, along with others, read in the papers that AIG’s new owners will not be paying preferred stockholders their promised dividends.(emphasis mine)
Where is Mildred’s parachute? It doesn’t have to be golden like the CEO’s get, just enough so she doesn’t have to work until the day she dies. Naomi Klein ties all this bullshittery to BushCo in the video below.
Profits are a private matter but losses are a public responsibility? Since when? Since our government bailed out the airline and insurance industries after 9/11. Where is the end of this process? The American automakers are now looking to the Federal Government now for their handout after years of getting their financial asses kicked by Japanese automakers. Will our federal government once again reward incompetence?
My guess is yes…they will. The only question remaining is:
Will regulation of these industries and financial systems be part of the bail out package? Will the Glass-Steagall act be resurrected?
Not if Phil Gramm has any say in the matter…
These bastards want to socialize something..socialize healthcare you scum-sucking bags of batshit! They sure hate socialism until they need it to cover their own greedy asses, don’t they? Friggin amazing.
A Progressive Solution to this friggin mess:
Bring financial markets under control. Government must ensure that financial transactions are transparent and fundamentally fair. If a bank is too big to fail, then it must face public scrutiny and federal regulation. No private financial institution should be allowed to pocket its winnings and make the taxpayers responsible for its losses.
Keep the secondary mortgage market under control. There is no reason to re-privatize Fannie Mae and Freddie Mac. Fannie Mae was a federal agency for thirty years. If it had remained a public body instead of a private one, the mortgage crisis would likely have been much less severe.
Focus on the economic wellbeing of Americans instead of the profits of rich corporations. It is irrational to bail out giant corporations that willfully took imprudent risks, while refusing to help average Americans who are feeling their economic pain. We must jump-start the economy by investing in clean energy; better schools; and safer bridges, highways and levees, simultaneously creating millions of new jobs.
Kate Whitley flap continues, as well it should..Via TPMmuckraker:
Yesteday, Rep. Henry Waxman (D-CA) wrote a letter to Defense Secretary Robert Gates urging the department to comply with the Congressional subpoena issued for Whitley.
“We believe the Department’s actions are completely without justification. The Department has provided no valid legal basis for its decision to prevent a witness from complying with a duly authorized congressional subpoena. The President has not asserted executive privilege over the testimony of Dr. Whitley. During the hearing, Subcommittee Chairman Tierney asked Mr. Dominguez whether there had been any assertion of executive privilege, and he testified that there had not been.
In addition, the committee also wants to know precisely why officials didn’t want Whitley to testify. The letter to Gates also asked for all emails and other internal communications relating to the request for Whitley’s testimony.
If the Pentagon does not comply, the committee threated to subpoena three high-ranking Pentagon officials to a hearing on Sept. 12 to testify about the Defense Department’s legal rational for not allowing Whitley to testify.
Late Update: Gates has agreed to let Whitley testify
Most US Corporations paid no taxes…wtf??
About two thirds of U.S. corporations paid no federal taxes between 1998 and 2005, according to a new report from the Government Accountability Office. Sen. Carl Levin (D-MI), who was among the Democratic lawmakers who requested the study, said it proves that many corporations are using “tax trickery” to send profits overseas and avoid paying U.S. taxes. (New York Times)
If that shit doesn’t piss you the hell off, your not paying attention.
Friggin jerk my chain you sumbitch. This declaration by the Idiot-in-Chief just chaps my ass. Look, I am not saying that every idiot that got a mortgage needs to be bailed out, especially those that don’t make enough to afford all ‘the house’ they bought..but a flat out veto threat by Bush, while allowing the Fed to continue to bail out Bear Stearns and other financial corporations that got greedy, while refusing to help homeowners is total and complete horseshit. From the NYT writeup:
The president on Wednesday repeated his opposition to a bill “that will reward speculators and lenders” who have suffered because of their own foolishness. More modest measures are pushed by Republicans leaders, and Mr. Bush said those steps “will do the right thing for the American people.”
He has the audacity to talk about rewarding speculators?? WTF do you call the jerks at Bear Stearns and the rest of the investors that BushCo is willling to ‘shore’ up? Lets revisit this article that I posted about recently:
But when policymakers turned to cutting the funds rate last fall in the midst of the sub-prime mortgage debacle and housing market meltdown, they discovered that this tool had been rendered essentially powerless.
The banks and other key financial institutions with which the Fed deals had been so shaken that, instead of borrowing money and lending it out, they borrowed funds but hoarded them. The financial institutions feared they themselves might need the funds. (emphasis mine)
This is so hosed up. The Fed is paranoid that the banking industry is going to shit itself so it plans on a wholesale welfare handout. From the LA Times:
Moving to stop the economy from stumbling further, the Federal Reserve said Friday that it would pump more cash into U.S banks to keep the nation’s financial system from seizing up.
The surprise action came as the Fed formally signed on to tough new rules for the credit card industry announced a day earlier by other regulators. The two initiatives were the latest examples of how the Fed, under the chairmanship of Ben S. Bernanke, is asserting its willingness to take charge in disparate parts of the economy.
Of course it should go without saying…don’t buy into the “take charge” admission from Benny Bernanke. That is a PR statement to paint this giveaway in a different light.
Hey Benny..pay my bills too ok? Come on Benny I am a good little consumer..or I used to be dude. Ya Fuck…
Today, Wednesday, Bennie Bernanke will be facing some Congress critters that plan to ask him wtf is up with the $30 Billion welfare check to bailout Bear Stearns. From the NYT link:
Taken together, most experts say that what the Fed has done in the last several months is unparalleled in modern times. Indeed, the Bear Stearns deal relied on a provision of the Federal Reserve Act not used since the 1930s. As a result, investment experts, many Americans and most members of Congress are bursting with questions.
Mr. Bernanke has yet to explain, for example, exactly how he negotiated the Bear Stearns deal, how he decided to accept the $30 billion in dubious collateral, who set the share price for Bear Stearns and what role was played by Treasury Secretary Henry M. Paulson Jr., a former Goldman Sachs executive.
On Wednesday the Fed chief begins two days of testimony, his first opportunity to answer some of these questions. They are certain to focus not only on Bear Stearns but also on why the Fed and others let things deteriorate to the point of crisis, and whether their actions should serve as a precedent or guideline for the future of regulation of the financial sector.
Must see TV on Cspan..I will hunt down the internet link if anyone is interested..and you should be you know..