Saturday, January 10, 2009

$700 Billion???

If I'm wrong please correct me, and I'm sure someone will, but wasn't the $700 Billion Wall Street bailout supposed to get the economy moving? According to the newspapers it doesn't seem to be working...

"According to the latest statistics available from the Illinois Department of Employment Security, McHenry County was saddled with an unemployment rate of 6 percent in November – up from 3.9 percent from the same time last year. Kane County’s unemployment rate climbed from 4.5 percent to 6.3 percent during that same period, and Lake County’s rate jumped from 4.8 percent to 7.7 percent." (NWH 1/9/09 Report says 
4.6 million out of work).

That is a lot of people out of work.

Robert Reich, from his blog, put it pretty succinctly...

"Wall Street is a different story entirely. There's no good reason for taxpayers to continue bailing out the Street. TARP hasn't worked. Some $350 billion later, credit markets are still quite frozen. The only obvious beneficiaries of TARP have been the executives, creditors, and shareholders of the big Wall Street banks, who have come out better than they would have had there been no Wall Street bailout."

What has happened is that the creators of this mess have been rewarded. George W. Bush & Cos. started out with a goal, in my personal opinion, to redistribute wealth from the middle class to the wealthy. They started out just simply wanting to cut taxes for the wealthy while also cutting programs that favored the poor. Pretty traditional strategy one would think. But 911 allowed them to start a war. And we all know there is money to be made in a war. Haliburton is sitting fat and sassy these days as a result of the largess bestowed upon them by Bush.

Next, you quicken the pace and deepen the reach of deregulation to as many industries as you can. While deregulating you put the former heads of those same industries in charge of the agencies that oversee those industries. Put the fox in the hen house if you will.

Next, you prepare for the possible chance of not being totally in power forever by packing the Courts with like minded individuals so that you can maintain the change in the rules (aka: laws) you have pushed through Congress these past 8 years.

Tack onto these all the lies you need and you have the makings of a disaster.

The ultimate goal here was to redistribute wealth, make it so wealth is concentrated in the few so that you ultimately return the country and the economy to the good old days before the middle class even existed. It allows industry to control the jobs and control the money. You make it so that we little people know our place in the scheme of things. The golden rule to them is those who have the gold make the rules.

So, now we return to power and we are left with a disaster that will prove plenty troublesome to fix. Try bringing back many of the regulations Bush removed, and you get a lawsuit. That suit eventually ends up in the Supreme Court who says you can't change the law (keep in mind this is the same Court that involved itself in the 2K election where it had no jurisdiction). One saving grace here could be that some Justices are getting old giving Obama an opportunity to push the Court to the left. But these lawsuits against changing the regulations will be fought through a Court fraught with Bush appointees. These lawsuits are brought by those well financed FOB's (Friends of Bush). Since the lower courts are packed with right-wing jurists for life it will require similarly well financed friends of the people who are willing to fight the FOB's to a hopefully future friendly Supreme Court.

The bailout isn't working. We put a package together to bail out the banks only to have a small company like Republic Glass close its doors because the bank, Bank of America, who got Federal bailout dollars, won't lend them day-to-day operating funds. As noted in Epoch Times:

Paulson Bailout Fails to Deliver, Except for Big Banks How a program to save the economy ended up enriching a few

So, I ask again...wasn't that $700 Billion Wall Street bailout supposed to get the economy moving again?

1 comment:

Al V said...

Is the fact that the 1st disbursement of money has benefitted the executives of the financial industry? I am not saying you are wrong and that is certainly the perception, but can we document that?

I ask only because I am in the financial industry. My perspective is that the bank balance sheets are/were so bad that the all the TARP did was to keep the beneficiaries from going under. The problems ran deeper than anticipated and thus credit markets have not eased to the point of helping distressed homeowners. There are still significant write downs that will/need to occur coming. They have no idea what the quality of their balance sheets looks like. They can't possibly given the sheer volume of loans (both commercial and individual).

I am not making excuses for them, and am certainly opposed to using my money to fund poor business decisions but I also don't want the economy to worsen without trying to do whatever possible to prevent it. How much worse would we have been without TARP? I don't know.