9/25/08

This Bailout Is A TRAP

If you can stand it, watch the video of Bush delivering his little pep talk to the nation last night. When he delivers his vicious lies, cleverly honed though they may be by his writers, the truth flickers across his face. You can see it in his eye area and around his mouth, the ripples of astonishment, the fleeting smirks, the lips pursed in disgust, the arched brow as he delivers what he absolutely, positively knows are LIES to the American people. The expressions go by very quickly, in fractions of seconds, but they are there. I'm sure somewhere our government has this super technology that they use in airports to analyze our faces for terrorist intent, and if they have that trained on GWB they must be laughing their asses off right now, as he leads the charge to rape our country one more time for the road. It's as if he almost can't believe we're going to fall for it again, but he'll give it the old college try. Rah rah.

This bailout plan is a trap, of that I am convinced. Bush and Paulson keep talking about what will happen if we don't do it, but nobody talks about what will happen if we do do it. They don't want you to know about that. They don't want you to know what this bailout will do to the economy.
What it can do is provide a one-time transfer of wealth to insiders who already have been playing the debt-credit system and siphoning off its predatory financial proceeds to themselves. The Wall Street bankers, brokers and fund managers to whom I’ve been speaking for many decades all know this. That is why they pay themselves such large annual bonuses and large salaries each year. The idea is to take as much as you can. As the saying goes: “You only have to make a fortune once in a lifetime.” They have been salting away their fortunes year after year, mainly in hard assets: real estate (free of mortgages), fine furniture, boats and trophy art.

Their plan now is for icing on the cake – to take Mr. Paulson’s $700 billion and run. It’s not a “bailout of the financial system.” It’s as giveaway – to insiders, to sell out all their bad bets. Companies across the board will get rid of their bad mortgages, and also their bad car loans, furniture time payments, credit-card loans, student loans – all the debts that any competent actuary could have told them never could have been paid in the first place.

...Promises that “taxpayers” will be able to recover a large part of this money are a fiction. If there were a hope of recovering this money, then investors abroad – foreign buyout funds, foreign banks, foreign sovereign wealth funds – would have been willing to buy Bear Stearns, Lehman Brothers, A.I.G. and other companies at some price. But they wouldn’t touch this at any price.

...For the government to even begin to recover some of the value of the $700 billion in junk mortgages it has bought would force new homebuyers to pay even more of their income to the banks. And if they do that, they will have less income to spend on goods and services. The domestic market will shrink, and tax revenues will fall at the state, local and federal levels. The debt overhead will deflate the economy, causing shrinkage all down the line.

So here’s where the cognitive dissonance comes in: It is necessary, even inevitable, for the volume of debt to come down – not up – to restore equilibrium. The economy was well on its way to preparing the ground for this last week. As Alan Meltzer of the American Enterprise Institute (of all places!) explained on McNeill-Lehrer, Merrill Lynch was able to be sold at 22 cents on the dollar; and the economy survived Lehman Brothers and Bear Stearns being wiped out.

Such debt writes-offs are a precondition for writing down America’s mortgage debts to levels that are affordable. But Mr. Paulson’s plan is to fight against this tide. He wants the Wall Street to keep on raking in money at the expense of the economy at large. These are the big banks who lobbied Congress to appoint de-regulators, the banks whose officers paid themselves enormous bonuses and gave themselves enormous golden parachutes. They were the leaders in the great disinformation campaign about the magic of compound interest. And now they are to get their payoff.

The pretense is that not to pay them off would threaten “the economy.” The reality is that it only would stop their predatory behavior. Worse than that, for the economy at large a government take-over of these bad loans would prevent the debt write-down that the economy needs!

It gets worse. If Congress should be so destructive as to buy out $700 billion of bad loans (for starters), the sellers will do just what Russia’s kleptocrats did. They will take their money and move it abroad to a “hard” currency country. This will help collapse the dollar. Up will go gasoline costs and prices for other imports. America will be turned into a Russian-style post-Soviet economy, having endowed a new domestic kleptocracy of insiders, who use some of their gains to finance the campaigns of American Yeltsins such as McCain.
Do not believe these people. They lie ALL THE TIME. They don't care about Americans. They only care about themselves. They set this up, knowing it would come to this, and now they will force us at gunpoint to bail them out, lying the whole time that we will be made whole. We never will. Our dollar will collapse, chaos will break out, and then they will clamp down with Martial Law and begin the oppression in earnest. It's no coincidence that the Army will install an active duty unit on October 1st, within the US, to handle 'civil unrest' and 'crowd control,' using the latest 'non-lethal' weapons. That would be in 6 days.

Keep calling your congresspeople. Here you can see one, DeFazio D-Oregon, actually show some courage as he speaks the Truth on the House floor. We need more of this, much more. We need many more people to have courage and to stand against this plan. There should be NO bailout. As DeFazio says, let them write off the bad debt first. If they need help after that, let them take a loan under stiff terms. Is that not what would be expected of any one of us? Of course it is. Good enough then, for them who already have so much.

A wolf never can so badly enslave a fellow-wolf as a man can enslave a fellow-man. It is not easier to live in freedom than to fight for freedom. One must fight for freedom like an archangel, but one must live in freedom as a saint. When you fight for freedom you are helping every slave of the world, not only yourself. - Nicholai Velimirovic, Wisdom of the Serbians

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