Enjoy Your Capitalism?

[Guest three3]

The Big Takeover

The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution

 

MATT TAIBBI

Rolling Stone

Posted Mar 19, 2009 12:49 PM

 

It's over — we're officially, royally !@#$ed. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

 

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

 

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of sh------- luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."

(more at link)

[KD in CA]

Gee, remember the good old days when we hated oil companies for actually earning money?

[stuckincincy]

Gee, remember the good old days when we hated oil companies for actually earning money?

 

The worst is yet to come.

 

Obama budget could bring $9.3 trillion in deficits:

 

http://news.yahoo.com/s/ap/20090320/ap_on_...wh/obama_budget

 

I feel bad for the 30 and under crowd. Or in the current vernacular, sux2b30.

 

[EndZoneCrew]

The worst is yet to come.

 

Obama budget could bring $9.3 trillion in deficits:

 

http://news.yahoo.com/s/ap/20090320/ap_on_...wh/obama_budget

 

I feel bad for the 30 and under crowd. Or in the current vernacular, sux2b30.

 

 

Thanks...I just turned 30

[Guest three3]

i told you so.

 

 

sincerely yours,

 

karl marx

[tennesseeboy]

What is wrong with the bankruptcy courts? I'm a frigging liberal but even I can't understand why we didn't deal with these companies in the context of bankruptcy with special masters and perhaps special legislation and the creation of a new Resolution Trust kind of situation to deal with housing issues. Seems like we are following the Bush strategy of to paraphrase Henry Paulsen..give them money and ask no questions.

[ACor58]

The worst is yet to come.

 

Obama budget could bring $9.3 trillion in deficits:

 

http://news.yahoo.com/s/ap/20090320/ap_on_...wh/obama_budget

 

I feel bad for the 30 and under crowd. Or in the current vernacular, sux2b30.

 

 

He is being exposed as an empty suit that is only as smart as his teleprompter. This is the Republicans fault. All they had to do was nominate someomone under the age of 70 with a VP nominee that had a brain and did not read the bible verbatim and we wouldn't have to worry about Barry Marx. WE ARE SO SCREWED!

[HelloNewman]

I find it interesting that people who spend the most time complaining and whining about the current economic recession have little if nothing to offer in terms of a solution...just complaints and whining about "socialism".

 

The President is at least TRYING to do something about the mess that was left to him from the previous administration. Even if it works or not he is TRYING and if anyone else in this country have a better idea to stop the bleeding then speak up...otherwise be quiet.

 

By the way...this "socialism" garbage is not going to happen.....the government is trying to stop a potential depression by stepping in and helping as best it can even though mistakes were made. Corporate greed on Wall Street is to blame.......

[KD in CA]

i told you so.

 

 

sincerely yours,

 

karl marx

 

 

So did I.

 

Sincerely,

 

Dr. Seuss

[Guest three3]

So did I.

 

Sincerely,

 

Dr. Seuss

 

the baby in your avatar will be a socialist

[BB27]

I find it interesting that people who spend the most time complaining and whining about the current economic recession have little if nothing to offer in terms of a solution...just complaints and whining about "socialism".

 

The President is at least TRYING to do something about the mess that was left to him from the previous administration. Even if it works or not he is TRYING and if anyone else in this country have a better idea to stop the bleeding then speak up...otherwise be quiet.

 

By the way...this "socialism" garbage is not going to happen.....the government is trying to stop a potential depression by stepping in and helping as best it can even though mistakes were made. Corporate greed on Wall Street is to blame.......

 

Our economic problems come from way before the previous administration. Blaming GWB for everything is a cop out. The greed of politicians who take money from these failing companies and then use my tax money to prop them up is just plain criminal.

 

Why is everyone so pissed at Madoff for stealing 50 billion when our government is stealing trillions from us.

[ACor58]

I find it interesting that people who spend the most time complaining and whining about the current economic recession have little if nothing to offer in terms of a solution...just complaints and whining about "socialism".

 

The President is at least TRYING to do something about the mess that was left to him from the previous administration. Even if it works or not he is TRYING and if anyone else in this country have a better idea to stop the bleeding then speak up...otherwise be quiet.

 

By the way...this "socialism" garbage is not going to happen.....the government is trying to stop a potential depression by stepping in and helping as best it can even though mistakes were made. Corporate greed on Wall Street is to blame.......

 

The idea is simple - Fix the banks and fix the problems - that is all that needs to be done. The only thing right in his budget proposal is the money for infastructure because it creates jobs AND commerce. And he has not dedicated nearly enough.

 

Please tell me how a down payment on universal healthcare is going to prevent a depression? The only place that our education system is lacking is in the inner city - and throwing more money at them to waste is not going to prevent a depression.

[KD in CA]

the baby in your avatar will be a socialist

 

Only if she's in the ruling class. Funny how many people still cling to laughable Karl Marx fantasies of socialist utopias.

[ACor58]

Our economic problems come from way before the previous administration. Blaming GWB for everything is a cop out. The greed of politicians who take money from these failing companies and then use my tax money to prop them up is just plain criminal.

 

Why is everyone so pissed at Madoff for stealing 50 billion when our government is stealing trillions from us.

 

It starts with Clinton and that stupid son of a bithc Barney Frank. Fannie and Freddie are the ones that started this whole thing. Leave it to the DUMB people of Mass. to keep re-electing that slob.

[Guest three3]

Only if she's in the ruling class. Funny how many people still cling to laughable Karl Marx fantasies of socialist utopias.

 

funny how people cling to fantasies like the trickle down theory and laissez-faire economics

[stuckincincy]

I find it interesting that people who spend the most time complaining and whining about the current economic recession have little if nothing to offer in terms of a solution...just complaints and whining about "socialism".

 

The President is at least TRYING to do something about the mess that was left to him from the previous administration. Even if it works or not he is TRYING and if anyone else in this country have a better idea to stop the bleeding then speak up...otherwise be quiet.

 

By the way...this "socialism" garbage is not going to happen.....the government is trying to stop a potential depression by stepping in and helping as best it can even though mistakes were made. Corporate greed on Wall Street is to blame.......

 

If you are implying that Bush acted like a Democrat domestically - I agree.

 

But understand that the mess is because of the action of Congress, and the Republicans that turned and went in lock step with the Democrats. The Republican party is destroyed - welcome to one-party rule.

 

Both stripes rolled in the corporate greed, as you say. Pay not attention to the fact that corporations employ huge numbers, provides huge amounts of charitable money, and pay onerous taxes - passed along to you, by the way. Wait and see how Obama's pay-off to the unions - destruction of the secret ballot ,and trade restrictions play out. Hope you keep your job.

 

And socialism is around the corner. The Democrats, for the last decades, have made great effort to "get out the vote". They ensured that however stupid, however much a propagandized education forced on them, they would get that rah-rah feeling and flood the polls.

 

Most of these people have no idea of how our government works. Many can't name more than 2 oceans, let alone the names of other countries. Ever watch Leno's "Jay Walking"? Every day - more restrictions on behavior. Some of it necessary, thanks to the "It's All About Me" pervasive mentality.

 

Your kid is going to face hideous taxation and likely the repudiation of the Constitution.

[KD in CA]

funny how people cling to fantasies like the trickle down theory and laissez-faire economics

 

Let go of your bitterness and feel free to move to a socialist country so you can take advantage of all the opportunites you'll have there. Or at least you'll be able to feel better about yourself since no one else will be able to better themselves either.

[Guest three3]

better myself? college is free in socialist nations and i would be guaranteed shelter, food, a living wage. americans can't say this. try selling crapitalism on the generation of americans in their teens and 20s. tough sell

[Magox]

I find it interesting that people who spend the most time complaining and whining about the current economic recession have little if nothing to offer in terms of a solution...just complaints and whining about "socialism".

 

The President is at least TRYING to do something about the mess that was left to him from the previous administration. Even if it works or not he is TRYING and if anyone else in this country have a better idea to stop the bleeding then speak up...otherwise be quiet.

 

By the way...this "socialism" garbage is not going to happen.....the government is trying to stop a potential depression by stepping in and helping as best it can even though mistakes were made. Corporate greed on Wall Street is to blame.......

It's not whining. Its expressing concern. I admire the man for acting, but I am terrified of his actions.

 

You say that corporate greed on Wall Steet is to blame? You are partially right. If you are going to blame anyone you have to go to the source of the whole problem. You can thank Alan Greenspan and Bill clinton for the repeal of the Glass-Steagal act.

 

This legislation was signed into law by President Bill Clinton on November 12, 1999. After being heavily sought after from Alan Greenspan.

 

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s, coincidentaly the time that Alan Greenspan took over as Fed Chief.

 

This basically paved the path for all these OTC non regulated derivatives. Wall street just exasperated the problem further.

 

You have to understand what the government is doing. I know that they are trying to provide liquidity to the system, but at the same time we are falling further and further into debt. Did you know that the plan that Geithner has, allows Wall street risktakers, to partake in another game of profits? Did you know that the American tax payer is financing over %85 of these hedgefunds that want to participate, and not only do we finance their risktaking, but the FDIC is going to assume %90 of the risk. How is that a good deal to the U.S taxpayer?

 

Let me say that again, we are going to finance over %85 of these toxic assets, distressed debt, mortgage backed securities that are tremendously devalued, and then we are going to assume %90 of the risk.

 

Of course Wall street and the banks love this. They basically have little risk and tremendous upside.

 

Sure it provides more liquidity to the markets, but it still doesn't address the underlying problem, and that is lending. Banks will not lend freely in this environment. Jobs are declining, home values are deteriorating, the consumer is scaling back, all while the banks are hemorrhaging money. We are adopting the "zombie bank" policies of Japan of the 90's. Ya, that worked really well for them didn't it?

 

I will admit that it improves the odds of success, but the risk that we are taking in my view are much much greater than what we should ever take on.

 

Basically in essence the U.S has now become a super Hedge fund manager. The only difference is, that clients usually have a choice and do their research whether or not they want to do business with a hedge fund. Except, us the taxpayer are now involuntary investors. We have no choice.

 

On top of it all the federal reserve committed and is going to print over $1.1 trillion dollars to provide liquidity to the markets, by buying our own U.S Debt.

 

are you kidding me? No wonder the Chinese are pissed as hell. Two weeks ago their their prime minister said that they were "worried" about their $1 Trillion dollar investment that they have with us. No sh*t !

If they were worried two weeks ago, they must have loved the decision we made to print over $1 trillion dollars, which is the single biggest act the U.S Federal reserve has made since the 1985 plaza accord, allowing the dollar to make it's second biggest fall on record.

 

Did you know that the chinese leaders are looking to press at the Group of 20 summit for specific steps to protect its more than $1 trillion of dollar assets as our U.S. fiscal policies risk sparking a possibly and likely “currency war” ?

 

did you know that their central bank Governor Zhou Xiaochuan urged the International Monetary Fund to work on creating a “super-sovereign reserve currency” that would be stable and independent of individual nations? This is according to the central bank’s Web site yesterday.

 

They want to form a new global currency. This is a reflection of what they believe will happen to the dollar.

 

You ask, do you have any solutions. Yes their are solutions.

 

Here is what we should do:

 

1) Perform the stress tests that they are all ready implementing on all U.S banks.

2) Banks that do not pass the stress test, take them into "temporary receivership"

3) Break off all the healthy assets these banks and institutions have and sell them off to healthier, stronger regional banks that exercised good risk management. (reward the good banks)

4) Pool all the toxic debt, form a free market for participants to enter.

5) Give tax breaks and incentives for market participants.

6) Give assurances that their won't be negative taxation policies for participants.

7) Allow low financing for these "legacy" assets, but not at the extent that they are now currently offering. (which means less risk for the US taxpayer)

8) Limit the risk to the market participants, but no where near to the extent that they are offering now. (again, less risk for the the US taxpayer)

 

These are some of the solutions that I have compiled from some people that I consider to have a better gauge of what is going on like Nouriel Roubini or Paul Krugman.

 

I have serious doubts of the actions that are taking place right now. Everyone better exchange their dollars for something tangible, because soon enough, paper will be worth very little.

[KD in CA]

better myself? college is free in socialist nations and i would be guaranteed shelter, food, a living wage. americans can't say this. try selling crapitalism on the generation of americans in their teens and 20s. tough sell

 

So your problem is that other people aren't paying for your whole life? How pathetic. And yet predictable that the concept of working hard to get ahead never entered your mind when I suggested you better yourself. Guess you missed the yourself part of that phrase, huh?

 

No, Americans can only say that their system built the most dynamic and successful economic system in history that has resulted in the highest standard of living ever seen on the planet. Even with a downturn in the markets.

 

And if you are really dumb enough to believe that there are no poor people in socialist countries, maybe it's time to go see a bit of the world for yourself junior. Oh wait...no one will pay for you to travel the world. Damn capitalists!