Capitol Hill Blue Forums Political Issues Finance, the economy & Economics The Economy Problem - an opinion

We have neither the time nor the stomach to look closely at this program. But we don’t have to; even from a distance, it stinks.

Why? Because there’s not that much ‘win’ to share out. The assets are worth what they’re worth. By all accounts, they’re worth a lot less than the banks thought they were worth originally. In a better world, the bankers would take their losses, admit their mistakes, and blow their brains out...or at least change careers. In fact, we have a suggestion: they should go into government; there they can make as many mistakes as they like and no one will notice.

But this is not a better world; it’s a world that is full of sin and sorrow...one with a fool on every corner...and an ace up every sleeve.

There won’t be three winners from Mr. Geithner’s plan. There will only be one. Whatever the toxic assets are worth, they will be sold for either more or less than that amount. If they are sold for less, investors will realize a profit. The banks – and their government backers – will lose because they will have given up an asset for less than it was really worth. On the other hand, if the toxic assets are sold for more than they are worth, it is investors who will lose.

Investors’ objective is clear: they want to make money. And they won’t invest unless they think they’re getting the assets for less than they are worth. Bankers’ and the government’s motivations are more complex. Mostly, they just want the problem to go away. So, we’ll put our money on the buyers of the toxic assets, not the sellers. Most likely, they will be the only winners. They will buy the more palatable pieces of meat at good prices; they’ll leave the most toxic pieces for the government. Most likely, the government will be an even bigger loser than it is now.

But the government will lose twice. First, it will lose money in the poker game with private investors. Then, it will lose again when its expensive flimflam fails to restart the economy.

The banks will be better off once they’ve cleaned out their cupboard. No doubt about it. They will be ready to lend again, right? But to whom?

"If a company is 'too big to fail', then it is too big to exist"

Reality has kept me awake most nights for a month.

Despite the apparent confusion of the Press and the Politicians, there is an extremely simple explanation for the mess that was created in the world economy, AND the reason why what our country is doing will not solve the problem.

It was knowingly caused by bankers and brokers, abetted by the Congress.

The solution was to allow the banks and brokerages to declare bankruptcy, and for the investors to lose their investments... across the board.

That was what the law required.

Instead, the political machine, owned by the Banks, Brokers and Big Corporations defied the law, and put the burden of bad debt on the 99% of the population that had no say in the decisions. There is no law that requires a Bail out, but there ARE laws that were designed to protect the public from Government Corruption.

Our Government... broke the written law,... indemnified the people who bribed them to save their (elite) fortunes,... and now twists in the wind, trying to divert the blame.

As of today, instead of nationalizing the banks to protect the public from further damage, your Government went the final step of simply buying the bad debt.

As of last year, 1% of the people owned 50% of the wealth of the United States. I expect that within five years, that same 1% will own as much as 65 to 70% of that wealth.

It's as simple as that. The rest is smoke and mirrors, and no matter whether the people use pitchforks or teabags, this isn't going to change.

The thought that somehow, bankers and government experts are so wise that they are the only ones who can fix the problems... is an illusion.

bankers and government experts are so powerful that they are the only ones in a position to address the problems

The thought that somehow, bankers and government experts are so wise that they are the only ones who can fix the problems... is an illusion.

"The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too," was published in 2008. It details the peak of a "predatory" governing system under President George W. Bush, which, despite its rhetoric, had long ago abandoned the "free market" principles and began to feed off of the institutions of the state.

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...bank regulation expert William K. Black did not hedge in describing the Wall Street collapse as a result of massive fraud starting in the board rooms and CEO offices of Wall Street .... Has the American economy fallen victim to a group of confidence men?

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Broadly, tackle this problem from the bottom up, not the top down. The most important thing is to improve the security of the population....

First would be enhancing Social Security. Second would be to enact a holiday on the payroll tax, and third would be to reduce the Medicare eligibility age to 55. I think if you get those things, you will greatly help American households get through this recession and greatly help the elderly population survive the collapse of their stock portfolios and home values....

In terms of health care, it could save money because you'd have a significant sector of the population moved over into an insurance system, which is substantially cheaper to run than the insurance system they are now in, or in many cases not in.