Wall Street

TARP This: Paulson's Bailout Plan Riddled With Deception
How a Program To Save The Economy Ended Up Enriching Big Banks
by Danny Schechter | CommonDreams.org

Talk about crazy making. How do we believe anything Hank Paulson says?

First, he needed $700 Billion, and fast, to buy up troubled assets or the skies would fall and we would be pressed to impose martial law. He found an appropriate acronym, TARP, to manage the money with a skeletal staff of 28 headed up by one of his former protégés at Goldman Sachs.

So Far, So Good,

But then he had himself a rethink, realizing that no one has a clue about how to price troubled assets considered practically worthless. So he had to a make a shift, "in the light of new facts," even though Congress never authorized the shift.

U.S. Economy: The Philosopher's Stone

10 mins.

Great Trauma As a Great Teacher: Peering Into the New Year
By Bernard Weiner, The Crisis Papers

Psychiatrists will attest that it is during emotional depression that great strides can be made in radical alteration of behavior and philosophy. Trauma, in other words, can be a great teacher. Everything is stirred-up, topsy-turvy, and thus can rise to the surface and become manifest and workable. In such a tumultuous time, clinical depression can be, and must be, dealt with creatively.

Isn’t it Finally Time to Enact a Basic Income Guarantee?
by Richard C. Cook | GlobalResearch.ca

The lack of individual and family income security in the midst of a highly-developed economy is a travesty under any circumstances, but the basic contradiction of “poverty in the midst of plenty” that has plagued the world since the start of the Industrial Revolution is becoming much worse in the early years of the 21st century as the Recession of 2008 picks up speed.

Winston Churchill spoke on the subject when giving the Romanes Lecture at Oxford University on June 19, 1930, a few months after the crash of the U.S. stock market that started the Great Depression. He said:

Tomgram: Steve Fraser, Empire of Depression

If you want to catch something of the fears and hopes of Americans right now, go to News.Google.com and try searching for a few words. For instance, put in "FDR" -- the well-known initials of the man who was president four times and took America through the Great Depression and all but the last months of World War II -- and endless screens of references pop up.

For the GOP, the Economic Meltdown May Have Happened Just a Wee Bit Early
By Bernard Weiner, The Crisis Papers

Most likely, we'll never find out what really happened inside the CheneyBush
Administration until after January 20, when ethically-motivated insiders feel
they can spill some beans without violating their oaths of loyalty, but here's
my surmising:

I think key officials inside the Administration knew that the financial
system was swirling inside the economic toilet bowl and would eventuate in a
massive meltdown; after all, there were numerous economists, inside and outside the
government, who more than a year ago were warning about the housing bubble
getting ready to burst, with disastrous impact on the availability of credit.
But, in this scenario, the CheneyBush higher-ups believed that, with luck, denial
and a helluva lot of deficit financing, they could delay the inevitable

By Dave Lindorff

A brief conversation I had earlier this week with a car dealership executive while standing in a post office line demonstrated simply both why the bank deregulation and consolidation process of the past two decades has been a screw job for ordinary people, and why the Washington bailout has been both a taxpayer rip-off and a failure (if it was even intended to work!).

I was chatting with the guy standing behind me who works at one of the 14 dealerships in a Philadelphia-area regional family-owned chain of GM dealerships called Bergey’s. Noting that a number of big dealers like Knopf (a Chrysler Dealer) and McGarrity’s (Ford) had been closing, I asked this Bergey’s manager if the problem was that the banks had frozen lending, making it hard for people to buy new cars.

[Get a second opinion before trying this. It will not be done without consequences that the article below fails to mention. But it is an idea worth considering. --DS]

By Richard C. Cook, Global Research

Now to the Wall Street bailouts, the plan for the government to purchase preferred shares in banks, and the takeovers of Fannie Mae, Freddie Mac, and AIG, may be added the intention announced last night that the government will throw another $20 billion at Citibank, the nation’s largest financial institution.

The announcement came after Citibank’s stock fell 60 percent last week to $3.77 a share. Of course it won’t help the 50,000 people Citibank is laying off, but, what the hey, no plan is perfect.

Blaming 'the Stupids' for the Financial Disaster
Thomas Friedman’s Sermon From the Mount of the NYT Op-Ed Page
by Danny Schechter | Common Dreams.org

“The ones at the top have walked away with vast fortunes, while the humble taxpayer pays to clean up after them."

The Stupids are back. You remember—that fictional family who appear in series of books portrayed as incompetent to the point of confusing the most simple concepts and tasks. The books were themselves denounced as irresponsible and inspired films which were dismissed as stupid plus.

Lurching Toward Gomorrah: More Signs of An Unstoppable Economic Meltdown
by Stephen Lendman

Crisis denialists are still around but are slowly and grudgingly giving way to the reality that global capitalism is in serious crisis as recession lurches toward depression in a continuing downward spiral.

Nearly every new data release confirm it. On November 19, housing starts and permits hit record lows, according to the Commerce Department. At an annual 791,000 rate last month, they were the lowest they've been since number tracking began in 1959 and are down 4.5% from a revised 828,000 September reading.

Building permits were also worrisome at an annual 708,000 rate (down from 805,000 in September), breaking the previous 709,000 March 1975 low figure.

Citizens’ Economic Stimulus Plan: Stop Paying Credit Card Debt
by Richard C. Cook

Now to the Wall Street bailouts, the plan for the government to purchase preferred shares in banks, and the takeovers of Fannie Mae, Freddie Mac, and AIG, may be added the intention announced last night that the government will throw another $20 billion at Citibank, the nation’s largest financial institution.

The announcement came after Citibank’s stock fell 60 percent last week to $3.77 a share. Of course it won’t help the 50,000 people Citibank is laying off, but, what the hey, no plan is perfect.

Government bailout hits $8.5 trillion
By Kathleen Pender | SFGate.com

Graphic: Table of Bailout Funds Committed and Expended So Far

The federal government committed an additional $800 billion to two new loan programs on Tuesday, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion, according to Bloomberg News.

That sum represents almost 60 percent of the nation's estimated gross domestic product.

The Real Cost of the "Bailout": Are We Getting Our Money's Worth?
By Kevin Zeese | OpEdNews.com

$7.76 Trillion.

That is what Bloomberg reports has been committed on behalf of the American taxpayer to bailout America’s finance system. This includes spending by the Treasury, Federal Reserve and FDIC.

• The amount is equal to half the value of everything produced in the United States last year.
• It is $24,000 for every man, woman and child in America, that is nearly $100,000 for a family of four.
• It's nine times what the U.S. has spent so far on wars in Iraq and Afghanistan.
• It is enough money to pay off more than half the country's mortgages, but bankruptcies have continued despite the bailout.

We're now at about $8.4 trillion. Of that amount, Congress approved $0.7 trillion and required minimal oversight which it did not get. Meanwhile everybody's chattering about the car makers' request for $0.025 trillion. Who the hell cares about that at this point? What we should be doing is researching what the next word is after a million and a billion and a trillion ... What comes next? And what's the one after that? Then we could start calculating the interest so we properly inform our grandchildren in our suicide notes.

UPDATE: We're not guaranteed to be at $9 trillion tomorrow, but we were at $7 trillion yesterday and $4 trillion a few days before that. Get it?

By Dave Lindorff

I was listening to Robert Reich, once the left end of the spectrum in the Clinton cabinet, talking with CNN’s Wolf Blitzer a few days ago, and Reich, who has in the past sometimes made sense, was talking about how Americans’ incomes had fallen over the last eight years of the Bush/Cheney administration and that it was necessary to get their incomes back on an upward trend, so that they could “start shopping again.”

Now I understand Reich was trying to make the case that the bailout so far has been focused on the banks and the insurance industry, and that none of this will help unless ordinary people start getting some relief, but still, there’s something completely twisted and out of whack when the best we can come up with is that we need to get Americans back into the malls.

In fact, that is a good part of what’s wrong with the US economy: Fully 75 percent of GDP in America is consumer spending.

According to the Wall Street Journal: "The White House wants Congress to rewrite a $25 billion fund for retooling plants to make more energy-efficient vehicles to allow the auto makers to tap it for bailout money—if they can show long-term viability. The auto makers and some of their Democratic supporters prefer a quick infusion of emergency cash from the $700 billion financial-rescue fund that troubled Citigroup was allowed to use."

[COULDN'T THEY HAVE GIVEN ABOUT $20,000 TO EVERY MAN WOMAN AND CHILD INSTEAD? -DS]

By Mark Pittman and Bob Ivry, Bloomberg

Nov. 24 (Bloomberg) -- The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program
By Russ Dallen | Latin American Herald

General Motors (GM) plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

By Dave Lindorff

The ongoing and deepening global economic crisis, to which Barack Obama owes his presidential election victory, is no small thing, to be sure. It also presents us on the left with a lot of openings to press for progressive change.

The G20 Economic Summit Won’t Change This Dirty Diaper
Remarks by Richard C. Cook | George Mason University, Fairfax, Virginia | November 15, 2008

The G20 is meeting today in Washington, D.C., to discuss the world financial crisis, its causes, and what can be done about it. But this won’t help the people of the U.S. who have been victimized by their own financial system.

The stated objectives are to find ways to stabilize and reduce speculation in the financial markets and make financial transactions more transparent, more efficient, and more international in scope. But this is also a revolt by the nations of the world against over-reliance on the U.S. dollar as the world’s reserve currency. What we are likely to see over time is a multi-currency regime that includes the Euro and one or more Asian currencies as well.