After rubber-stamping almost everything that the Bush administration dished out over the past eight years, many Republican members of the U.S. House of Representatives decided to act like responsible fiscal conservatives and defeated the $700-billion bailout package.

Many have ostensibly said that the massive government intervention failed to address fundamental market problems and contained too few protections for the American taxpayers.

I suppose it is better late than never, but why have they voted for the Iraq war, the Patriot Act and many other things before?

Could it be that the voter sentiment is such, that some of these guys would never get re-elected in their districts if they voted FOR the bailout plan in its present form?

Probably that’s indeed the case…

The financial bailout of what the Bush administration calls “our financial system” is simply another power grab. The urgency with which the administration officials are pushing this plan, which will probably cost us about $1 trillion reminds us of the urgency and hysteria right after 9/11, when we were told that if we didn’t agree to one thing, or another, the consequences would be catastrophic. The same atmosphere prevailed during the middle-of-the-night voting for the Patriot Act, the creation of the Homeland Security Department and of course the supposedly urgent need to invade Iraq, because it had WMDs, which were an imminent danger to the United States and the rest of the free world.

And guess what? Not one of these “super urgent” moves proved to be necessary in the least. Could it be that the latest bailout plan of the Wall Street and banking millionaires isn’t necessary either, that the administration is simply implementing another step in its long-term strategy of tightening the virtual handcuffs on the previously mainly free American public, and robbing them of absolutely astoundingly large amounts of tax dollars?

Another number that is seldom publicized is the $2.3 trillion, which Americans have spent in 2006 alone on health care. Yes, folks, if you thought that Wall Street and the banks were making a killing, look at the medical industry – far from the best in the world, but most certainly the most expensive anywhere.

To reform that enormous cash cow, including hospitals, physicians, nurses, pharmaceuticals, diagnostic branch of the industry and many others would require a truly Herculean effort. The industry has a huge number of lobbyists and an enormous advertising budget and reforming it will not be easy. In short: Unless Congress has enough gumption and backbone, neither McCain’s, nor Obama’s health reform plan has much of a chance of getting implemented. In fact, don’t be surprised, if any U.S. president will be able to accomplish anything that hasn’t been approved by his corporate masters.

You will hear questions, such as “do you want to have socialized medicine”? Well, about as much as I want to have a socialized Wall Street and banking system, but that one seems to be forced down our throats whether we like it, or not.

The U.S. government has decided to bail out banks and the Wall Street manipulators to the tune of $700 billion. That’s about the amount of the already enormous Pentagon budget. The American middle class will of course be paying most of this tab. Do not expect the already rich to contribute very much to this outrageous move. It will be taken out of all of us. Expect the educational system to decline even further, the health system, which is already the most expensive and one of the worst in the world to further deteriorate and to become even less affordable. You can also fully expect that our transportation infrastructure, including highway bridges and the already sub-standard passenger rail network to be further neglected. At least we can hope that the insane suggestions to privatize Social Security – meaning putting Wall Street as its trustee will not be put forth in the near future.

What we basically have here is socialism applied to the corporations, but not to individual citizens, who do not have viable health care, or a viable transportation system. As a matter of fact, President Bush has said that he would veto a bill providing an additional $10 billion to Amtrak. Funny that he has absolutely no problem in providing $700 billion to Wall Street, or to fund the senseless wars that he has started.

Take a look at our earlier post on this subject

But why are we investing such an enormous sum to bail out banks, who have ended up with bad loans, loans, which were for the most part given out irresponsibly to people, who’s ability to repay them was not even properly checked?

In fact the dissolution of the insolvent parts of the U.S. banking sector – the investment banks, the money-center banks, the regional banks – would actually be a very positive development.

A huge number of these lenders are insolvent. If all of their bad loans, bad derivative bets and off-balance sheet losses were forced to be sent to market and liquidated in order to raise capital, then bank after bank would fold.

And what exactly would be so bad about that? Businesses go under all the time. The truth is these banks will never recover the loans they wrote, so why even try to prop them up with taxpayer funds? To bail out the ultra-rich owners of those banks, of course.

If we are to have socialism – which in fact the supposedly conservative Bush administration, which has in fact killed capitalism on September 19, 2008, is implementing – maybe the U.S. government should buy some companies which are actually profitable, such as Exxon/Mobil, instead of failed and largely useless investment mills?

The Federal Reserve Board of Governors is the part of the Federal Reserve System that is responsible for supervising the private banks. Lets not forget that this is not a strictly federal agency, but one composed of private bankers. And if one of the Fed’s responsibilities is defined as supervision of private banks, how could we expect this fox in the hen house scenario to actually work?

What is really annoying about all of these bailouts is that once the crisis passes, the financial industry goes back to business as usual. Wall Street returns to devising complex, incomprehensible “products” that produce the seeds of the next crisis. Lenders go back to granting credit to borrowers who shouldn’t get the loans. And investors enable these practices by providing the bankers with cash.

In short: If we are to have a free market system – and the version operating in the United States obviously does not work – we should let the banks, the investment houses and assorted financial parasites take care of themselves and if they were badly and irresponsibly managed, let them take a nose dive. In time new corporations will be created in their place, which will hopefully act more responsibly and ethically. For the time being we also should zero-in on the top management of some of these companies and if warranted, prosecute those responsible for this huge mess. Lets take a look as well at the present members of the Federal Reserve and at the performance of its long-time chairman Alan Greenspan, who is so very busy working the lecture circuit, while forcefully “taking the high road”.

There is no doubt that the U.S. and many other economies are facing a downturn. Some blame the huge expenditures for the Iraq war, others the decades of Alan Greenspan’s failed policies.

It appears that at least some of the blame can be laid here, but that cannot be all.

The sub-prime mortgage crisis, and the resultant crash in real estate prices are reminiscent of the S&L crisis of the 1980s and’90s. The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government. Doesn’t that remind you of the bailout of Bear Stearns? At least the feds declined to bail out Lehman Brothers and Merrill Lynch was taken over by the Bank of America. Why is the U.S. government so directly involved in bailing out corporations, which have in fact contributed to the crisis in the first place?

Frankly, seeing the Wall Street crooks -who have been robbing everybody in sight for a very long time – take the deep plunge into nowhere is somewhat satisfying. Unfortunately, their demise – along with too frequent “golden parachute” multi-million dollar payoffs to the top executives – have caused and continue to cause problems, pain and difficulties not only for their rank and file employees, but also to all of those, who have intentionally, or unknowingly gotten involved with these corporations. The latest news is of course the Fed’s $85-billion loan to AIG, the world’s largest insurer – a company of which few people have ever heard about, but which instantly made the news two days ago, when it announced that it was seeking bankruptcy protection.

For the last six, or so years the lending practices and in particular the sub-prime mortgage industry have been running rampant. Some 60 percent of house loans have been given to people, who’s ability to repay the loans was not even properly checked. I remember distinctly that just a few years ago the applicant’s ability to repay was quite thoroughly vetted. No wonder that an insurer, such as AIG was going under, since practically all lenders insure themselves against the possibility of losses in that regard.

This is not to say that the millions of totally irresponsible people, who have taken out loans that they cannot repay are not complicit in this whole mess as well. To make a long story short, the “free market” and the practically unregulated financial industry have not only buried themselves, but also a great many innocent people, along with our economy, which for some strange reason is so dependent on corporations, which deal almost exclusively in buying, selling and repackaging debt in its many forms. Something is definitely wrong with this picture.

Remember Enron, the havoc and expenses it created with the phony California energy crisis? When that criminal enterprise finally collapsed, the damage was mainly restricted to their employees, investors and ordinary people, who were counting on the artificially inflated Enron stock to fund their retirement. Very few Enron executives were ever properly punished.

We seem to have the same situation with the present banking, investment and Wall Street meltdown. It hasn’t happened because of “bad luck”, or some catastrophic event, but it was engineered, caused and executed by a whole slew of white collar financial criminals, with either an active, or at least a passive assistance of the Bush administration. How can you then expect the U.S. Justice Department to go after the crooks, who after all were playing along with the rules set by the feds? In the meantime, you can be very sure that certain – obviously unspecified people – have gotten very, very rich along the way. The really serious problems started with the Commodity Futures Modernization Act of 2000 or CFMA (H.R. 5660 and S.3283), which in fact removed regulations of all kinds of financial crookery (called “products” by the industry) and which has returned the U.S. stock markets to the days before the 1907 Wall Street crash – in reality to legalized betting, which happens to be illegal outside of Wall Street.

Let’s not forget that over the past few decades, the United States has transformed itself from a manufacturing giant, which dwarfed not only particular countries with its output, but which was the biggest, single manufacturing entity in the entire world, to a client state of China, which manufactures practically everything that we buy here, in the U.S.- on credit, of course.

America is being transformed from an industrial colossus to a tired, post-industrial society. A nation of the rich and super-rich at the top, a mass of poor people on the bottom, and a powerless middle class squeezed in between.

The unhealthy emphasis on the stock market, as if it had any real value, rather than in reality being still another virtual tool for corporations to make money, the lack of concrete foundations of our economy, meaning actual, real, tangible assets – all of these factors, with the added “benefit” of wasting hundreds of billions of dollars so far on the senseless war in Iraq, have contributed to our economic downfall.

Having an economy, which seems so heavily dependent on “housing starts”, consumer confidence index, so-called durable goods purchases, the “success” of Christmas shopping and on the whims of the stock market is not only shaky, but downright unhealthy.

Globalization has not produced the benefits that its proponents have so forcefully shoved down our throats, but a whole slew of new problems and even more money for the few, who are “in the know” and who are often so ineptly and callously manipulating the world’s economy.

Transferring millions of federal government retirements from the Civil Service Retirement System (CSRS), to the Federal Employees Retirement System (FERS) was another criminal move. This switch has deprived the federal employees of a viable retirement option, putting their hard-earned money instead into the highly unstable stock market. Why? That’s kind of obvious. The feds have once again subsidized Wall Street to the tune of many trillions, or even quadrillions of dollars, while screwing everybody else. No surprise there, of course. And the Republicans have tried to convince us that Wall Street should be the trustee of our Social Security system. A trustee?! I’d rather trust a venomous snake, I think.

As of Thursday, September 18, 2008 the Feds, along with Congress are preparing another “rescue” package for banks, brokers and other financial moguls. What does it mean to you? Most likely another subsidy to the tune of hundreds of billions of dollars, in addition to all the other subsidies and gifts that the American taxpayers have been forced by the government to pay to save the fat cat’s asses.

But there are other links too, between the war and US economic crisis and decline.

One is the misdirection of much of the nation’s remaining industrial strength into war production. The late industrial engineer Seymour Melman some time ago demonstrated how the military-industrial complex, by producing things not on a competitive but rather a cost-plus basis, destroys economic competitiveness, sucks up research and development talent and resources, and investment capital, and ends up producing nothing of use either for society or for the national trade account.

In addition, everyone seems so preoccupied with the ever-rising price of energy, oil in particular, but as of late also coal, as if that was the only problem we were facing. Oil has of course been always traded in dollars, which partly because of the never-ending lowering of the prime interest rates by the Fed kept dropping in value. No surprise there, of course. Add the roughly 50 percent markup, caused by speculators and the subsidies for the oil companies and all of a sudden, everybody pays for energy through the nose. In addition, I got news for you: for years the Europeans have been paying as much for gas, as we have been paying lately and their economies aren’t collapsing the way ours is. Could it be that the price of oil is not the real culprit, but rather another convenient way of diverting our attention from the actual problems?

Considering all of the above, I would like to once again offer a simplified definition of fascism, which is simply corporate control of the government. Need I say more? Draw your own conclusions and if you love your country, do something about it.

Technorati Tags: bush, control, corporate, Economy, fascism, greenspan, loans, morgrages, problems, solutions, US, US Economic Problems; Are There Solutions?, wall street.banks

First of all, a little clarification as far as how many houses, or apartments (the term “homes” is part of the jargon used by real estate peddlers) John McCain really owns.

The McCains own 10 residential properties, including three beachfront condos in California. The combined value of their properties is estimated at $13.8 million. John McCain wears $520 Salvatore Ferragamo Pregiato Moccasins. He and his wife are major shareholders in Anheuser-Bush and own the third- largest Anheuser distribution company in the world. This American beer has now in fact become a European import for the American beer guzzlers and John McCain did nothing to stop that sale. His campaign uses a corporate jet owned by his family’s beer distributorship. The flights, valued at hundreds of thousands of dollars, have been reported as a violation of the campaign finance standards.

Anyway you slice it there is no doubt that the McCains, largely due to Cindy McCain’s inherited wealth are quite rich. Some estimates actually put Cindy’s worth at about $100 million. I guess that fact must have had an influence on John McCain’s response to a question: “Where do you move from middle class to rich?” The Arizona senator defined being rich as: “If you’re just talking about income, how about five million?” That kind of remarks, combined with former McCain campaign leader Phil Gramm’s statement, who said that Americans worried about the economy have become “a nation of whiners” only show who we are dealing with here.

At the same time the Republican Party machine has been trying to portray Barack Obama as an “elitist”. We wonder how they could possibly justify that label. A single mother, who was forced to rely on food stamps, raised Obama and McCain was raised in a fairly prosperous household. His father was a U.S. Navy admiral and his grandfather, great-grandfather and many more predecessors have served in the U.S. military as far back as the Revolutionary War. McCain’s great-great grandfather William Alexander McCain owned a plantation, along with some 52 slaves and later died during the Civil War as a soldier for the Mississippi cavalry. Except for the slaves and such, I suppose it is a noble family history, one that many would call “proud” and “distinguished” and “elitist”.

Nothing wrong with McCain’s, or his family’s history, or achievements, but why in hell would they feel justified to call Barack Obama an elitist? Would that have to do with Obama’s noticeably higher educational achievements? After all, Obama is a graduate of Columbia University and Harvard Law School, where he served as president of the Harvard Law Review. Obama became the first black to be elected president in the 102-year history of the prestigious student-run law journal. Michelle Obama graduated from Princeton University and Harvard Law School. John McCain graduated from the U.S. Naval Academy not quite at the bottom of his class, but close. Cindy McCain grew up in affluent circumstances. She got a Masters in special education from USC.

We’ll leave it up to our readers to judge, who is the “elitist” here and why, but in our mind the term “elite” has always been a positive, rather than a negative one and if the Republican camp can come up with a truly negative connotation of being elitist, based on someone’s superior educational achievements, let them be. I suppose that it must be either desperation, or their often-proven stupidity. Let’s just hope that they do not convince enough of their either poor, or rich, but usually under-educated voter base to bring about Bush’s 3^rd term in the upcoming November presidential election.