"News that's not known, or not known enough."
Helen & Harry Highwater's cranky weblog of news and opinion.
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"News that's not known, or not known enough." Helen & Harry Highwater's cranky weblog of news and opinion. |
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The Bush-Paulson plan
Now that Bush has added his stamp of approval to the Paulson Plan, it is reasonable to suppose that the plan is going to fail catastrophically. Bush set to announce help on mortgages And in fact, Max Fraad Wolff lays out that case very well. Mr. Wolff (a doctoral candidate) points out that recent defaults are not primarily a sub-prime phenomenon:
Mr. Wolff makes a number of other excellent points and I recommend the article highly. The bottom line now? Another catastrophic "failure" which is almost identical to Enron, complete with off-balance sheet shenanigans, massive fraud, mis-regulation, and rip-offs of the citizenry. Furthermore, the real bailout is underway and has nothing to do with the "Bush-Paulson" plan. #1 interest rates are being pushed below the actual inflation rate -- on track to 2% fed funds by December 2009; and #2 massive transfer of bad debt from private industry to the Fed and Treasury. And don't expect anyone at CFC or Citi or Merrill Lynch, et al, to be heading to prison; they get away clean this time, once again. The problem that must be solved is that prices are unaffordable in relation to income. That can only be fixed with massive monetary inflation, dollar devaluation, reduced real estate prices, federal monetization of bad debts, and time. Everything but the kitchen sink will be thrown at the problem And by the way, during the next few years as the Democrats attempt to reduce wasteful spending and increase tax revenues, you will probably hear well-meaning people talk about how they don't like these "income redistribution schemes". The fact is that income is being redistributed, and this is the American Way, from the poor to the rich by the Federal Reserve and its money printing presses. Inflation is a tax that mainly affects low income people because a) the wealthy own hard assets that inflate nicely; b) the wealthy don't spend as much of their income on necessities; and c) wages tend to lag inflation, especially at lower income levels. Soooo.... attempting to stop the insane growth of national indebtedness is a good thing and must be done. (Preface: many NYT articles are 'locked' behind a sign-in page but if you put the article title into google.com and search for it you may find that it has been published elsewhere as a "free range" story...like this one which we find at IHT): Wary of risk, Wall Street bankers sold shaky mortgage debt
If you recall, Hank Paulson was CEO of Goldman Sachs until May 30, 2006, when he was invited to join the Bush Regime as Treasury Secretary. Today's revelation of the "Bush-Paulson Plan" to save troubled "sub-prime" borrowers from default may be labeled a heroic act by well-known mortgage security "fireman/arsonist", Hank Paulson... The Enron story was identical in most key respects. Virtually every big bank and brokerage was involved in the secret offshore scheme of Enron and were key enablers of the schemes. This year a court ruled that the geniuses who invented the rip-offs who worked for the banks/brokerages cannot be held responsible for how Enron used the schemes, and the Supreme Court /may/ take up the question: UC appeals Enron bank case to Supreme Court
Virtually all of the same corporations that were knee deep in the Enron swamp are even deeper in the subprime mortgage debacle. Most ended up paying token settlements and of course, the Bush Regime did not prosecute its friends vigorously. So here we are again, but 10 times bigger. It may be a truism, but the truth is that the majority of property crime, in terms of total losses, originates on Wall Street and is aided and abetted in Washington D.C. Yet few of the criminals are ever sent to prison in spite of their manifest, proven, indisputable, fully revealed guilt. Every 5, 10 or 20 years Wall Street invents a new swindle and steals a few billion or trillion dollars, and they get away clean every time. (The real outrage is when they lobby Congress so that they can pay lower taxes on their ill-gotten gains than people who make money the old-fashioned way, by working for a living.) But instead of punishing these people who are repeat offenders stealing from widows, orphans and everyone within 10,000 miles of them, the U.S. is happy to send minor substance abusers to hard time in prison. 25% of black people go to real (hard) prison but only about 0.000001% of Wall Street criminals go to "Club Fed", and then for 24 or 36 months at most...
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