Lehman Brothers survived the Panic of 1857, The Civil War, the Panics of 1873, 1893, 1907, and the Great Depression. But it couldn't survive the Bush presidency.
— Robert Hammer, Pittsboro, NC
Oh the horror!
Saudi Arabia Warned Germany 3 Times About Threat Posed by Magdeburg
Attacker - Reports
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MOSCOW (Sputnik) - Saudi Arabian authorities had warned Germany three times
regarding the danger posed by the individual suspected of ramming visitors
at a...
54 minutes ago
7 comments:
Thanks Coldie for the link to the article in The Nation posted in other places. Any American citizen who believes the government bails out a company for the "little guy" is only fooling themselves.
Government aid (er, I mean bailout) to firms, be it airplane or financial is done for the upper. upper, upper class. The Bush family cares only about the oligarchy of which they are part.
"leftisthebest"
There're some killer essays about this matter over at Counterpunch today as well. This bullshit cannot be allowed to transpire or there will be one of two outcomes that result: revolution or a long slow slide into feudalism.
Go McCain!! WooHoo! Obama is a newbie.
Courtesy of ATR
“Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation”
-John McCain
Yeah, I’d say the man’s qualified.
Hi Coldie -
Back in my civilian life I worked at a south side bank.
Back in the early 90's the bank was all a rage about "redlining".
Thanks to Liberal Democrats, the banking industry in this country was forced to provide loans to those "underserved" communities (ie. ghetto area). Thanks to Dhimmy Carter, the Community Reinvestment Act made sure that banks were compelled to provide bad loans.
I hate to play Party on this one but fault lies plainly in the court of the Democrats. Chris Dodd, Charlie Rangel, Jaime Gurelik (sp?), Chuck Shumer and Reins - all made tens of millions of dollars while cooking the books over at Freddie Mac/ginnie mae. Clinton advanced the problem by putting his corrupt cronies in there.
If Bush had a hand in this I would gladly pile on but no Republican benefited directly from this financial morass we're now in.
The worst part of it is that now we're liable for upto $1 trillion of additional debt. Mind you, our GDP is currently about $17 trillion.
Contrary to what the media is running with, "capitalism", "greed" and "over-regulation" are not to blame for this. This is a direct result of over-regulation.
Our retarded politicians won't fix Social Security, Medicare, or Medicaid because they just won't face the issues at hand.
As Reagan said, "Government is not the answer to problems, Government is the problem." The politicians are asking to take our prosperity and our liberty.
Rue, this is a bipartisan affair in every sense of the word I agree, Clinton did as much if not more damage than anyone by repealing Glass-Stegall. Having said that, however, I don't think you give your party nearly enough credit. Recall that Reagan appointee Fed Chairman Alan Greenspan pumped so many economic bubbles he's known among left economists as the Wizard of Bubble-Land.
Greenspan's innovation was to reduce interest rates radically in order to increase liquidity (i.e credit). This had the effect of increasing the spending potential of consumers who now had a seemingly endless supply of "money" with which to purchase homes, cars, plasma T/Vs, etc. This was necessitated by the fact that the real wages (adjusted for inflation) of American workers had been stagnating or declining since 1973. This was largely the result of the off-shoring of American manufacturing jobs to places where slave wages were encouraged. The second reason wages declined was due to the systematic destruction of the labor movement in the US--also a bipartisan affair since both parties sided with Big Business in all matters of conflict.
This created a few problems. How does a consumer economy survive if workers are not earning wages sufficient for them to shop and spend? How do you encourage them to spend instead of save? Well, you offer them easy access to credit and the magic of compound interest will assure the lenders a shitload of steady profits.
The US is no longer a leading industrial nation as only 9% of its GDP is the result of manufacturing.
The bulk of Americans now work in the service industry, in fact this is one of the only areas in which the US job market shows any net growth. The sector of the American economy which has been the most profitable by far (for a sliver of the population) has been the Finance, Insurance, Real Estate industries or FIRE for short. This sector creates nothing of tangible value in the sense that workers produce a product that has utility in the real world for most people. FIRE is not a part of the "real economy" but one in which theoretical wealth (credit) is created from which interest and other service fees are then derived in stupendous quantities (21% of GDP).
BUBBLE LAND
Greenspan in his role as Fed Chairman was instrumental in the creation and implosion of the Dot-Com bubble of 1999-2001, as well as the current housing bubble that threatens to destroy the nation. He did this by pumping credit into the system which then encouraged Wall Street to pursue strategies that artificially inflated the value of assets, be they dot-com startups or McMansions. The housing bubble, by far the deadliest, was began by the Wizard roughly in 1996 but rapidly accelerated in 2002 as the Dot-Com bubble burst.
For a century housing values rose in rough accord with inflation, a steady 2% to 3% per year. By 1996, however, this ratio began to change and by 2002-03, radically so. Housing values in several markets were priced at 70% above were the fundamentals (i.e fuel, labor & construction costs as well availability of materials) suggested where they should have been. This was a classic case of irrational asset inflation (bubble) and Greenspan abdicated his responsibility by not using the tools at his disposal (raise interest rates, warn Congress) to cool an obviously over-heated economy.
Rue, the central flaw in the US economic model is that it was wholly dependent on a mathematical and therefore logical impossibility: the construction and purchase of housing and, critically, their unprecedented valuations would be eternal and thus could sustain the US economy. So much money was being made and the FIRE sector became so powerful and influential that Congress was transformed into its virtual adjunct. Every significant FDR era regulation on the financial industry that had been enacted to rein in the excesses that led to the market crash of 1929 were repealed or gutted under neoliberal "free market" pretensions.
The free-market fundamentalists whose bankrupt (literally) ideology has held the the commanding heights for the past 35 years demanded less government oversight or "interference" in the market because the marketplace itself would correct excesses. LESS regulation not more was their mantra. Well Rue, I've got news for you. There never has been a really existing free market for there has always been some form of state intervention to "finesse" the rough patches for the business elite when they needed the "invisible hand" to make itself visible--preferably with a bailout in its palm.
WHAT HAPPENED?
Every economic bubble in history has deflated. Only dreamers believed that this one would be any different. The housing bubble was fueled further by Wall Street "innovations" that encouraged the (so-called) securitization of sub-prime debt. There's a secret to sub-prime mortgages that you must have overlooked during your time in the banking industry Rue--they are stupendously profitable thanks to their outrageous rates and fees. The higher the risk, the greater the profit. Banks hardly needed encouragement from the government to sell mortgages to those who could not afford them. Especially in the era of "securitization".
These sub-prime mortgages were sold to the big Wall Street investment banks who then squeezed slices of these sub-prime loans into financial sausages they called Collateralized Debt Obligations (CDO) which were sold in the derivative market to gullible foreign central banks, hedge funds, pension funds, and other major investors around the world. Major insurers such as AIG then insured these ticking time-bombs for their purchasers against default. Due to their high risk these CDOs were extremely profitable to insure as well as to have in one's portfolio--so long as housing values continued to rise and HOMEOWNERS DID NOT DEFAULT.
Warren Buffet warned that this derivative market held weapons of mass economic destruction for reasons that should have been obvious to all. Once consumers, whose plastic had hit the max and facing rising costs for fuel and food, could no longer consume at the levels necessary to sustain a consumer economy, the warning lights began to flash. The straw that finally broke the camel's back was when all of those adjustable rate mortgages adjusted in the only direction they could go given the fact that interest rates were at 40 year lows at the time. Mortgage defaults began their record climb in the summer of 2007 and have not abated. In addition the housing bubble began its inevitable deflation as these unrealistic values began to "correct" to levels commensurate with fundamentals.
As we all know now, those CDOs became toxic to the Wall Street investment banks, hedge funds, and insurers that held them on their books. Once they failed to find suckers to offload them to, they did what every free-market fundamentalist does when the Bear comes knocking--they ran to the government. And do you know what happened when some of the richest people in recorded human history asked Congress to offload the toxic waste created by their own recklessness and greed onto the hapless taxpayers? THEY SUCCEEDED!!!
Rue you have got to stop thinking in terms of "Republicans" and "Democrats" for these distinctions have no real meaning. There is the ruling class and everyone else. BOTH parties have demonstrated unequivocally whom they serve.
rue,
Stop smoking the hannity crack! Blaming the goverment for providing loans to the " ghetto" isn't the reason this country turmoil. Reagan was the biggest crook there was and Bush's war is part of the reason we are in this mess.clinton's nafta plan took away jobs! This unbalanced capitalist system is bound to break because of greed and can only suceed with a class system. Absolute power corrupts absolutely! McCain running to DC will not solve this problem neither will a VP canidate that thinks isreal shouldn't be second guessed.
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