The Bush administration wants to bail the banks out to the tune of 700 billion dollars.
Everything was fine when the private banks were making millions but now that they are in trouble Bush is suggesting a national socialist bail out.
Should the banks be immuned to the free market society?
And should the American taxpayer be saddled with their debt?
Meanwhile while 1 in 9 homes in Cleavland are under foreclosure due to predatory subprime lending practices some American cities plan to sue banks.
http://njaes.rutgers.edu/presentations/ … .asp?id=44
And now the FBI has opened criminal investigations against some banks that include accounting fraud and insider trading.
http://www.reuters.com/article/topNews/ … 6920080129
http://www.cbc.ca/money/story/2008/09/2 … ml?ref=rss
I posted this below in the religious forums a couple of weeks ago as one of many reasons why I believe Darwinism should not be taught to children in schools.
But now after this proposed bail out do you not think that Christian Rakovsky's quotes are more relevant and scary now under today's circumstances?
Communism is socialism at the end of a gunbarrel. The only thing missing in this country are the guns.
Mike - I have been calling this communism for ages:
How to f*** up and make millions
Bailing FM and FM out is communism
And I promise you a lot more people read my blog than this forum.
But, how you make the leap of faith, that when a christian president, and christian bankers, in a christian country screw the people to this extent it then becomes a reason not to teach a scientific theory in school, is beyond me.
Well certainly the American free market system is not dead! The problem is those that took the risks thought they had the backing of the government and that their risks would be covered. Of course to bail them out now sends the message that they were correct in their assumption and rewards them for bad behaviour. No, we should not bail them out, but then we (the American people) must be willing to live with the repercussions of that decision. The problem with Americans today is we want it all but we don't want to sacrifice anything to get it. We want energy independence but we continue to do nothing to curb our addiction. We want material things, but we won't save to buy them, we want to use credit instead.
The government should be less involved in regulation and the risk takers should suffer the consequences of their decisions even if it means a collapse of our economy, and the American people will have to accept whatever level of pain is a result.
As for Darwin, I can't imagine why his theories shouldn't be taught in school.
I just heard Obama on the news. Apparently the Presidential debate is going to be delayed. Democrats and Republicans are coming together for a bipartisan solution. So far it looks like the bail outs are imminent but the banks will have to pay back their debt, I believe with interest. Yesterday I watched a senior economist suggest something similar. It sounds like the best plan to me seeing the banks won't get off the hook scot free.
"The government should be less involved in regulation and the risk takers should suffer the consequences of their decisions even if it means a collapse of our economy, and the American people will have to accept whatever level of pain is a result." Your not getting it me thinks. The meltdown comes from deregualtion, namely the repeal of Glass/Segal Act put in place after the depression to prevent this sort of thing.
"risk takers should suffer the consequences of their decisions"
The risk takers are not going to suffer, you are going to pay for it
and you are going to suffer - 700 billion and counting.
I think we all already suffer to some degree, picking up for someone elses mistakes and of course vise versa. The whole world is suffering for everyone elses mistakes and our own mistakes.
I don't think there is anyone to blame really. If you blame one, blame us all or don't blame anyone.
If people didn't have the money to buy a house, they shouldn't have gotten themselves into their contracts. Of course the lenders shouldn't have allowed them into it either.
I think it sort of a boring subject now though, I just want to see what happens. Anyways did anyone watch Ahmedinejad's interview last night?
Also Obama mentioned there may be help for families that are losing their homes seeing the bank's predatory lending practices and the FBI investigating the banks.
Yep Misha, the hammer is coming down but possibly not where you expect it to.
No but I heard he blamed the meltdown on the cost of Bush's illegal wars. I don't disagree.
I guess you don't understand the meaning of predatory lending.
It was more like he said it was because Bush is neglecting his people and persuing Iran instead using that money on health care and stuff.
It was a pretty interesting converstation. He was cut off when asked that question.
He also said that Iran has nothing on America and that we shouldn't worry about nuclear war. He said, in other words, that Iran would crazy to do such a thing because they are a small country compared to America.
Mike, lending is not shooting. It takes two parties to sign the contract.
I think you should read up on the banks predatory subprime lending practices a bit Misha.
People that qualified for prime mortgages were being conned into subprime mortgages by brokers that got paid premiums by the banks for selling subprime mortgages instead of prime mortgages.
A year or two into the variable subprime mortgages the interest rates would skyrocket.
The hammer is coming down on the banks as it should.
What makes you thinking I didn't? I did, and quite a bit. And I did my share of thinking and analyzing, too. And because of that I am not in such a mortgage.
People who signed those contracts did not do their homework, and life is not a kindergarten. Nobody put a gun to their head to force them to sign. And choices always have consequences...
Well there must be more to it than either of us realize Misha seeing cities are making plans to sue banks and the FBI are investigating a horde of banks.
I also watched a documentary that said the Governor of Ohio along with a lawyer by the name of Krammer plan to go after Wall Street as well as the banks. You know seeing Wall Street investors are the final holders of the mortgages.
Who knows, maybe they are uncovering a communist plot to undermine the world economy.
No Mike, I don't think it's a plot, it's just a banal human greed and ignorance on both sides of a contract, no more no less...
I think it is more like they are investigating to see whether these companies were cooking their accounting books. Sorta like Enron. There was never any money.
Well seeing so many banks are involved that obviously would know this outcome was inevitable something does sound very fishy.
The conspiracy to which you allude Mike may be called 'rule to ruin'. Some predicted that the bush admin would bankrupt the country as long as 6 or 7 years ago. It is well known that the bush faction of (whatever) hates socialism. So the conspiracy theory is that there will be no money for things like Social Security, Medical and Medicate, universal health care and other big gov programs. So they will all have to be what - privatized.
FDR said if it happen in politics, you can bet it was planned that way.
Meanwhile, the puppets dance to the tune. And Bush continues his family's part to usher in the manifest destiny of the Unites States as revealed in her offical iconography......novus ordo seclorum - The New World Order
Is that right knolyourself. Scary.
Communists have something that sounds very similar, Rule or Ruin.
Yeah Ben, I don't believe it was just a coincidence that the first American politician that spoke about the New World Order was daddy bush on September 11, 1991, exactly 10 years to the day before 9/11.
The first one to speak about it was Charles Thomson, the genuis behind the United States Official Government Seal. The Founding Fathers knew what they were setting up.
Actually Ben this wikipedia says Novus Ordo Seclorum "is incorrectly rendered as "New World Order". But then it also says that "Benjamin Franklin was the only Mason among the various Great Seal committees, and his ideas were not adopted." Maybe this wikipedia needs to be edited?
http://en.wikipedia.org/wiki/Great_Seal … ted_States
I believe it needs to be updated. They tell you that the word "World" at one time was used for "age." That's after they tell you that "New World Order" is an improper rendering of Novus Ordo Seclorum. MMmmmm.
They tell you Franklins ideas were not adpoted, then they tell you that Thomson adopted a combination of all three previous attempts to design the seal. Go figure.
Interesting conversation, No offense, Mike, but I think that some of the things that you say are in left field! Not only that, they should be on a related but separtate thread. I agree with Misha: That this is not kindergarten. The people who signed on to those contracts should have done their homework. Not only that, they should have remembered the saying, "Buyer Beware". In addition, they should have consulted with an attorney before they signed on the dotted line. Last, if you are applying for a subprime mortgage, what in the devil are you doing signing on to a variable rate! A subprime rate mortgage is bad in itself. A subprime rate mortgage coupled with a variabe rate is equivalent with the kiss of death. It like many a deal with the devil.
I partly agree with you and Misha, life is not a kindergarden and "buyer beware" applies in many buying situations. I do not feel this should apply to quality graded financial products that have been based on over valued property as security, and thus were nothing like AAA
The poor and ignorant should not be expected to be hood-winked by their country''s Banks and financial institutions either, and Misha many of these people almost did have a gun to their heads.
Having food and somewhere to sleep gets to be pretty important if you have kids to look after.
These people should not be losing their only homes because as usual being behind financially they looked to these products for help them to survive by whatever means.
I can see that many wealthy and middle class Americans took risk to enhance their wealth, and although they have lost heavily and that will be hard for them, they will survive, and the old adage applies. Big profits mean big risks. I am very sorry for those who made an error in judgment and consequentially lost a lot of money but they are not in the sort of predicament many poor people are now in.
Many of these mortgagees would have shopped for ever higher valuations for their properties and were using the valuation and ever-rising equity for leverage to acquire more property.
These people were not ignorant about finances and will just have to wear the losses themselves.
The Banks and financial institutions on the other hand should ensure that payouts to the "geniuses" who ran these rorts must be handed back.
I do hope some enforcement of corporate responsibility is in the outcome, as you suggested. .
I think we have or are veering away from the original thread. My answer to the thread is that American free market society as we know it --if this bailout thing goes into law--will be dead. After all, the American free market is not totally free now. However, if this bailout is passed, our "free market system" will be even less free then. This thing is big and could possibly have grave consequences for society!
The North American Union is exactly what I have been concerned about in this thread that I started 2 weeks ago.
It's coming and there's not a thing you or I or anyone else is going to do about it.
The prudent man sees the evil coming and prepares himself. - Proverbs
Not necessarily Ben.
Canadians will not tolerate the North American Union. Depending on the Liberal stance, preventing a Harper Conservative majority in Canada on October 14th will derail the North American Union. Both the NDP and the Green Party of Canada are directly opposed to the North American Union. I still have not found out what the Liberal stance is yet regarding the North American Union.
if this bailout and Paulson's plan are put into effect, Paulson will become de facto economic dictator of the US
section 8 of his proposal reads
Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
http://www.huffingtonpost.com/2008/09/2 … 28294.html
when the authorities are able to introduce laws without legal challenge or review being allowed this is fascism.
i believe this was the ultimate aim of the Bush administration so they and the federal reserve - which isn't federal, it's owned by a private consortium of Rothschild banks - allowed this to happen as they knew it would create the climate which would allow them to grab power in the way they are attempting to.
deliberately create a problem so that you can implement your plan to 'solve' it
Yeah Peter, Christopher Dodd's proposal seems more reasonable by "demanding foreclosure assistance, limits on executive compensation and profit sharing for taxpayers if the Treasury begins to make money back on the bad debt it plans to purchase."
http://www.politico.com/blogs/thecrypt/ … _plan.html
I believe that your remarks were very perceptive. Let me add that the Bush administrative is no stranger to trying to operate outside of the law of the land--Guantanamo Bay is a case in point. Also, the bailout matter sounds like a pressure sales strategy to force people to act and not think or deliberate about the ultimate consequences of bailout itself. It's like they are have pinned Congress against the wall with their pants down. And Congress is being pressured to act before they have time to think, And yes, facism is raising or at least trying to raise its ugly head as it did in Germany before the Third Reich slipped in through the back door.
Now there is a site with a petition to vote no to the bailout.
Yeah and look at the reverse of the seal. Not masonic symbols at all. Yeah right.
I think anyone can create a wikipedia account and edit some of the wikipedias but I've heard that some edits don't take.
Yeah Misha most of them are good for a quick source but there's problems with a lot of them.
This is entirely an election year stunt. President Bush is playing with Tax payers money to save his popularity and to help his party. In no way it will help American economy revive.
I just wrote a hub that I'm really excited about. My idea centers around the notion that the government should offer mortgages directly to distressed home owners, through existing home loan programs at HUD and USDA RA. It seems to me that would help Main Street and Wall Street at the same time and would help people stay in their homes.
Would that mean that the government has control of the houses/homes and that they can decide what's done with them? I love our country with all my heart, but look at what the government has done for us lately money-wise. And the control they are trying to take. We are loosing more and more of our freedoms to them. What if they got the power to control our houses by having the mortgages? As crooked as some of them are, I shudder to think of what they could do. I know someone who has a HUD house. They control the size of it, if its brick or wood, where it can be built at, if you can sell it, the layout of the floor plan, etc She will pay for it for the rest of her life and it's already falling apart because of shotty materials. I just have a problem trusting the government.
No, not at all. The government would replace the bank as the financing source. USDA Rural Agriculture has loans that they offer to people who don't qualify for loans through traditional sources, and the terms are good enough because the government isn't aiming to make a big profit off the interest (one such loan carries a 1 percent interest rate, and loans can be extended as far out as 38 years, which brings the monthly payments down to a point that most people can afford.)
My mother-in-law has a house like that. She had to go that route because her husband left. She pays a low monthly payment, but she'll never get it paid off because of how they write the loan out. They have control of all the things I mentioned in my earlier hub. And, when she dies, they will get it and someone else will move in and they will charge them too much for it like they did her and they'll pay for their whole lives too. It's not ethical how they do it. If you're going to pay for a house for your entire life, shouldn't you get to make some choices on it?
I like your idea crash. You should send it to your representative.
crash it looks like others have thought the same as your idea.
In this video Dennis Kucinich asks "Is this the U.S. Congress or the Board of Directors at Goldman Sachs?"
"I just have a problem trusting the government." Maybe that is because the government is controlled by capitalists. The Senate is going to vote thru the 'thief-relief' legislation tonight.
As American economy cracks down, people has to face all these as their fate. More than 75% of global population have been facing such things for a very long time.
by Shawn McIntyre4 years ago
The following question was asked on one of my articles (Economics For Beginners: The Subprime Mortgage Crisis). It's a great question, and one deserving of an answer, but an article designed for beginners simply wasn't...
by rhamson8 years ago
With the recent collapse of the insurance companies sub prime rates and government bail outs, can our capitalist based market system be trusted to right itself?
by Gary Anderson5 years ago
Hey Even, Mises said big business was not evil. To be fair, he did not live to see the TBTF banks, but I am waiting for his libertarian followers duped by this stuff to say the TBTF banks ARE evil. Say it Evan!Here is...
by pgrundy9 years ago
I guess the Fed felt like it had no choice but to pull this latest giant intervention out of its butt at the 11th hour, but our national debt is twice what it was last year even without Fannie & Freddie included and...
by Moderndayslave4 years ago
The financial meltdown that was caused by the banks in 2008 has been thrust upon the shoulders of American citizens to bail them out. The reasoning was they are "Too big To Fail" The repercussions of this are...
by Jyoti Kothari9 years ago
Many European banks are now in distress. Be it in Germany,Netherlands or UK. Govts. in Europe are coming forward to bailout them but they have to face the consequences of American bubble bust.Jyoti Kothari
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