At the beginning of the presidential campaign, one plank in Texas Representative Ron Paul’s platform was a return to “hard money”, i.e. a gold based currency rather than the fiat money system presently in use. I agree completely with Rep. Paul’s idea, but unfortunately it’s not feasible in today’s world. There ain’t that much gold in existence! There’s somewhere in the neighborhood of 140,000 tons of gold available in the world today, and if it was formed into a single gold bar it would be a cube roughly 60 feet on a side (that includes all the privately held coins, bars and jewelry in the world, which is about 75% of the total supply). All that gold totals up to about $1.8 trillion, or about $250 for each person in today’s world (depending on whatever today’s gold price is). America's gold reserve is only about an eighth of that of that total, far less that our (arguable) national debt of $6.9 trillion! It would seem that Fort Knox is little more than a modest sized national piggy bank despite the mountains of “gold bars” that we sometimes see in the movies. There's not all that much gold left in the ground anymore either. Approximately 50,000 tonnes (about a third of what has already been dug out) remains un-mined according to the best guesses of the geologists, and will cost a large fortune to extract. Meanwhile - after more detailed worldwide surveys - the mining industry consensus is that large mineral deposit discoveries are now a thing of the past. Gold, as always, is extremely scarce.
No, despite the high hopes of some people, the idea of the public running around with a pocketful of gold coins isn’t going to happen. Silver and platinum coins would help of course, but there we run into the continuing problem of scarcity, and the very high industrial demand for those metals. Precious gems perhaps? England has their crown jewels of course, but the United States has never had anything similar to fall back on… well, except for Liz Taylor’s jewelry box perhaps.
The term “money” is generally used to indicate anything that is used as a medium of exchange in payment for goods and services, or the repayment of debts. The main uses of money are in exchange, accounting, and as a convenient store of value. Way back when, if the King had to travel anywhere, the national treasury usually went along in the form of gold bars or coins, carried in a chest of some sort and well guarded at that. Due to the inconvenience that brought on, some other form of “money” was required that could be easily carried. After all, it is rather inconvenient to travel with a mid-sized treasure chest full of gold coins, being guarded by a bunch of big, burley, intimidating looking guys carrying swords. Back about 1600 BC, the Chinese invented “paper money”, which was nothing more than a promissory note redeemable for a stated amount of gold or silver, and was much easier to carry around. Used on and off for centuries, paper was a handy medium of exchange when large amounts of money were involved, but most folks still preferred the jingle of gold and silver in their pocket or purse.
Hard pressed to finance the Revolution, the Continental Congress issued paper money called “Continentals”, that were nothing more than vague promises to “pay” sometime in the far and unspecified future. During the Civil War, and for the same reason, the U.S. government resumed printing paper currency. These "greenbacks" were once again nothing more than a promise to pay at some time in the future, because they were not backed by the gold or silver resources in the national treasury. Through the following century the demand for currency far outstripped the available supply of precious metals, leading to the American abandonment of silver coins and silver certificates in the 1960’s, in favor of what’s called “Fiat Money”. Today, no country in the world backs their money with gold or silver. When a government is unable to pay its debts in gold or silver, the temptation to remove the physical backing of the currency becomes irresistible, and a system wherein money is not backed by anything of physical value develops. With that system, the value of money is based only on scarcity and public confidence that it can be exchanged for something of value. If that confidence is damaged the money inevitably becomes worthless. Nor is there any limit on the amount of money that can be printed. This allows creation of unlimited credit along with government “control” of inflation, or so goes the theory. Initially, a rapid growth in the availability of credit is mistaken for economic growth as business profits grow, and thus the artificial wealth for a select few. In the long run however, the economy tends to suffer. Hyper-inflation is the terminal stage of any fiat currency where the currency looses most of its value seemingly overnight, and is often the result of increasing inflation to the point where all confidence in money is lost. Well, not long back I was severely castigated by a reader for opposing a general “redistribution” of wealth in this country, as proposed by the liberals. That reader shouldn’t worry, at the rate we’re going there soon won’t be any wealth left to redistribute!
The nation’s founding fathers were greatly concerned about government control of the money supply. One thing they all agreed on was limits to the issuance of money, and the belief that no “central bank” should have such control. Thomas Jefferson warned of handing that control of the money supply to the banking industry, "I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. This issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered. I hope we shall crush in its birth the aristocracy of the moneyed corporations which already dare to challenge our Government to a trial of strength and bid defiance to the laws of our country". In 1913 the US Congress created the Federal Reserve Banking System, a semi-autonomous “central bank” that controls our money supply and thus our economy, and that just happens to be run by the same banking elite that Jefferson warned us about.
The Crash of 2008 is wiping out our people's wealth. Seizing on the crisis, the left says we are witnessing the failure of market economics. Horsefeathers! What we are witnessing is the collapse of "Greed Is Good!" capitalism. We are witnessing what happens when a nation ignores history and abandons the principals that made it great. "Government must save us!" cries the left… yeah, that same government (both political parties I might mention), that got us into this mess with easy money policies, unbalanced budgets, and nearly limitless federal spending. Today government expects an unelected financial elite to get us out of an economic disaster that the same unelected financial elite got us into!
The spending party's over folks. Will the last person to leave please turn out the lights?
Wednesday, October 22, 2008
Sunday, October 12, 2008
A lesson from history
Many of us can well remember the tumultuous years of the 1960’s and 70’s, with the never ending war in Vietnam, the racial hatreds, incessant riots, civil disobedience, “Urban Guerillas” national disunity, the Kennedy and King assignations, dirty tricks in national politics, and a presidential resignation. Shortly thereafter we ran full tilt into an oil shortage, rapidly escalating prices, the Iran hostage crisis, and finally the economic slump of the early 1980’s. In many ways most of us would probably prefer to forget that era completely, but still, we somehow managed to survive the times. Yet that “bad times” era certainly could have been a lot worse, I think I learned a lot from it, and the nation should have as well. Still, the ongoing revision of American history in recent years (generally done by leftist academics trying to make the US out the bad guys, or to “prove” some social or political theory), has only denied those lessons, promoted a great disservice to the American people, and left a lie for future generations to study. Those were momentous times in the history of our nation and should be presented to us and to future generations as they actually happened.
The “baggage” we carry around with us… our memories, experiences, and our knowledge of the past… our history in other words, is what makes us the people and the nation we are. And I would think that history might have a bearing on who we select as the leaders of our nation, based on what was done, right or wrong, in the past. The wisdom of past experience should be expected to show in today’s decisions. Today we’re saddled with a historic debt, two wars, health care issues, a weak dollar, an all-time high prison population, skyrocketing Federal spending, faltering social security, bank foreclosures, and a crashing economy, making this a critical election year. Had they known they were about to face all those problems, I wonder if Senators McCain or Obama would have decided to forget all about running for office this time around! For those interested, history shows us that whoever gets the job is going to take a beating, and the party in power is really going to take a real heavy hit!
With the president at the wheel, he is the first one blamed if things go wrong. But, if you think the President actually has the power to change things, you're sadly mistaken. The President is little more than a talking head, while the Senate is charged with government oversight and the House determines government spending, leaving the president to beg, plead, and cajole for whatever program he believes best. It's the people we send to Congress that are going to make things happen for good or ill. When you look at the failing economy, remember that congress has been headed by the Democrats for the last 2 years. Yes, it took much more than two years for our economic crisis to gather steam, but it was started by left wing economic policies, and the far left politicians have had their hand on the throttle for years. Now, they want to “change” things, with even more taxes, more government spending, and more government interference in our daily lives.
The Crash of ’29 was caused, plain and simple, by greed in the business sector. Credit was cheap, to many people jumped on the stock market bandwagon with that cheap credit, and when the bills came due, there wasn’t any hard money to pay them with. (Credit is after all, nothing more than a promissory note.) The folks jumping out of Wall St. windows weren’t the financial fat cats of the day, but rather the little guys who suddenly found they’d pawned the kid’s future on harebrained schemes. We’re looking at a similar situation today, in that far to many people jumped into a rather shaky investment market in the hopes of getting rich quick. When the housing bubble popped it took much of that investment business down with it. Neither the president or congress had much, if any, control over that. We can blame the Federal Reserve in part, for constantly tinkering with interest rates, rather than simply letting the market find it’s own level, but the Fed is a semi-autonomous part of the government that pretty well does what it wants. We can blame the Treasury Department for not properly regulating Wall St., but Congress had long ago ended much of that oversight authority. We might also keep in mind that the economy had been growing slowly but steadily throughout the Bush administration. Blaming the Republicans, the President, and “greedy corporations” for all the bad things that are happening in our world is nothing but a nice way to shift the responsibility away from the lousy job Nancy Pelosi, Harry Reid, and the Democratic Congress have done with the mandate given them two years ago. Or at least they claimed they had a mandate when they took control of congress.
In the aftermath of the ’29 crash, Americans floundered around a bit at the start, and then dug in their heels, joined hands, and went to work solving the problem for themselves. Friends, families, neighbors, and entire communities pretty well stuck together, supported each other, and began rebuilding. The government started borrowing money and scattered it around with considerable fanfare, claiming that FDR’s brand of socialism was saving us. But what’s going to happen now if our economy continues to crumble? There’s not much money left for CCC and WPA projects, nor are we the people we once were, today we’re a “diverse” society remember, a random collection of strangers who usually don’t know each other, or even speak the same language, much less have common goals!
I'm registered as an independent, and for years I've voted for whomever I considered the best candidates from both Parties. If the Democrats can ever remember that they lost the last two elections because they keep shoving a far left agenda on us, and blaming everything on “knuckle dragging, trailer trash Christian fundamentalists”, I might consider voting for them again, sometime in the far future. Remember too that after 9/11 the Democrats were saying, “How is this our fault? How are we to blame for this?” while the Republicans were saying, “This is pure evil, and we need to fight this now.” Today, their “agent of change” is another elitist pushing a far left agenda, and who blames everything on “bitter working-class voters who cling to guns or religion or antipathy to people who aren't like them, or anti-immigrant sentiment or anti-trade sentiment, as a way to explain their frustrations." No, I’ll remember past experiences, and again vote for the person who will best accomplish what I want done. I wouldn't vote for Sen. Obama as president as he’s not likely to change the things I want changed. I’m not overly happy with Sen. McCain either, but I have a fair idea of how he’d handle things.
I’m also going to remember that the last three people the Democrats sent to the White House included a “good old boy” from Texas who gave us a major war and divided the nation, a peanut farmer from Georgia who gave us some failed social programs along with the Iranian situation, and lastly a slick talker from Arkansas who saw nothing wrong with chasing interns around the Oval Office. Now they want us to elect a far left radical from Chicago!
The “baggage” we carry around with us… our memories, experiences, and our knowledge of the past… our history in other words, is what makes us the people and the nation we are. And I would think that history might have a bearing on who we select as the leaders of our nation, based on what was done, right or wrong, in the past. The wisdom of past experience should be expected to show in today’s decisions. Today we’re saddled with a historic debt, two wars, health care issues, a weak dollar, an all-time high prison population, skyrocketing Federal spending, faltering social security, bank foreclosures, and a crashing economy, making this a critical election year. Had they known they were about to face all those problems, I wonder if Senators McCain or Obama would have decided to forget all about running for office this time around! For those interested, history shows us that whoever gets the job is going to take a beating, and the party in power is really going to take a real heavy hit!
With the president at the wheel, he is the first one blamed if things go wrong. But, if you think the President actually has the power to change things, you're sadly mistaken. The President is little more than a talking head, while the Senate is charged with government oversight and the House determines government spending, leaving the president to beg, plead, and cajole for whatever program he believes best. It's the people we send to Congress that are going to make things happen for good or ill. When you look at the failing economy, remember that congress has been headed by the Democrats for the last 2 years. Yes, it took much more than two years for our economic crisis to gather steam, but it was started by left wing economic policies, and the far left politicians have had their hand on the throttle for years. Now, they want to “change” things, with even more taxes, more government spending, and more government interference in our daily lives.
The Crash of ’29 was caused, plain and simple, by greed in the business sector. Credit was cheap, to many people jumped on the stock market bandwagon with that cheap credit, and when the bills came due, there wasn’t any hard money to pay them with. (Credit is after all, nothing more than a promissory note.) The folks jumping out of Wall St. windows weren’t the financial fat cats of the day, but rather the little guys who suddenly found they’d pawned the kid’s future on harebrained schemes. We’re looking at a similar situation today, in that far to many people jumped into a rather shaky investment market in the hopes of getting rich quick. When the housing bubble popped it took much of that investment business down with it. Neither the president or congress had much, if any, control over that. We can blame the Federal Reserve in part, for constantly tinkering with interest rates, rather than simply letting the market find it’s own level, but the Fed is a semi-autonomous part of the government that pretty well does what it wants. We can blame the Treasury Department for not properly regulating Wall St., but Congress had long ago ended much of that oversight authority. We might also keep in mind that the economy had been growing slowly but steadily throughout the Bush administration. Blaming the Republicans, the President, and “greedy corporations” for all the bad things that are happening in our world is nothing but a nice way to shift the responsibility away from the lousy job Nancy Pelosi, Harry Reid, and the Democratic Congress have done with the mandate given them two years ago. Or at least they claimed they had a mandate when they took control of congress.
In the aftermath of the ’29 crash, Americans floundered around a bit at the start, and then dug in their heels, joined hands, and went to work solving the problem for themselves. Friends, families, neighbors, and entire communities pretty well stuck together, supported each other, and began rebuilding. The government started borrowing money and scattered it around with considerable fanfare, claiming that FDR’s brand of socialism was saving us. But what’s going to happen now if our economy continues to crumble? There’s not much money left for CCC and WPA projects, nor are we the people we once were, today we’re a “diverse” society remember, a random collection of strangers who usually don’t know each other, or even speak the same language, much less have common goals!
I'm registered as an independent, and for years I've voted for whomever I considered the best candidates from both Parties. If the Democrats can ever remember that they lost the last two elections because they keep shoving a far left agenda on us, and blaming everything on “knuckle dragging, trailer trash Christian fundamentalists”, I might consider voting for them again, sometime in the far future. Remember too that after 9/11 the Democrats were saying, “How is this our fault? How are we to blame for this?” while the Republicans were saying, “This is pure evil, and we need to fight this now.” Today, their “agent of change” is another elitist pushing a far left agenda, and who blames everything on “bitter working-class voters who cling to guns or religion or antipathy to people who aren't like them, or anti-immigrant sentiment or anti-trade sentiment, as a way to explain their frustrations." No, I’ll remember past experiences, and again vote for the person who will best accomplish what I want done. I wouldn't vote for Sen. Obama as president as he’s not likely to change the things I want changed. I’m not overly happy with Sen. McCain either, but I have a fair idea of how he’d handle things.
I’m also going to remember that the last three people the Democrats sent to the White House included a “good old boy” from Texas who gave us a major war and divided the nation, a peanut farmer from Georgia who gave us some failed social programs along with the Iranian situation, and lastly a slick talker from Arkansas who saw nothing wrong with chasing interns around the Oval Office. Now they want us to elect a far left radical from Chicago!
Monday, October 6, 2008
Bailout?
The big to-do of late has been the housing bubble burst, followed by the sub-prime mortgage crisis, and now the investment banking failure and bailout. The Federal Reserve tells us that we’re supposed to save the national economy by handing those same failed banks a few hundred billion dollars! I’m not an economist, and if I had all the answers I’d probably be the Secretary of the Treasury instead of writing this column, but I’ll toss my nickels worth in anyway. Ready? I think this is the biggest confidence game pulled on the American taxpayer in the history of the United States, and our illustrious Congress is going along with it!
While the banks must take a lot of the responsibility for the current mess, the crisis was initiated when “political correctness” was forced on the mortgage industry during the Clinton years. The In 1992 the Los Angeles Times reported that a Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains." All well and fine on the face of it, but like everything else financial, don’t get carried away! Under the Clinton administration the federal government pressured banks to grant more mortgages to the poor and minorities. Clinton's man at HUD, Andrew Cuomo, proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate income borrowers. Instead of looking at "outdated criteria," like the applicant's credit rating or ability to make a down payment, banks were “encouraged” to consider nontraditional measures of credit-worthiness, such as having a good collection of unpaid bills I presume. Threatening lawsuits, the Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage! (I wish they’d have done something like that for me!) Worse yet, the Republicans went along with it!
The housing bubble collapse and the eschewing mortgage crisis could have been, and often was, predicted by just about anyone who bothered to look at the greatly overvalued real estate prices over the last few years. There are always people around with “more money than brains” however, who will pay an exorbitant price so that they can have a second home in a rustic setting, or perhaps something “with a great view”. Well and fine if that’s what they want, and can afford it. But to pay for that expensive view, the homeowner probably had to go out and borrow the money, usually from a bank in the form of a mortgage. Banks like to trade those mortgages around, pretending they’re cash instead of a debt, and it doesn’t take long before some really big outfit called an “investment bank” holds thousands of them after having borrowed a few billion dollars here and there to buy all that questionable paper. They plan to get rich as people slowly pay off the loan on their individual properties. This often results in one bank or another having borrowed a whole lot more money than they really should have, and is sometimes called the “greed is good” form of business as they work the cash flow and lie to their stockholders in trying to stay afloat, and not incidentally paying the CEO and his cohorts some fantastic wages.
Now we get to the fly in the ointment. If the homeowner’s income is reduced, say perhaps because of a general business downturn or his perhaps his welfare check got cut, he may be forced to default on that mortgage loan because now he can’t make the payments, or even sell the property at its inflated price. As the downturn continues or worsens, the investment banks find themselves in a jam as those defaulted mortgages start piling up, and their monthly income isn’t showing up as scheduled. Meanwhile, back on Wall Street, the folks that made those huge loans to the investment banks are demanding their money back. Now, when the mortgage company can’t make their payments on time they go bankrupt. The repercussions of all these financial shenanigans then echo through the entire economy, and with today’s economic globalization those echoes are heard around the world. This leaves the super rich people out a few million dollars each, while a good many small potatoes investors find their stock portfolios aren’t worth quite what they thought, and their retirement incomes are going to be a lot less than they had figured on. And all because the housing bubble burst and far to many food stamp based mortgages collapsed.
This time around it’s not just a case of keeping Chrysler or the Saving and Loan industry in business either. This is the fifth bailout this year, as we’ve already handed Bear Stearns, Fannie Mae, Freddie Mac and AIG a lot of money, and now we’re looking at another seven hundred billion dollars which is supposed to save our (and the rest of the worlds), economy from falling apart! The next logical question is, just how much is $700 billion? Quite a lot really, or not that much, depending on your viewpoint. With about 300 million men, women, and children living in the United States the bailout will cost us roughly $2,300 per person, or slightly less than our average personal tax burden of $2,432. In other words, about twelve times the total worth of Bill Gates, or half the combined wealth of the Forbes 400 list.
Skeptics are calling this $700 billion rescue plan for the U.S. financial system "cash for trash" as the current plan is for the US Government to buy many of those defaulted mortgages in the hope that someday they’ll get our money back, which is a rather questionable assumption I’d think. The scary part is that the Treasury Department wants a free hand from Congress, or rather they want seven hundred billion dollars to do with as they wish, with no congressional oversight and no legal constraints! This crisis could have been avoided if the federal bank regulators from the treasury been doing their jobs and enforced the rules. They’ve also been telling us how great everything was going for the last couple of years. Now, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson insist they’ve got all the answers and we’re supposed to blindly “trust” them without any guarantee that their plan will even work!?
Unfortunately, this economic mess is going to severely effect the upcoming election as well. Remember what happened in the aftermath of the 1929 stock market crash? The Democrats blamed everything on Herbert Hoover and the Republicans instead of the of the financial industry that caused the problem in the first place. FDR got elected president, the American people got the “New Deal” crammed down their throats, and we’ve been fending off rampant socialism ever since! Here however, we have the Democrats' affirmative action lending policies starting the fire, and sure enough they’ll happily blame the Republican administration instead of their own failed “bright ideas”. Thanks to political correctness, and if this last ditch bailout flops as it very well might, we can soon expect to see the Mother-in-Law of all financial crashes!
According to political cartoonist Robert Ariail, the new motto at Treasury is, “From each taxpayer according to his abilities, to each investment banker according to his needs.”
While the banks must take a lot of the responsibility for the current mess, the crisis was initiated when “political correctness” was forced on the mortgage industry during the Clinton years. The In 1992 the Los Angeles Times reported that a Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains." All well and fine on the face of it, but like everything else financial, don’t get carried away! Under the Clinton administration the federal government pressured banks to grant more mortgages to the poor and minorities. Clinton's man at HUD, Andrew Cuomo, proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate income borrowers. Instead of looking at "outdated criteria," like the applicant's credit rating or ability to make a down payment, banks were “encouraged” to consider nontraditional measures of credit-worthiness, such as having a good collection of unpaid bills I presume. Threatening lawsuits, the Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage! (I wish they’d have done something like that for me!) Worse yet, the Republicans went along with it!
The housing bubble collapse and the eschewing mortgage crisis could have been, and often was, predicted by just about anyone who bothered to look at the greatly overvalued real estate prices over the last few years. There are always people around with “more money than brains” however, who will pay an exorbitant price so that they can have a second home in a rustic setting, or perhaps something “with a great view”. Well and fine if that’s what they want, and can afford it. But to pay for that expensive view, the homeowner probably had to go out and borrow the money, usually from a bank in the form of a mortgage. Banks like to trade those mortgages around, pretending they’re cash instead of a debt, and it doesn’t take long before some really big outfit called an “investment bank” holds thousands of them after having borrowed a few billion dollars here and there to buy all that questionable paper. They plan to get rich as people slowly pay off the loan on their individual properties. This often results in one bank or another having borrowed a whole lot more money than they really should have, and is sometimes called the “greed is good” form of business as they work the cash flow and lie to their stockholders in trying to stay afloat, and not incidentally paying the CEO and his cohorts some fantastic wages.
Now we get to the fly in the ointment. If the homeowner’s income is reduced, say perhaps because of a general business downturn or his perhaps his welfare check got cut, he may be forced to default on that mortgage loan because now he can’t make the payments, or even sell the property at its inflated price. As the downturn continues or worsens, the investment banks find themselves in a jam as those defaulted mortgages start piling up, and their monthly income isn’t showing up as scheduled. Meanwhile, back on Wall Street, the folks that made those huge loans to the investment banks are demanding their money back. Now, when the mortgage company can’t make their payments on time they go bankrupt. The repercussions of all these financial shenanigans then echo through the entire economy, and with today’s economic globalization those echoes are heard around the world. This leaves the super rich people out a few million dollars each, while a good many small potatoes investors find their stock portfolios aren’t worth quite what they thought, and their retirement incomes are going to be a lot less than they had figured on. And all because the housing bubble burst and far to many food stamp based mortgages collapsed.
This time around it’s not just a case of keeping Chrysler or the Saving and Loan industry in business either. This is the fifth bailout this year, as we’ve already handed Bear Stearns, Fannie Mae, Freddie Mac and AIG a lot of money, and now we’re looking at another seven hundred billion dollars which is supposed to save our (and the rest of the worlds), economy from falling apart! The next logical question is, just how much is $700 billion? Quite a lot really, or not that much, depending on your viewpoint. With about 300 million men, women, and children living in the United States the bailout will cost us roughly $2,300 per person, or slightly less than our average personal tax burden of $2,432. In other words, about twelve times the total worth of Bill Gates, or half the combined wealth of the Forbes 400 list.
Skeptics are calling this $700 billion rescue plan for the U.S. financial system "cash for trash" as the current plan is for the US Government to buy many of those defaulted mortgages in the hope that someday they’ll get our money back, which is a rather questionable assumption I’d think. The scary part is that the Treasury Department wants a free hand from Congress, or rather they want seven hundred billion dollars to do with as they wish, with no congressional oversight and no legal constraints! This crisis could have been avoided if the federal bank regulators from the treasury been doing their jobs and enforced the rules. They’ve also been telling us how great everything was going for the last couple of years. Now, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson insist they’ve got all the answers and we’re supposed to blindly “trust” them without any guarantee that their plan will even work!?
Unfortunately, this economic mess is going to severely effect the upcoming election as well. Remember what happened in the aftermath of the 1929 stock market crash? The Democrats blamed everything on Herbert Hoover and the Republicans instead of the of the financial industry that caused the problem in the first place. FDR got elected president, the American people got the “New Deal” crammed down their throats, and we’ve been fending off rampant socialism ever since! Here however, we have the Democrats' affirmative action lending policies starting the fire, and sure enough they’ll happily blame the Republican administration instead of their own failed “bright ideas”. Thanks to political correctness, and if this last ditch bailout flops as it very well might, we can soon expect to see the Mother-in-Law of all financial crashes!
According to political cartoonist Robert Ariail, the new motto at Treasury is, “From each taxpayer according to his abilities, to each investment banker according to his needs.”
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