Tuesday, April 7, 2009

OMG! A Libertarian in San Francisco?

You gotta read this.  Great stuff.

Crazy thing is, it is from the San Francisco Chronicle.  A liberal newspaper from America's most liberal city.  It opens with a throw away line to their liberal readership... but then it goes on to criticize Obama for carrying out the exact same policies as GWB.

by Sean Olender
President Obama must stop the bailouts and start the prosecutions. It's time to focus on anti-poverty programs to protect the growing unemployed from hunger and homelessness. Stealth payments to billionaire bondholders must cease immediately.

Since the mid-1970s, average Americans' wages have stayed flat when adjusted for inflation. Productivity rose, profits rose, but not wages. To compensate for stagnant wages and the desire to consume more each year, Americans worked more, retired later, spouses went to work, and many burned savings. Then they started borrowing. Debt became America's growth industry.

The scheme collapsed because Americans' wages weren't sufficient to pay the interest on existing debts. The only way out of this is to tighten our belts and pay down debt, the opposite of what our bank-owned government is advising.

Can you believe that? That is stunningly factual and accurate.

The administration and the banks keep talking about a credit crisis, but there isn't one. Banks are lending. If you want a mortgage and can afford to pay it back, you can borrow at low rates today. You can finance a car at low rates for seven years. But most Americans don't want more debt because it is a debilitating path to poverty. The average American family already pays 14 percent of annual income in interest to banks.

To fix this fake crisis, there are fake discussions about what the government must do. The endlessly recycled plan to buy "troubled" assets isn't to get banks lending again, because they haven't stopped lending. The plan seeks for taxpayers to buy worthless assets at high prices to absorb rich investors' losses. That's it. It keeps coming back as a different plan, but with that same goal. There is no goal beyond that one goal: keep rich people from taking losses.

Obama and his economic gurus all chant, "Credit is the lifeblood of the economy," but they don't mean credit. They mean debt. Imagine the president saying, "Debt is the lifeblood of our economy. We desperately need to get more American families deeper in debt." That's what he means, and that's what these bailouts hope to do.

Does the concept in that last line sound familiar? It should, I have been pounding away at that for some time - that a Liberal, Democrat President would extol his constituents to go further into debt.

In a Sept. 14 article in this newspaper, I noted that banks push senators, with the blessing of the administration, to introduce bills that are bailouts, but disguised to appear not to be bailouts. The goal is to accomplish the desired result without risking your bought-and-paid-for representative.

Imagine you bet $500,000 on a stock and it dropped to $20,000. If you owned Treasury Secretary Tim Geithner, he'd get on TV and explain that if the government didn't buy your shares for $500,000, the economy would suffer because you couldn't invest anymore. He'd say the "free market" isn't pricing the stock "right," and we have to "help" the market with taxpayer money to make sure you get the "right" price.

Bailout psychology is destroying the economy. Banks hold off on foreclosures in the hope of refinancing borrowers into government-backed loans that will almost certainly default - at taxpayer expense. I've talked to ordinary people delinquent on credit cards who put off bankruptcy because they "heard" the president was unhappy with unfair bank practices and "help was coming soon." Millions of homeowners desperate to sell are keeping empty houses off the market waiting for a "rebound," flushing a stream of income down the toilet.

"Bailout psychology is destroying the economy"??!!! Is this really the San Fran Chronicle?

Worsening economic figures are being used to confirm that more bailouts are needed rather than that previous ones might be failing. The logic is much like medieval blood letting: The patient died because we didn't drain enough of his blood.

The promise of more bailouts also keeps everyone from doing what's necessary. Millions of houses sit empty, open to vandalism and destruction, while millions of Americans live in cars or on the street. Our tax money is given to banks and speculators to hold houses empty.

"The promise of more bailouts also keeps everyone from doing what's necessary." You mean like "free" healthcare, lifetime pensions, and other silly government promises of freebies?

On March 20, 2007, I wrote here that a mortgage bailout was coming and would cost at least $1 trillion, yet not bail out homeowners. As it turned out, the bailout did nothing to stop foreclosures from going through the roof. On Feb. 8, 2008, I wrote here that Fannie and Freddie would be taken into receivership within a year - an event that occurred Sept. 7. I argued here on Sept. 18 that most loan modifications were a fraud and "I optimistically predict that within 12 months half of these refinanced loans will result in default." On Dec. 8, the Office of the Comptroller of the Currency announced that 53 percent of modified loans were in default.

To "fix" all these problems, the George W. Bush administration, and now the Obama administration, have chosen people (or their accomplices) who stole from the public. That's why no one has been prosecuted. Would former Treasury Secretary and Goldman Sachs chief Henry Paulson have pressured for an investigation of Goldman Sachs? Right.

As president of the Federal Reserve Bank of New York, current Treasury Secretary Geithner had a front-row seat during the run-up to the crisis and watched for years while pushing a "no regulation" policy. Why? At that time his friends were winning their bets and making a lot of money.

Why didn't Bush or Obama pick Brooksley Born (the Commodity Futures Trading Commission chair who tried to regulate credit default swaps) or Harry Markopolos (the whistle-blower in the Madoff scandal) to serve as treasury secretary or chairman of the SEC? Because Born and Markopolos are technically competent and possess integrity. Banks would tolerate neither quality in an administration official.

We have a crisis of confidence, because fraud permeates most of our banks and financial institutions. The solution is law enforcement, not handouts. On Jan. 31, 2009, Santa Barbara police held a 53-year-old homeless man on $20,000 bail for shoplifting $7.69 worth of soup and bread. Yet Bush did not move to prosecute a single executive at any of these banks, and Obama likewise doesn't want to be "vengeful" by investigating the crimes of investment bankers.

If the government feels lenient, can't it let alone families campingin a vacant lot in Sacramento, or homeless people stealing bread?

We can stop this by closing our accounts at any bank that took government money. A list is on the Treasury's Web site. Close your accounts and move them. If we do, those banks will suffer receivership or bankruptcy within a few months, and then there will be no need for bailouts. Our healthy community banks will thrive, while billionaire bondholders will have to downsize their G-5 fleets and take a haircut.

The piece is loaded with Libertarian/Free Market concepts and subtleties and is critical of Barak Obama. I have this vision of a "Jerry McGuire" moment when this guy gets fired for speaking too clearly.

Lastly, it is not so much Obama that I am critical of.  It is his supporters - the nit-wits that believed the stuff he, and they, were saying during the campaign...  pure horse s**t, but the true believers practically wrote his name across the sky.  What kind of a curmudgeon would I be if I didn't smack them around for a while?

Mentatt (at) yahoo (d0t) com


oOOo said...

Most of the documentary is annoying and pointless, but 'the Obama deception' also makes all of these points along with loads of rubbish filler. The strongest part of the documentary is the cover:

Grant said...

Help me out here...

Isn't it BECAUSE of the bailouts that you can get a low-interest loan today? My understanding is that without the bailouts NOBODY could get loans.

So maybe Geithner et al are not the crooks you allege them to be, but just trying to make the best of a horrible situtation.

Anonymous said...

Geithner, Paulson, Bernacke and Greenspan saw all this coming years ago. Promises were made before the bubble burst and they are being kept. Don't think for a minute that the banks kept all these liar's loans without being promised that they would be made whole when things blew up. Does anyone really believe that the loans were "packaged" so that the banks didn't know what they owned? Does anyone really think that Fannie and Freddie underwrote $trillions of this garbage paper without knowing what it was? Does anyone believe that Barney Frank and Phil Graham, who oversee this mess in the Senate, had no idea what was going on before the bubble burst? Things just don't work that way. These people aren't that stupid. Nobody EVER EVER EVER buys a billion dollars of anything without knowing what they bought.

Let the prosecutions begin, but be sure that every banker has an equally culpable counterpart in government.


Coal Guy

Greg T. Jeffers said...

I NEVER said they were crooks - quite the contrary - these people are without venality and are trying to do their best in a terrible situation.

That does not mean one should take them at their word (when speaking at the microphone)

Heck, Geitner's plan might even "work" depending on your definition.

I was only pointing out that someone besides me says that "DEBT" not "CREDIT" is the life blood of our system... we can even argue the merits of that system... but in the mean time, I am just calling em as I see them in my never ending rant.

bureaucrat said...

I have yet to test whether the banks are still lending, albeit to "good risks." While I have the more-or-less-guaranteed Federal high salary, a credit score over 800, and probably would get a "hello" from the local Harris bank manager, I also have $450,000 in mortgage debt and some credit card charges. Frankly, I don't want Harris to even know I'm alive. Once you start to "inquire," the computers start analyzing your financial life. I'd like to think I could borrow more, as I am a good risk, I think, but I don't know just how much money is really getting loaned out overall. If it were, why are house and car prices still falling? The banks have every excuse NOT to lend to average people.

sharon said...

thanks for the link...

Entertainment at one stop