Sirotablog

David Sirota is a political journalist and nationally syndicated newspaper columnist at Creators Syndicate. David writes about political corruption, globalization and working-class economic issues often ignored by both of America's political parties.

  • September 25, 2008 12:59 PM

    Brewsters Millions In Real Life - Except Its Billions, and Maybe Trillions

    Just to get our heads around how absurd this bailout proposal is, let's use movies as our metaphor.

    First, is the metaphor of Brewsters Millions (which, incidentally, I discussed in a recent column about political movies, and whose original story was - unsurprisingly - written during the Gilded Age). That film was hilarious because Montgomery Brewster was asked to spend $30 million in one month without accruing a single asset of value.

    Now, the political and media elite would have us believe it is possible to responsibly spend $700 billion dollars not in a month like Montgomery Brewster, but in one week, potentially without accruing a single (mortgage-backed) asset or equity stake of value. Incredibly, we are expected not to laugh hysterically, but actually think this is a serious idea.

    Just on this basis alone, how can any legislator vote for this? Do you really believe Congress can craft a bill responsibly spending $700 billion in five days? I've worked in Congress - these people can't spend that much money responsibly in a 12-month budget process. And now we are expected to believe that the smartest and shrewdest way to avert a crisis - rather than exacerbate one - is to spend $700 billion in one week? I don't care what kind of weak "oversight" or executive pay language is in there - taking less than a week to authorize the spending of 5 percent of our entire GDP is criminally irresponsible.

    Brewsters Millions was funny because it was fiction. This isn't funny at all. Anyone who votes for this bill in its current fashion is engaging in gross economic negligence that drove us into the crisis. Wall Street speculators got themselves into a mess by betting big and losing. Now political speculators in Washington are betting 5 percent of our entire economy on one spin of the roulette wheel - and will charge the loss to average taxpayers.

    Yet, Congress, the presidential campaigns and the national media are all espousing what we might call the Princess Leah message from Star Wars. "Help me Obi-Wan Kenobi, you're my only hope," Leah pleaded - and its the same thing our ruling class is saying. Help us taxpayers, bailing us out with no strings attached is the economy's only hope.

    But is it? Last I checked, the Treasury Department pushing the plan is on the record acknowledging that it made up the $700 billion number, not basing it on any data or substantive plan at all. In fact, the only substantive plan I've seen is the one put forward by James Galbraith, one of the most respected economists in the country.

    Under the heading "A Bailout We Don't Need," the University of Texas professor takes to the Washington Post today to outline an alternative economic rescue package - one that doesn't involve handing over almost a trillion dollars to the corporate campaign contributors who created this crisis in the first place.

    Here are some excerpts:

    With banks, runs occur only when depositors panic, because they fear the loan book is bad. Deposit insurance takes care of that. So why not eliminate the pointless $100,000 cap on federal deposit insurance and go take inventory? If a bank is solvent, money market funds would flow in, eliminating the need to insure those separately. If it isn't, the FDIC has the bridge bank facility to take care of that.

    Next, put half a trillion dollars into the Federal Deposit Insurance Corp. fund -- a cosmetic gesture -- and as much money into that agency and the FBI as is needed for examiners, auditors and investigators. Keep $200 billion or more in reserve, so the Treasury can recapitalize banks by buying preferred shares if necessary...Review the situation in three months, when Congress comes back...

    [The housing price crisis] could be resolved in three years, rather than 10, by a new Home Owners Loan Corp., which would rewrite mortgages, manage rental conversions and decide when vacant, degraded properties should be demolished. Set it up like a draft board in each community, under federal guidelines, and get to work...

    Reenact Richard Nixon's great idea: federal revenue sharing. States and localities should get the funds to plug their revenue gaps and maintain real public spending, per capita, for the next three to five years. Also, enact the National Infrastructure Bank, making bond revenue available in a revolving fund for capital improvements...

    Here's another problem: the wealth loss to near-retirees and the elderly from a declining stock market as things shake out. How about taking care of this, with rough justice, through a supplement to Social Security? If you need a revenue source, impose a turnover tax on stocks.

    A while back, Barack Obama listed Galbraith as one of his economic advisers. Sadly, Galbraith was left out of the emergency meeting Obama convened about the crisis. Evidently, the Illinois senator believed it was more important to have people who created the crisis like Citigroup's Bob Rubin nearby than an expert like Galbraith who has been sounding the alarm for years - and who has a rational plan to get us out of this mess.

    But just in case you actually believed Washington's Princess Leah message of desperation - that the $700 billion bailout is our only hope - think again. There are plenty of other ways to address this challenge.

    The problem, of course, is that this isn't about the American economy. It's about disaster capitalism and enriching the people who engineered this crisis to begin with. Bush (ie. Mr. 19 Percent) is the Obi-Wan Kenobi of the shock doctrine, both parties in Congress who are helping him push this bailout are akin to Darth Vader - and the circle is now complete. When those legislators capitulated to him on the Patriot Act and the Iraq War back in the post-9/11 fearmongering days, they were but the learner. Now, sadly, they are the master.

    Posted by David Sirota
    Permalink | Comments (3) | del.icio.us | digg
    Tags: wall street

Discussion

  • bluenote [TypeKey Profile Page] :

    Some people have asked, "Will the bailout prevent a crash?" to which I respond, how could it? Does it cover the $1.144 quadrillion in OTC credit derivatives the Bank of International Settlements has stated is still out there with unexposed losses and unknown counterparties? Will it reduce the trade deficit or the national debt? Will it end the war or trillions in war funding? Will it make up for trillions in unfunded liabilities? Will it bring back our outsourced manufacturing jobs; our outsourced economy? Can it significantly or meaningfully expand the economy? Will it create a significant number of new jobs? Will it pay off home owners debts? Will it hold those responsible accountable? My answer to all of these questions and more is no....and don't make me laugh.

    Like many others, including Professor Galbraith, I have warned about this for years and described what we are facing as "the correction from hell" because I cannot see any alternative to the collapse of the U.S. economy and all the ramifications of that disaster; I mean disaster for the People of course, not the ultra rich and often psychopathic subhumans who accomplished the destruction and profitted from it. In my humble opinion, the best thing the government can do at this point is nothing; the best thing they can do is step aside and let it fall. The more they/we do to "fix" it or delay the inevitable, the worse they/we make it. But that is not really the point.

    There is another consideration and I believe it may be the most important of all; we keep circling it but we don't really nail it down. Many of us have been telling people we were on a straight trajectory for economic and currency collapse because that is what thousands of years of monetary history teaches us; the fundamentals are there for us to study and learn.

    I think we need to stop beating around the Bush; If WE could see it; if we knew, then Alan Greenspan knew. Ben Bernanke knew. Hank Paulson knew and so did George Bush, Dick Cheney and various government and financial industry leaders. To them, this was NO surprise at all. These people ALL knew exactly what they were doing; this entire debacle has been carefully planned underway for about thirty years. Some people have focused on 'subprime' and said it is 'theft' but do not seem to grasp the magnitude of it.

    The majority of the People and investors are economically illiterate; living in a fog of propaganda and ideology, they fail to understand the facts of this theft; for it is indeed deliberate theft almost beyond imagining.

    What we are observing is the greatest transfer of wealth in the history of the world; the greatest heist ever conceived; delivering money and hard assets from the poor and middle class into the coffers of the wealthiest elite and the politicians they own; which is virtually ALL politicians (except Ron Paul and a handful of others) and therefore they own the laws and regulations; courts, banks; major institutions; the media and pretty much everything else.

    This robbery; this economic rape of the country, is being conducted in broad daylight right under the noses of the People being robbed. This is so much bigger then a financial 'crisis'. The financial crisis was deliberately created not only to enrich the wealthiest people in the world but to fearmonger and panic the public out of whatever they have left, ultimately creating a feudal society of debt slaves. Our government has been expanded 35% in seven years and is the country's largest single employer; the implications are staggering. We have a militarized Big Government and the Big Brother, police state, surveillance society of debt serfs all rolled into one.

    ToTim McCormack at Rude Awakening, in commenting on the bail-out, asked the question: "Are the American People gullible enough to buy it". I can only add that "buy it" should not refer only to the "bailout" but to the whole sorry mess of the deliberate destruction of this country; this Republic, its laws, economy, currency and its people; brought to ruin by a group of global elite internationalist parasites, who have essentially already moved on, and a public that simply fell asleep at the wheel.

    Posted on September 26, 2008 3:23 PM
  • bluenote [TypeKey Profile Page] :

    Some people have asked, "Will the bailout prevent a crash?" to which I respond, how could it? Does it cover the $1.144 quadrillion in OTC credit derivatives the Bank of International Settlements has stated is still out there with unexposed losses and unknown counterparties? Will it reduce the trade deficit or the national debt? Will it end the war or trillions in war funding? Will it make up for trillions in unfunded liabilities? Will it bring back our outsourced manufacturing jobs; our outsourced economy? Can it significantly or meaningfully expand the economy? Will it create a significant number of new jobs? Will it pay off home owners debts? Will it hold those responsible accountable? My answer to all of these questions and more is no....and don't make me laugh.

    Like many others, including Professor Galbraith, I have warned about this for years and described what we are facing as "the correction from hell" because I cannot see any alternative to the collapse of the U.S. economy and all the ramifications of that disaster; I mean disaster for the People of course, not the ultra rich and often psychopathic subhumans who accomplished the destruction and profitted from it. In my humble opinion, the best thing the government can do at this point is nothing; the best thing they can do is step aside and let it fall. The more they/we do to "fix" it or delay the inevitable, the worse they/we make it. But that is not really the point.

    There is another consideration and I believe it may be the most important of all; we keep circling it but we don't really nail it down. Many of us have been telling people we were on a straight trajectory for economic and currency collapse because that is what thousands of years of monetary history teaches us; the fundamentals are there for us to study and learn.

    I think we need to stop beating around the Bush; If WE could see it; if we knew, then Alan Greenspan knew. Ben Bernanke knew. Hank Paulson knew and so did George Bush, Dick Cheney and various government and financial industry leaders. To them, this was NO surprise at all. These people ALL knew exactly what they were doing; this entire debacle has been carefully planned underway for about thirty years. Some people have focused on 'subprime' and said it is 'theft' but do not seem to grasp the magnitude of it.

    The majority of the People and investors are economically illiterate; living in a fog of propaganda and ideology, they fail to understand the facts of this theft; for it is indeed deliberate theft almost beyond imagining.

    What we are observing is the greatest transfer of wealth in the history of the world; the greatest heist ever conceived; delivering money and hard assets from the poor and middle class into the coffers of the wealthiest elite and the politicians they own; which is virtually ALL politicians (except Ron Paul and a handful of others) and therefore they own the laws and regulations; courts, banks; major institutions; the media and pretty much everything else.

    This robbery; this economic rape of the country, is being conducted in broad daylight right under the noses of the People being robbed. This is so much bigger then a financial 'crisis'. The financial crisis was deliberately created not only to enrich the wealthiest people in the world but to fearmonger and panic the public out of whatever they have left, ultimately creating a feudal society of debt slaves. Our government has been expanded 35% in seven years and is the country's largest single employer; the implications are staggering. We have a militarized Big Government and the Big Brother, police state, surveillance society of debt serfs all rolled into one.

    ToTim McCormack at Rude Awakening, in commenting on the bail-out, asked the question: "Are the American People gullible enough to buy it". I can only add that "buy it" should not refer only to the "bailout" but to the whole sorry mess of the deliberate destruction of this country; this Republic, its laws, economy, currency and its people; brought to ruin by a group of global elite internationalist parasites, who have essentially already moved on, and a public that simply fell asleep at the wheel.

    Posted on September 26, 2008 3:25 PM
  • bluenote [TypeKey Profile Page] :

    Some people have asked, "Will the bailout prevent a crash?" to which I respond, how could it? Does it cover the $1.144 quadrillion in OTC credit derivatives the Bank of International Settlements has stated is still out there with unexposed losses and unknown counterparties? Will it reduce the trade deficit or the national debt? Will it end the war or trillions in war funding? Will it make up for trillions in unfunded liabilities? Will it bring back our outsourced manufacturing jobs; our outsourced economy? Can it significantly or meaningfully expand the economy? Will it create a significant number of new jobs? Will it pay off home owners debts? Will it hold those responsible accountable? My answer to all of these questions and more is no....and don't make me laugh.

    Like many others, including Professor Galbraith, I have warned about this for years and described what we are facing as "the correction from hell" because I cannot see any alternative to the collapse of the U.S. economy and all the ramifications of that disaster; I mean disaster for the People of course, not the ultra rich and often psychopathic subhumans who accomplished the destruction and profitted from it. In my humble opinion, the best thing the government can do at this point is nothing; the best thing they can do is step aside and let it fall. The more they/we do to "fix" it or delay the inevitable, the worse they/we make it. But that is not really the point.

    There is another consideration and I believe it may be the most important of all; we keep circling it but we don't really nail it down. Many of us have been telling people we were on a straight trajectory for economic and currency collapse because that is what thousands of years of monetary history teaches us; the fundamentals are there for us to study and learn.

    I think we need to stop beating around the Bush; If WE could see it; if we knew, then Alan Greenspan knew. Ben Bernanke knew. Hank Paulson knew and so did George Bush, Dick Cheney and various government and financial industry leaders. To them, this was NO surprise at all. These people ALL knew exactly what they were doing; this entire debacle has been carefully planned underway for about thirty years. Some people have focused on 'subprime' and said it is 'theft' but do not seem to grasp the magnitude of it.

    The majority of the People and investors are economically illiterate; living in a fog of propaganda and ideology, they fail to understand the facts of this theft; for it is indeed deliberate theft almost beyond imagining.

    What we are observing is the greatest transfer of wealth in the history of the world; the greatest heist ever conceived; delivering money and hard assets from the poor and middle class into the coffers of the wealthiest elite and the politicians they own; which is virtually ALL politicians (except Ron Paul and a handful of others) and therefore they own the laws and regulations; courts, banks; major institutions; the media and pretty much everything else.

    This robbery; this economic rape of the country, is being conducted in broad daylight right under the noses of the People being robbed. This is so much bigger then a financial 'crisis'. The financial crisis was deliberately created not only to enrich the wealthiest people in the world but to fearmonger and panic the public out of whatever they have left, ultimately creating a feudal society of debt slaves. Our government has been expanded 35% in seven years and is the country's largest single employer; the implications are staggering. We have a militarized Big Government and the Big Brother, police state, surveillance society of debt serfs all rolled into one.

    ToTim McCormack at Rude Awakening, in commenting on the bail-out, asked the question: "Are the American People gullible enough to buy it". I can only add that "buy it" should not refer only to the "bailout" but to the whole sorry mess of the deliberate destruction of this country; this Republic, its laws, economy, currency and its people; brought to ruin by a group of global elite internationalist parasites, who have essentially already moved on, and a public that simply fell asleep at the wheel.

    Posted on September 26, 2008 3:25 PM

Join the Discussion

Post a comment