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Finding a Way Out After the Bailout

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Posted on Oct 15, 2008
Bank Crisis
AP photo / Mary Altaffer

The Dow Jones news ticker is reflected on a window at NASDAQ, in New York’s Times Square, just before the closing bell on Monday, Oct. 6.

By Titus Levi

The argument over the health of financial markets has careened across the economic tarmac like a car driven by a drunk. The shouting and wailing reached a fever pitch after two of the five big investment houses—Lehman Brothers and Merrill Lynch—collapsed in a span of only two days, and before anyone could catch his breath, insurance giant AIG had to be bailed out by the Federal Reserve. Something had to be done, and quickly.

Secretary of the Treasury Henry Paulson and his advisers crafted a $700-billion bailout plan by the end of the week, and on Monday, Sept. 29, the U.S. House of Representatives told them to get stuffed. In response, the stock market abruptly tanked, falling by 778 points. Then, the House leadership promptly changed direction again by playing Monty Hall and hammering out a bailout deal, spiced with $150 billion in pork, that passed on the following Friday. Everyone breathed a big sigh of relief and thought that all was well in Mudville.

Not so.

Wall Street swerved wildly once again on Monday, Oct. 6, shedding about 800 points at one point, before rebounding to close at 9,962.03, or down 3.5 percent for the day. The rest of the week followed the same pattern: up, down, up, down … but mostly down. By the end of the week, the Dow Jones Industrial Average had settled in at 8451.19.

Clearly, traders have yet to feel confident. Why? Two problems. One we already know: The “plan,” even with revisions, is deeply flawed. The second problem has not been mentioned all that much because it’s pretty scary: Put simply, we have no idea what we’re doing.

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We don’t know what we’re doing for two reasons. First, this crisis is unprecedented in its scale, scope and type. It’s not a 1929 collapse, it’s not a 1987-type slide and it’s not the S&L scandal of the 1980s. Elements of each can be found in the current turmoil, but this brew has new ingredients; because it grew out of thousands of shaky loans, which then were bundled into tradable securities, and then sold hither and yon, its roots are far more extensive than anything we’ve seen before. Moreover, it’s larger than either of the 1980s economic stumbles. So far it’s evolving more slowly than the 1929 Crash. And now, to make matters worse, foreign markets have caught the contagion. In this case, misery would have been far happier without company.

The second reason relates to the first. The bad loans at the base of the matter have not really been accounted for; that is, we don’t know how many there are, how bad they are, how much we might be able to recover from them, how extensively they have insinuated themselves into the financial sector. Unless and until we figure all this out, we’re flying blind. We’re guessing. So whatever you hear from Hank Paulson, his new lieutenant in charge of crisis management, Neel Kashkari , anyone in Congress, or any other commentator for that matter (even me), be sure to take it with a grain of salt. Maybe a fistful.

In the wake of the full-on takeovers of Freddie Mac, Fannie Mae, IndyMac and AIG, the situation may begin to change. We now have access to records and data at the granular level needed to assess what happened and, as important, where we really stand now. Having this information under public control, where it can be shared and circulated, increases its value by getting it into as many of the right hands as possible. This aspect of the Freddie and Fannie takeovers has yet to be reported on in any meaningful way in the financial or mainstream press. 

Keep in mind that other takeovers—Bank of America’s buyout of Countrywide and Merrill Lynch, Wells Fargo’s just-approved buyout of Wachovia, and JP Morgan’s purchase of Bear Stearns and WaMu—do not yield a body of data that will be shared. It’s all proprietary. Whatever we learn about how bad things are in these cases will come indirectly through business maneuvers, or through legal means, as with the agreement that B of A brokered with 11 states, including California, Illinois and Florida, in a settlement over deceptive mortgage practices at Countrywide, which B of A bought in June.

Even though the feds have access to good information now, it doesn’t mean that the way out of this mess will emerge straightaway. This is a gigantic amount of information to parse, and making sense of it will be hard. Moreover, the government currently lacks the capacity to assimilate this much information and to figure out what to do with it. However, Washington must somehow develop the capacity to dig through the information, organize it coherently, begin to develop sound, useful analyses based on what is uncovered, and then use these analyses to craft policies that bring relief to those in distress. Failure to do so will mean that we will continue to fly in a fog, seizing on ideas and “solutions” willy-nilly without a comprehensive view of the problem at hand and how to address it. This kind of cavalier approach to policy-making landed us in hot water in the first place. It cannot help to extract us. 

 


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By bc41, October 19, 2008 at 10:12 pm Link to this comment

Today, the government fears banks are too low on cash and bails them out to encourage private investors to continue to invest in all things.  The lost investment is the devauled real estate that was held in trust (so to speak) and owned in stock.  The idea is, once you get the money rolling again, not making it worse, then the government might focus on reducing the number of houses going vacant and up for sale, that lower values also. It’s like a treadmill, keep things moving and try to tweak the problems as they see them.
  Lending companies made quick loans for the up-front loan fees—they were cranking them out fast—then sold the loans to companies that were getting money from eager investors in stock.  The big draw in stock was the guaranteed 6% interest, many of the investors were foreign.  There was no one checking up on lenders, and they fudged on the paper work, greedy or feared losing their livelihood in the expected recession and it was widespread, chic even.  And when AIG got involved, largest insurance company in the world, I’m guessing that changed the picture even more as then the stock was insured: think that was a majorturning point. That’s my spin on it.

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By elizabethe, October 19, 2008 at 7:08 pm Link to this comment

RED INK and GOVERNMENT BAILOUTS with improper use of “unreal” money is not how to fix anything. 

Greed and corruption upheld is never going to deliver good government.

If Nader is elected by a majority who wants his honorable principles in place and the U.S. Constitution upheld and the resulting trustworthiness of this nation restored, then, maybe I can refocus to earning my own living (right now I am obsessed with making people know A-the majority of voters are registered outside the two parties; and B-SIX are on the ballot and proper merit competition should net the BEST as each individuals’ voted true opinion on an individual level of honest responsibility aiming to deliver genuine democracy…study all six and then decide who is best:  Baldwin, Constitutional Party; Barr, Libertarian party; McCain, Republican party, McKinney, Green Party, Nader, Independent Candidate, and Obama, Democrat Party.

I believe while it is true, the word and deed go hand in hand, ACTIONS SPEAK THE LOUDEST.

Which candidates has shown ACTIONS for a Nation on Track.  Smooth promises are the ugly reputation of politics as usual.  We do not want that, we want a reality check!

Vote for who can and will deliver what you want for a national agenda and PUT AMERICA ON TRACK.

I believe the two senators have done nothing to earn a presidential candidacy let alone a majority vote.  There are four challengers, and I believe one of them is the best.

You decide, there are SIX and the majority is outside at a registered level, free to choose, if they do the homework instead of listening to the media.

Baldwin,
Barr,
McCain
McKinney
Nader
Obama

This is the slate, and you the voter owe your country a PRESIDENT that will net America on Track at the BEST PROPER LEVEL.

The U.S. Constitution UPHELD for the OFFICE OF PRESIDENT does not make war, he leads a government for the people with priorities for the people (ONLY) and respects the country’s sovereignty with a budget in the black and that leads the world to have its freedom.

RED INK is only that when offered as an agenda.

Try voting for the proper priorities in place.

Healthcare paid by taxes?  the two parties are NOT offering that. Example of smooth talk…they do say universal healthcare, but they do not intend actual delivery.  They are more than a waste of time, they are for profit against the people, it is not proper government or on track.

Bush in office and the two senators who have not tried to impeach…they support everything with smiles, and it is the same as the bailout, red ink, deficit in your face, they do not want democracy on November 4th.  They love the corporate corrupt two choices as their monopoly, it is a lie.

There are SIX.

You are the voter and still have the power to rule.

If you vote the best, and the majority also does, what will happen?

Status quo or change?

A country on track and Iraqis with freedom?

Budget priorities where they belong…no military increases when there is already a 9 trillion deficit and increased offered by both supposedly major parties.  they are NOT “major” they are 38% combined.

The PEOPLE rule at a registered voter status regarding party.

You do not elect a party, you elect a President.

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By KDelphi, October 19, 2008 at 9:12 am Link to this comment

cyrena—yes..And, there WERE environmental and labor “protections” in there—they just were unenforced (unenforceable? I’m always skepticle that this really means “we dont feel like it”).

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By Dr. Knowitall, PhD, PhD, October 19, 2008 at 5:36 am Link to this comment

Cyrena, my one criterion for my house on wheels is that it accommodate my four ‘dogs cause I’m going nowhere without them.  Two of them I’ll have to help into it.  We’ve seen two other dogs through their lives, my wife and I together.  It’s heart wrenching, of course, the loss, but the great memories are bountiful as you have said and help offset the pain. 

I know you’ll have another four-legged pal before too long. 

It’s interesting, isn’t it, that political parties use animals as mascots, when animals don’t have a greedy, dishonest bone in their body.  I think Bush might make an apt mascot for the Republican party for decades to come.  Retire the elephant and put it in therapy so it can get over all those years of abuse and exploitation.  Not just being associated with Republicans but also being cramped up “in the room” that’s always way too small for it and still being completely disregarded and unacknowledged by those in the room with it.  That has to do a number on one’s psyche.

Maybe Palin would make a good mascot.

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By Fahrenheit 451, October 19, 2008 at 2:47 am Link to this comment

The looming failure/collapse of the credit card market hasn’t even hit yet.  This whole thing is going down like a standing row of dominoes and it’s happening in slow motion.  There’s no pilot in the cockpit.  The only ones who seem to understand are Krugman and Roubini.  Heres a link to Roubini’s web site;

http://www.rgemonitor.com/index.php

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By cyrena, October 18, 2008 at 10:58 pm Link to this comment

1 of 2
KDelphi

In all fairness and honesty, you are certainly NOT the only one who believed the claims of NAFTA. Rest assured that for anyone even paying attention, (and most folks weren’t) the real results weren’t so easily imagined by most, because it wasn’t packaged that way. AND, if we wanted to engage in a little hindsight, we could even go so far as to say that it didn’t HAVE to turn out the way that it did. In fact, it was only because of the deregulation that had already been orchestrated, (beginning with Regan, and continuing with Bush I and then on into the Clinton Admin) that the basic concept failed us ALL so miserably. So it was instituted with ZERO protections from corporate greed and what is now clearly fascism. Whatever laws WERE in place to protect not just the workers, but the market itself, (from monopoly) were full of loopholes and consistently manipulated by the likes of people like Phil Gramm, though he certainly wasn’t alone in this. It became the Republican Way. Again in all honesty, I don’t even know that Clinton himself was aware of the future ramifications, other than to say that he was *smart* enough to be aware!

This is part of the argument that I’ve been having with the Naderites, who are consistently living in a past that even then, was a bubble or an illusion. Nader recently said, (and Outraged quoted him) that anti-trust laws that govern the MARKET PLACE would prevent the monopoly of the political system. That’s bullshit, because those laws are worthless even in the market place, and they have been for decades. My former employer has been guilty of anti-trust in the market place for decades, and with impunity. Their corporate lawyers are *dedicated* to ramming mac trucks through the letter and the spirit of the law, and they get away with it.

Be that as it may, the ONLY reason that I was aware, was because I was already being affected by at least one of the major elements of the whole cancer, (not personally, but as part of the corporate worker group) which was the outsourcing. The whole concept of the outsourcing actually began on the domestic front, long before NAFTA was actually instituted, or at least they all sort of evolved at the same time. Over time, more and more functions previously performed by ‘company’ employees were contracted out. The first to go were the skycaps. Instead of hiring them into the system as the Airline’s employees, they were obtained from a contracting source. (like an employment agency). These employees worked side-by-side with the airline employees, doing the exact same job, wearing the exact same uniform, etc, etc, etc. But, they earned less, and had none of the benefits provided by the airline to its own employees. They had to pay for their own parking, their own uniforms, and they had no medical, dental, sick time, or ANYTHING. Besides that, they generally worked at minimum or below minimum wage in some states. (contracting agencies varied from location to location).

Then it was the security screeners, and then the caterers, and then the fuelers, and on and on, until more and more of entire departments were ‘outsourced’. At the same time, they had instituted wage-tier plans, even for those who were hired by the airline itself. As newer workers were brought in, (even for the unionized positions) they were relegated to a differently structured pay scale that would never allow them to reach the maximum wage that current workers, (hired prior to X date) would earn. Of course the plan was that the higher paid workers would retire or die off, and that old higher paid tier would be replaced with the lower paid workers via that attrition. Eventually, they even came up with a 3rd tier that lowered the wages even more.

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By cyrena, October 18, 2008 at 10:57 pm Link to this comment

2 of 2
All along, they would meet with the occasional resistance from the unionized groups in the form of threatened worker strikes. But for the most part, the same intimidation that worked to PREVENT more unionization worked to make such threats basically meaningless. Eventually they would ‘settle’ for the same reasons that you mentioned about your own attempts back in your experience. People were afraid of losing their jobs, and only the strongest of the unions had enough of a ‘treasure chest’ to see their workers through any type of long term unemployment. Most workers simply can’t afford it.

Even those willing to tuff it out have more than principle and ideology to consider when they have others depending on them. (like kids). And in my industry, (unlike others that employ primarily professionals needing certification) we really had only a few work groups that couldn’t easily be replaced by scabs. The pilots, dispatchers and mechanics all need federal certification/training, so they aren’t as easily replaced. That is unless you cause another airline here and there to go belly up by perpetrating anti-trust practices, and then you wind up with a whole shit load of unemployed pilots/mechanics/dispatchers looking for work. I swear to yahoodi, and I’d bet money I don’t have, that my former employer timed such events to occur when these work groups were likely to do a work/strike action. In other words, “Don’t like it? We’ve got a whole bunch of folks ready to put on your uniforms and pick up your kit bags. Even got new time cards for ‘em all set up.” I think it’s a form of extortion/exploitation by corporate mobsters.

Anyway, that whole ‘phenomena’ is part and parcel of what NAFTA has been on the international scale. But it could have been avoided with more regulation and oversight. It’s not because trade itself is a bad thing. The market and our own existences depend on it. We simply don’t have ALL of the resources that we need, just like other locations on the globe don’t have all that they need. But without protections and some regulations on the whole thing, for ALL workers, it becomes the exploitation of many, by a few, and NO ONE is held accountable. 

This was the entire reason for the destruction of Iraq, even though it wasn’t anticipated (by Cheney et al) to take this long to force their means of production on the Iraqis to steal their oil. There was NEVER a reason not to simply PAY the Iraqis for their oil, but that’s not how fascist operatives work. 

Dr. Know, thanks for the post from a fellow dog lover. (you too KDelphi). My own favorite girl and best friend did pass on 2 ½ years ago, but my decision to put her over the mortgage gave her and us another 7 years. I miss her terribly, but I know I would never have made it though those particular hard times without her, even though it was a struggle to keep her with me. Actually, that decision probably resulted in what I’ve since come to think of as a blessing in disguise. I don’t know that I would have decided to leave TX and return home, had that series of seemingly unfortunate events NOT taken place. And for that much, I am eternally grateful.

I haven’t gotten another one yet, just because I’m hardly able to take care of myself. I actually do see a few of the community homeless folks from time to time, WITH their dogs, and I figure the dogs are probably fine ‘in the elements’. But, I’m not quite prepared for that myself, so finding accommodations for me is just easier without anyone other than myself to beg on behalf of. (even that is hard enough)

Meantime, I’m just holding out with the hope that I hold up long enough to save up a few of these paltry Soc Sec disbursements. That and a miracle would provide for a portable living space. Then I can consider some new 4-legged companionship, and we’ll join the rest of the growing trailer crowd.

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By steven daniel, October 18, 2008 at 12:34 pm Link to this comment
(Unregistered commenter)

Before there was toxic banking, Bear Stearns, Lehman Bros. or Fannie and Freddie, there was one of the greatest scams and masquerades of all time.  It was the unbelieveable Lloyd, Carr swindle and scandal (only people in Boston will recall this) and it has been compressed into a novel, an incredible, fact-is-stranger-than-fiction novel, a truly Bakhtinian masterpiece, called SCAMMING GOD.  It starts out as a very simple love story, in which a young woman gets knocked up by a con man, then gets even… but it spirals up into the ideological debate of the last thirty years.  You can get a hold of it through Amazon, Xlibris, Booksurge or morganibarra.com

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By KDelphi, October 18, 2008 at 8:34 am Link to this comment

Interesting posts, for sure!

Dr, Know—Yes…and , credit card rates are going up ask we speak. The Congress need to do something about it, now that we are paying all the “banks” bills. Overturning the Bankruptcy Bill is necessary, as, at least half of all bankruptcies are for unpaid (unpayable) medical bils.Ohio finally has a “payday Lender” bill on teh ballot (they are charging 370%), but I keep getting robo-calls that it wil cost “good jobs”—yeah, like working in a payday lender set up is a “good ” job. The State of OHio need to do somethig so that they can get better jobs.

cyrena & anybody—I have to admit to a couple things—I fell for Clinton’s ideas on two things—NAFTA was going to make Mexico better off and, not hurt the US worker at all. Oh well..Another one was “de-institutionalization”—actually, that started under Reagan, and continued. I still believe in the concept. I just did not realize (or believe ) that it meant that peopel would go from old, torn down institutions to the STREET!

Unions have been being gutted by big busines and gOP/collaborators for decades. Reagan’s Taft Hartley Act rip-off on air traffic controllers was one sorry thing to see.When I worked for county adn state govts., we had attempts to unionize, and, every time, they would send in union-busting attornies. The mgmt. would cry about “our relationsips with the teams!” and everyone would fall for it. Harold and i kmew better, and we would beg people to not attend the union buster mtg. They were afraid of losing their jobs.

I love animals/pets. My family always had them—my mom, loved them to the exclusion of people towards the end. At one poont , on a big ole farm we rented, we had : 13 cats (kittens—we’d spay them and more kept coming and being dumped off), 5 baby rabbits—wild—we fed them milk, a dumbas hunter (hunting illegally—we had signs posted) killed the mother and brought us a handful of newborns—of course, my dad let us keep them—4 lived and we put back in the wild); 5 tame rabbits (litters), 3 goldfish, 2 turtles, one parakeet, one hamster, snd 5 dogs (a litter, with the collie father, that a guy dropped off “on the way to the pound”—sure—he just knew we woudl make my dad keep them). Also, 3 horses.

I spent $1200 trying to save my lsat dwarf bunny, and I haven gotten one since. (I got the last one because a friend dropped if off—she said, you need pets 00OH NO!) I was going to “return it”—sure. It is because i have, basically, no yard, and I cant stand to watch little house pets like bunnies suffer, and, shove medicine down their throat,—but they are smarter than you think! The last one was litterbox trained, batted a ball around with you. Now, I miss him.!!

But I can fully understand pets.

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By Dr. Knowitall, PhD, PhD, October 18, 2008 at 7:53 am Link to this comment

Thanks, Fahrenheit451,

And I yours.  Actually, from what I gather from your posts, I think we find ourselves in some similar places in our lives, demographically as well as ideologically. 

I do recall, I think, that you have kind of written off our political system.  I was there, then I tried to find hope in Obama’s campaign and put a lot of faith in that.  I have also decided that it’s extremely difficult for principled people to work within our political system because of the way it’s built.  But it might still be one of the best systems there is. I’ve evolved during this campaign into a “small gains” advocate.  This Wall St. crash has given me new hope that better days may be ahead for the middle class and I believe Obama may be a “closet” middle classer.  I think he’s a very good person, despite naysayer rhetoric.  I’ve been very impressed with the campaign he’s run.  It may speak to his governing style.  With a dem majority in congress we may actually see some of those those small gains.  I think we have to have hope.

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By Fahrenheit 451, October 18, 2008 at 5:15 am Link to this comment

@ Dr. Knowitall, PhD, PhD;

I’ve always enjoyed your posts; but never more than this one.  You’ve outdone yourself!  I also would gladly pay you tomorrow for a hamburger today.  Cheers!

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By Dr. Knowitall, PhD, PhD, October 18, 2008 at 3:52 am Link to this comment

Just out of curiosity, because I quoted a Wimpy line in my last post, one I drew from my memory, I googled Wimpy and found yet another applicable line.

Wall St. to the Government:  “We’d like to invite you to a duck dinner.  You bring the ducks.”

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By Dr. Knowitall, PhD, PhD, October 18, 2008 at 3:44 am Link to this comment

Cyrena, I meant to head my previous comment to you, having enjoyed yours.  Aren’t dogs the very best.  I have four of them myself, and they’re putting me into the poorhouse, but at least we’ll go there together.

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By Dr. Knowitall, PhD, PhD, October 18, 2008 at 3:36 am Link to this comment

With debt considerably on my mind, I had a chance to think more about this through the night. 

It apparently was little to nothing at all for our government to sign taxpayers on to guarantees for yet another trillion dollars to prop up confidence in our greedy, corrupt, irresponsible banking system.  Now our government is considering reform.

Banks, in the name of unsecured lending, have been able to tuck it to credit card holders who may have come up a little late or a little short.  In many cases commiting usury.  My sense is that we’ve only seen the beginning of defaults on credit card debt.
The whole system, created to make it possible for anyone to get what he wanted by paying for it later, thereby causing a giant bubble in consumerism, has backfired on banks and on the government and on our economy.  It was long ago pretty apparent to little ol’ me that getting something from a business without paying for it could only go on for a limited time. I think they call it “being tapped out on credit card debt.” 

Quite possibly, the only way to bring sanity back to borrowing and lending is for individuals, like big banking and Wall Street, to simply default and let the government figure a way to deal with the crisis.  If, in the end, we taxpayers are going to bear the brunt of the Wall St. “realignment” anyway,  then it seems only fair that individual credit card debt be part of that realignment.  Everyone, Wall St. and individuals get the chance to start over with a clean slate and we head off together into the sunset, hand-in-hand, happy to be alive, and learning from our mistakes—like Wall Street and the government. 

Banks will never again be allowed to lure people into contracting debt they can’t afford—especially when we get an administration in DC that ultimately kills the individual’s ability to pay—and then insult them with 29% interest rates when they can’t pay.  And, never again will consumerism be so artificially ballooned by applying our own government’s policy to individuals, i.e., “I’ll gladly pay you Tues. for a hamburger today.” 

Just how long did the country and the world think this could go on?  Of course, if you’re one of the 5% wealthiest, many of whom dictate economic policy, you don’t really care. 

I think it just might be an individual’s patriotic responsibility to all other middle and under class workers to just stop paying as a means to right this country’s economy.

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By Alan, October 17, 2008 at 10:32 pm Link to this comment
(Unregistered commenter)

The take home lesson is, well yes, the take home lesson,
not the take out lesson, the take out lesson is
finger lickin’ good, but ultimately unsatisfying,
the take home lesson is that no candidate or ‘‘representative’’ is dealing honestly with what faces us: widespread poverty, environmental collapse (rather more important an issue than Wall Street), the emergence of true a-i and its consequences. 
Somebody will be inaugurated,
hopefully Obama, but no issues will be addressed and no problems
will be solved.  Hot sauce with those fries?

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By cyrena, October 17, 2008 at 9:39 pm Link to this comment

•  “If you want to retire comfortably [not rich] work where you get a guaranteed UNION pension. That and SocSec will probably keep you eating, and maybe a roof over your head.”
~~
Xntrk…

The UNION pensions have pretty much ceased to exist. They were certainly good while they lasted, but most folks these days have forgotten the hard ass fights of the labor movement that brought them UNIONS and 8 hour work days, with 2 days off in a week, along with paid holidays, and sick time, and all of that.

And, over the past few decades, they’ve pretty much petered out. My Grandma managed on a railroad pension, but after nearly 30 years in the related industry, I had no Union to fall back on. My own particular work group attempted to unionize many times over the years, but it never happened. By the time I switched over to a position that was in fact unionized, (aircraft flight dispatchers) they were basically toothless. Regan pretty much set the stage for that when he busted up the Air Controllers Federal Union, and things went downhill from there. More and more corporations moved their operations and headquarters to states with ‘right to work’ laws, and what that essentially means is that they have the ‘right to fire’ anybody, for any reason, (or no reason) at any time. Those employees who were unionized (in my industry it was flight attendants, pilots, dispatchers and mechanics) had *slightly* better protection, but not much. When the companies went into their ‘downsizing’ modes, (which was whenever they wanted to) or filed bankruptcy and reopened the next day under a new format, ALL employees either took the 50% cuts in pay and benefits or were easily replaced with others who would work for nothing.

And, don’t let there be a so-called ‘national emergency’ or anything that was termed ‘off-schedules operations’ because all rules/protections went out the door then as well. The airline industry shed up to a quarter of a million workers beginning in the months immediately after 9/11, and that continued for a while, DESPITE the fact that the tax payers bailed them out – TWICE! A few got some severance pay, but most got nothing, and they sure didn’t get any pension or other benefits.

Most unions have had the life squeezed out of them, (they are a corporations worst nightmare, and NAFTA just made them all go plum damn crazy with greed) and the few remaining have don’t have any real teeth. My daughter’s father has managed to hang in there and will reach mandatory retirement age (at least for pilots) in a few years. But, I doubt seriously if the professional union will offer up much of a pension, if any. Soc. Sec is the only thing to count on, and we don’t know how long THAT will be around, especially if the repugs have their way in these long term efforts to privatize it. My former corp. has been pushing that for at least 15 years now, encouraging newer workers to invest in the market in lieu of paying into the soc. Sec. system. We see how well that HASN’T worked out. Hundreds of thousands have lost everything.

The market was never the place for ordinary people to mess around anyway. And if you think about it, ordinary folks/workers *didn’t* invest their life savings in the stock market, which was basically the territory of the wealthy. But, this culture of greed/consumerism and get rich quick scheming has built up over the past few decades, and now it’s left a whole bunch of folks high and dry.

The perpetrators of this Ponzi scheme HAD to know it would crash, and didn’t care. Even *I* knew that the outsourcing of NAFTA was gonna be the death of us way back in the 80’s, because one doesn’t need a doctorate in economics to understand that when you send out all of the work, and pay workers less and less, they aren’t gonna be able to afford to buy whatever product or service it is you’re selling. And if the average worker can’t, neither can anyone else.

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By cyrena, October 17, 2008 at 7:13 pm Link to this comment

By Dr. Knowitall, PhD, PhD, October 17 at 4:07 pm #


“..Whaddaya think would happen if everyone with any kind of debt, a mortgage, car loan or credit card balance simply stopped paying it out of protest of the Big Rescue Bill?

The banks are already reaping huge subsidies for “bad debt.” Why not be a part?”

~~~

I used to wonder this myself, back in the days of anguish before I finally didn’t come up with the mortgage for two months. (spent it all on the dog, who had to be treated for heartworm). We both wound up homeless of course, but it was worth it. Even if I hadn’t spent the money on her instead, it was only a matter of time.

But, I did used to wonder what would happen, as she and I took our nightly walks through the old ‘hood. I figured that if EVERYBODY ran out of jobs and money, and couldn’t pay their mortgages, then we’d all just stay where we were. I mean, they’d need a whole lot of marshals to throw people out of all of their homes. ( Pretty naive eh?) That’s EXACTLY what proceeded to happen 7 years later, and continues now.


Still, at what point does it just get to be too much hassle to throw everybody out on the street, and employ rent-a-cops to ‘guard’ empty houses? Who’s gonna buy ‘em? (except us, since we’re footing the bail out, which means we’re paying for them anyway). I guess it would be easier to repossess a few million cars, but then…what to do with them? (I still want an RV or similar home on wheels).


As for the credit card debt, what are they gonna do if you don’t pay them? We don’t have a debtor’s prison, (at least not yet…now that WOULD be problematic for me…NO PRISON..I already paid my debt to society by living in Texass).

So yeah, everybody should just stop paying all of that stuff, (or at least interest) and let them take what they can get, and let it be enough.

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By Dr. Knowitall, PhD, PhD, October 17, 2008 at 5:07 pm Link to this comment

Whaddaya think would happen if everyone with any kind of debt, a mortgage, car loan or credit card balance simply stopped paying it out of protest of the Big Rescue Bill?

The banks are already reaping huge subsidies for “bad debt.”  Why not be a part?

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By cyrena, October 17, 2008 at 4:13 pm Link to this comment

Big B,

You posed the same questions that I’ve already experienced, and you’re right…the money/equity just somehow sort of evaporates. I had the same situation, and the last mortgage company me and my house got ‘assigned’ to, was Chevy Chase in Maryland. Now I don’t trust anything with the name Chase in it. (course that’s not the only thing I don’t trust).

Anyway, it’s probably a good idea for you to keep paying the mortgage (at least if you can) ‘cause all of your equity is gonna evaporate otherwise, and nobody is gonna be able to tell you where it went.
Besides, I think Chris Horton provides some EXCELLENT advise in his post on this thread, so check that out.

Apparently since JP Chase Morgan bought out Wamu, that’s how you got them. But, I’ve included some links for JP, and it might be worth it to check them out, or otherwise keep an eye on them. It could be worth it to you to find another owner for the rest of your house, and if you’re real lucky, a Credit Union or similar independent house of money. UNLESS…is JP one of the ones that ‘we the people’ are bailing out? I honestly don’t know. I can’t keep track anymore. 

http://www.chase.com/welcomewamu/

http://www.marketwatch.com/news/story/jp-morgan-chase-profit-tumbles/story.aspx?guid={957EF2B5-3EAC-48BA-8459-2DED1ABF59BF}&dist=msr_17

Thanks again to Chris Horton for the excellent post. I’m going to share it with those who are equally as ignorant as I to any ‘real’ solutions. I think it means I’ve gotta hurry up and find a way to beg, borrow, or steal a mobile home, and regain control over my sewing machines, yard machinery, and printing apparatus. (my only means of production). I doubt that my weavers would help me, since it’s unlikely that I can spin anything into gold. But, I can always sew up some sacks or whatever, and start canning food.

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By KDelphi, October 17, 2008 at 3:57 pm Link to this comment

Big B—Yes. Or happened to be here when we “fell”. I did, anyway. I have no real family left here. There was a “split” in my family. And, “my half” did not have such good luck.

Other ones I love (havent seen in forever) are overseas. Hate to show up broke.

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By KDelphi, October 17, 2008 at 3:22 pm Link to this comment

cyrena—Wow. Thanks for sharing all that.

I did not mean, at all, that I thought that anyone who took those loans out were stupid—-they were robbed—for the most part.

I’ve heard all kinds of stories about Texas—it sounds pretty awful. Ohio is not much better—but I get a feeling it is a littel better.

I understand about being in love. I got married after quitting high school. I’ve never married since, (been engaged a few time). It just seems so unnecssary. My little sister has one more white wedding=—and I am NOT going! LOL

Governor Bush—mustve been a trip. A friend of mine’s brother (back from teh “bad old days”—I dont know what else to call them)got caught in Texas for robbing a bank, and was framed for murdering the ex-mayor of Dallas’ son (??) Have i got that right? He was found innocent, AFTER spending a year on death row. I know Carl. He was a thief—but nothing more.

The webmsater sent me an email—the kid “the-real-truth” mustve flagged me. He cautioned me, I get to the “Ohio” website, where he is insisting that there is fraud here, still. He “proves” it with a college website and complains, I guess. Now, he has my name, address and phone on the website. With a map to my house.I dont care—I trust most of you guys, even when we disagrwee,. But, him? Her? I dont know.

He says we will “go have a beer” (i wonder hes old enough?) I wish he would come while steve is still here. I guess he wont.I sortve wish he would.

I actualy went and looked at the map—I thought—my house is NOT worth $61,00!! LOL.

NOthing worse than neo-con college kids. This is ridiculous though.

Oop! Webmaster took it off. Sorry, people , this kid just really riled me.

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By Big B, October 17, 2008 at 3:17 pm Link to this comment

Cyrena

I think you mentioned the only two reasons any of us stayed in the rust belt the last 20 years, Love and grandparents.

What’s that old quote from Mark Twain, “Don’t let some sense of responsibility keep you from doing what is right.”

Easier said than done.

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By Xntrk, October 17, 2008 at 2:58 pm Link to this comment
(Unregistered commenter)

My parents survived the depression the hard way. Did you know farm workers made 25 cents a FLAT, - not a box, picking strawberries in the 30’s. Daddy drove logging truck - over 14 hours round trip, 6 days a week. He stayed awake by holding his cigarette between his ring finger and his middle finger. if you fall asleep they do not separate, and the cig burns you and you wake up.

Now, that is scary! Logging roads are still not fit to drive on, and there was no power steering in 1937.

One thing they agreed on, after they split up, was never to trust a bank or an insurance company, and to invest in land. My mom bought her first house in 1942 for $2500 @ 4% fixed rate interest. She leveraged that house a few times to buy more property, but never owed more then one mortgage at a time.

I taught my kids the same thing, and the 2 that own property have fixed rate mortgages they can still afford. Their inheritance, if any, will be the 2 parcels of land I own. My pathetic IRA’s, 90% employer paid, are sinking like rocks at sea.

If you want to retire comfortably [not rich] work where you get a guaranteed UNION pension. That and SocSec will probably keep you eating, and maybe a roof over your head.

Harry Bridges was next to God in our house. His picture hung right next to FDR!

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By cyrena, October 17, 2008 at 2:35 pm Link to this comment

I

Well KDelphi,

I’m not the overly proud type, and I certainly don’t mind putting the truth out there. I was responding in part to you (when you assured us that NO – You had NOT taken out a bad loan) and on behalf of so many others who have been victimized, and then ‘blamed’. You know the story…all of these people losing their homes are somehow to blame themselves for taking on more than they could handle. And, while that may be true in some cases, that is NOT the case with hundreds of thousands of others who have lost their homes to out right THEFT over the past decade or more.

I was actually in Texas for 17 years, (now that really IS something to be ashamed of). I could come up with a list of spin reasons for why I stayed that long, but at the end of the day, the truth is that I was just stupid. (and in love if it matters). Stupid is far more appropriate. I was like a fish out of water there, because of the overall mentality. But, it seemed like a good idea at the time, since my job allowed me to live pretty much anywhere, and ON THE SURFACE, it was far more affordable than California, or other places in the East or even the Midwest. (the Midwest didn’t work out all that well either). Besides that, my only living grandma was just an hour or two away by air, (in Louisiana) and I was close to her. She’d already told all of us that she wasn’t leaving there, so I went to her, and could hitch a ride easily enough and often enough.

I wish I could say that there was ANYthing good about it, because that might save me a bit of embarrassment, but..there wasn’t. If there was any salvation at all, my job put me in contact with people from everywhere, and so for that I can be grateful. You’re right about Austin. It is the exception, and that also makes it a bit of a ‘bubble’ since it’s not what exists throughout the area, or even the country. I think that the UT system contributed to that, (at least to an extent) but otherwise the place was the shits. Ann Richards was a good governor, and I liked her. And yes, I was there during prince george’s short reign. He was the worst governor Texas ever suffered. And yes, it IS a whole ‘nother country, and the idiots there are PROUD of that!! And if one goes there from Arkansas, it might be an improvement.

I say that ON THE SURFACE it appeared more affordable, (no income tax, cheaper housing, etc). But, the wages for most are much lower, (for me, it didn’t much matter since my base income would have been about the same wherever I was) but they get it from you so many other ways, like in the cost of energy, (I used to have $400.00 monthly electric bills 9 months out of the year, because of the heat) and food and other basics are more expensive as well. Public transportation is non-existent in most places, (they prefer that…claim it keeps the ‘riff-raff’ out of their neighborhoods) and so in the end, it is NOT less expensive. Health care (for the most part) is substandard, and not available, even for those with coverage. It’s also dirty and unkempt, unless one lives in a ‘privatized’ or gentrified area. The income disparity is real and ugly. There are virtually NO state provided social services for the indigent, and they don’t seem to care. Then of course it’s the bible belt, and that was enough to scare me off as well, especially as a non-practicing Catholic. In fact, the first question out of anybody’s mouth in any social setting is, “Where to you go to church?” How about, “I DON’T?!” (That was the same as wearing a red letter on my chest) And, don’t be a single and independent thinking female in Texas. That’ll get you another scarlet letter. Add some color to that, and I might as well have just branded myself for burning at the stake. When queried about my born-again status, they weren’t amused that I explained it wasn’t necessary, since I figure I was born right the first time

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By cyrena, October 17, 2008 at 2:34 pm Link to this comment

II

That was certainly a large part of what victimized me in the housing situation. As far as the local mentality went, if I didn’t have a husband, or a family there, so I had no business living in one of their little upscale enclaves any damn way. (even spinsters weren’t approved of in that location, and I damn sure wasn’t that either. Not with all of my scarlet letters.)

At the foundational level, the education is piss poor. Some of the Universities are OK, but I didn’t return to academia until I came home to California, so it wouldn’t have mattered for me anyway.

So, there you have it. No rational excuse for me being there that long, unless I was some sort of psychological masochist, or just stupid. But, even hard headed folks wise up when they get beat over the head enough times.

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By samosamo, October 17, 2008 at 11:48 am Link to this comment

There should have never been a bailout which in reality was another huge monetary giveaway to the corporate elite. Another thing, I doubt that not many of the fools in congress in either house read and understood that bill other than what their favorite lobbyist paid them to understand. And bitch pelosi after making that pep talk feel good speech turned traitor once again by letting it get voted into a law that w gleefully signed. JUST ONE more last act of grand larceny before the current administration MAYBE steps down on 1.20.2009.
And another thing again, it still blatantly shows that NOT ONE DAMN culprit in the irresponsible and criminal bunch that brought this disaster on will be prosecuted and punished for their crimes.
And paulson now comes out with this dribble and garbage:

http://www.msnbc.msn.com/id/27216783/

He along with bernanke, greenspan with their federal reserve need to be gathered up and prosecuted and kicked out of america because, they and it, are nothing but a huge money laundrying house for the corporate elite and their ‘behind the curtains’ handlers. Central banking is more a part and cause of the problem than a cure because our majority of fools in congress and the white house make hasty decisions and force acceptance down all of our throats as if this will bring back those good old days that we are trying to hang on to in face of the fact it is going away. All the central banking does is to keep our economy based on debt while the few hold the money and dole it out as they see fit.

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By KDelphi, October 17, 2008 at 11:24 am Link to this comment

Big B—That is scary. Seriously.

As far as Congress having the dirt on their hands—both sides do, about equally. But, what can we do about it?

there was some guy ( stupid—I cant remember any more than that), who got one of those “cheques” for “$100,000” “made out to him”. It said VOID on it, but the bank cashed it anyway.

The bank realized what it had done, and they filed suit. The judge ruled that the cheque was legal, and,. he could keep the money!! (I wish I had tried that!)

He used it to open a “disclosure website” to warn peope about fraudulant corporations.

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By billp37, October 17, 2008 at 11:01 am Link to this comment
(Unregistered commenter)

“This kind of cavalier approach to policy-making landed us in hot water in the first place. It cannot help to extract us.” 

The problems of today will not be solved by the same thinking that produced the problems in the first place.
Albert Einstein

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By Big B, October 17, 2008 at 10:48 am Link to this comment

Hey guys, I just got a letter this morning from JP Morgan Chase, telling me that they are now the holder of my mortgage(used to be Washington Mutual) this will make the fourth different company I have made the check out to in the last 8 years.

I have often wondered, if I stopped paying tomorrow, and was thrown out of this house, who gets the equity I have paid for already?(about 50% now) It’s one of those mysteries of the free market!

It’s a shame we can’t handle our personal accounting like corp america does, just write off the loss and deduct it later.
Or the Fed, just print more money(they don’t even do that anymore, they just PRETEND the money is there)

I wonder what would happen if I sent “pretend” money to JP Morgan Chase?

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By felicity, October 17, 2008 at 10:43 am Link to this comment

Just how much have sitting congressmen and others in government contributed to what led to the melt-down.  And, is the ‘ignorance’ as purported in the above article actually not ignorance but fear that if the dirty dealings were uncovered, politician’s dirty fingerprints would show up all over the place.

The Keating Five case when investigated revealed that the infamous ‘five’ had kept Edwin Gray and other federal regulators at bay so Keating could continue looting his S&L;(to the tune of, eventually $2 billion.) Their payoff?  Together, about $1 million in campaign contributions from Keating.

The Senate Ethics Committee eventually absolved the ‘five’ giving as the reason its inability to ‘pin’ anything specific on the them.  Sound familiar?

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Anarcissie's avatar

By Anarcissie, October 17, 2008 at 8:19 am Link to this comment

If you believe W.F. Hummel (http://wfhummel.net/) then most money is not currency but credit, and most of that credit is private, not issued by the government, although the government usually takes a leading role in setting the amount of credit available through manipulation of interest rates and, sometimes, “printing” money.

During the 90’s and the 00’s the top person in charge of credit, Greenspan, caused a huge amount of credit to be generated by holding interest rates very low, actually well under the rate of inflation.  This caused large bubbles in the equities and real estate markets without much affecting the price structure of the labor and goods markets (now often called the “real economy”) and thus, during the Bush regime, enabling the government to borrow hugely, mostly from foreign countries.  The bubbles also encouraged the generation of very dubious debt and credit derivatives, like the famous CDSs.

However, if most money is private credit, it is in effect what someone believes about the value of things in the future.  They can stop believing at any time.  Unlike paper money, which still hangs around when people stop believing in it, credit simply disappears, and we observe rapid deflation.  This is what has happened in the real estate market and, apparently, in the banking community.  This outcome was inevitable but because no one could say just when and how it was going to happen, people pretended otherwise.

Because it has repute and guns, the government can create a lot of credit by fiat, but there is a limit even to that.  At a certain point, people may stop believing that even given the government’s ability to confiscate goods and compel labor, it may not be able to back its credit instruments, and the deflation will continue.  Now the great temptation will be to print money—to mail everyone a check, etc.—and get off the hook by inflating prices in the “real economy”.  Of course, this wipes out wages, savings, payments under contract, and fixed entitlements, so it is bad for working / middle class people and makes them very unhappy.  That may have undesirable political consequences.

One used to laugh at gold bugs—people who believed money should be hooked to certain commodities, especially gold—but it’s beginning to look as if they had a good idea.

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By KDelphi, October 17, 2008 at 8:05 am Link to this comment

Chris Horton—I know that alot of peopel on here probably already know this stuff—but I didnt. When I was taking “liberal arts” in my BA, I didnt have to take Economics, and I just didnt. I studied “Philosophy”, “Govt”, “Cultural Anthropology”—but no real Eco. classes! (My profs were, basically, socialists). My sis majored in Women’s Eco., and tried to tell me that you couldnt really understand social power without Eco.—but I was young and “waiting for teh Revolution”!! (lol) I suppose thar I still am.
Thanks for that.

cyrena—I am glad someone commented! I think some thoght that I was mkaing it up!! Isnt it disgusting?! I did not know these owners well—but , they were elderly , and I have no idea where they went. People feel “shame’ over this which they shoudl not! I saw the contracts. I know lawyers who couldnt figure them out. I have tried Consumer Credit Counseling, BBB, all taht crap. They ALL say , “Well, you simply have to file bankruptcy.” And, you know why I cant, at least for now.

I’m really sorry that that happened to you in Texas—I wouldnt have figuerd you living there that long! Was Bush governor then? It does seem to be true, that, when hell comes to the uS, it often originates in Texas. They say its a “whole ‘nother country”—maybe it shoudl be. Look, I know Ivins, Richards, Hightower—there are/were good people there. But, I think Texas GOP owes us for some of what Bush did.I hear that Austin is great!

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By Charley Barcelo, October 17, 2008 at 8:03 am Link to this comment
(Unregistered commenter)

My question is this:  We are several trillion dollars in debt, the debt being borrowed money.  We are considering making permanent tax cuts to those who have benefited most by this borrowing.  The money is obtained by selling treasury notes to investors most of whom are from non US countries.  These notes have to be paid off when due.  In the past in order to pay investor A we sold another note to investor B who had confidence in our system and the ability to pay it back.  We just approved close to a trillion dollars to be given to the very companies and individuals who created the problem in the first place.

The money is coming due and we are unable to pay it back.  Confidence in our vaunted system has diminished frightenly and we are facing bankruptcy.  Our system has been crafted into a giant Ponzi scheme

My question is just exacly how will we be able to pay back this debt whrn we have allowed millionairs to keep their money while not having to pay taxes.  Who therefore will supply the money to pay the debt???

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By The Skeptic, October 17, 2008 at 7:56 am Link to this comment

“Drilling beneath the headlines” is an accurate description of the strategy employed here, and (ironically) it explains why TruthDig’s prospecting efforts often fail to yield that which they claim to seek.

Because the main stream media ignores voices that speak truth to (the real) power, truth is not to be found beneath their distracting and obfuscating headlines. I’m disappointed that TruthDig, like many other so called progressives (e.g. least worst voters, MoveOn.org etc.), is forthright when it’s easy or convenient but silent when ‘the truth’ is difficult or if it suits them.

Yesterday, on the steps of the Treasury building in NYC, Ralph Nader spoke truth to the all powerful Wall Street corporate elites who are ravaging our country. He outlined a strategy to deal with the current economic crisis and steer us back toward economic fairness. Nader’s candidacy is pushing the only real progressive agenda in this election, and TruthDig is mining none of it; search this site for ‘Nader’ and witness the meager results. We progressives must form a united but principled front. We must take this good fight to the corporatists and win back our country and future. The results of a short sighted progressive strategy are unequivocal: we will accomplish nothing if we sacrifice our ideals and accept the lesser of the evils; we can’t afford to support an Obama to avoid a McCain.

http://www.pbs.org/newshour/bb/politics/july-dec08/nader_10-14.html

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By Chris Horton, October 17, 2008 at 7:05 am Link to this comment

No wonder no one knows what to do; the abyss we’re staring into looks indeed like nothing we’ve ever seen.

Back in ‘67 my fellow economics students and I worked out that the underlying factors - the declining rate of profits on productive assets and the increasing debt-to-national income ratio, would reach levels of 1929 by 1970. We speculated on how long all the mechanisms that had been put in place for regulating and stabilizing the economy could postpone it, how far the underlying pressures could build up and how it would finally fail. None of us guessed that it could hold together for 40 more years, or how high the pile of paper claims on the real economy would get!

What we are staring into is not just a depression, but the Mother of All Depressions, the consequence of a 40-year interruption of the economy’s normal depression/capital-liquidation cycle. It is going to present us with a survival challenge. Waiting until the economy hits bottom and then starting the cycle over - as happened in every previous depression - will not be an option for the people. Our very survival will require setting up new forms of ownership and control, now, even as the old ones are still collapsing, and withholding assets from the effort to stop the financial collapse will involve accepting the liquidation of most of the wealth of the ruling class.

Needless to say, the political struggle will be intense, as is already foreshadowed in the fight over “the bailout”. The slogan already is “bail out the people, not the bankers,” and surprising new allies appeared determined to stop it!

The bankers won this round, with a sop to the people, but the collapsing financial house of cards is so huge - tens of trillions of dollars of un-repayable loans topped by scores of trillions of dollars of what amount to nothing more than betting slips - that shoring it up and rescuing its owners will soon leave nothing for anything else - and in the end this will fail anyway. The government would quickly exhaust its power to absorb more bad debt by borrowing, and will have to resort to printing money. The resulting hyper-inflation will wipe out the value of all bonds and bank deposits - and debts. The “above-ground” real economy would grind to a complete halt, and what production remained would be for barter.

Eventually, freed from old debts, the economy could restart, The winners would be those who had held onto ownership of land and productive assets.

The people cannot and will not allow the system to go through this collapse unchallenged. The consequences would be widespread misery, starvation, disease and despair. Our demand must be - indeed already is - for the power and resources of the government to be devoted *now* to keeping the real economy working and meeting the peoples’ needs. Already Kucinich and others are calling for the government to start issuing a new currency, now, before the old one has collapsed, and to start constructing a new structure for financing the real economy now.

This program, the only way open for the people, poses a direct and mortal threat to the wealth and power of the top ranks of the ruling class. It is however a program that nearly all the rest of society can agree on, to the extent that they are not swept up by fascist and racist obscurantism. In the end there will be no room for compromise between these two paths. The rulers’ only alternatives will be to accept the liquidation of most of their wealth or to try to overthrow the government and rule by decree.

Defending our government and program from this will require a full mobilization of the people. Every trick, tool and tactic the “overlords” have learned as rulers of the Empire will be employed against us, while we, the most naive people on earth, will have to learn “on the job” how to resist and defeat them, and how to “think different”!

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By jackpine savage, October 17, 2008 at 5:07 am Link to this comment

I find it darkly humorous that the fundamental problem is that we don’t know what/where/how big the problem really is. Our solution is to throw money at the problem; unfortunately, throwing money is what started the problem.

We’ll need all the luck we can get, but i’m not willing to bet on it because we’ve been running on nothing but luck for a long, long time.

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By cyrena, October 17, 2008 at 12:01 am Link to this comment

Oh My Gawd KDelphi,

How disgusting is that? Did it make you just wanna throw up? What do they mean about ‘sellers can’t lose’? I guess that means now that they’ve stolen the homes from the original owners, (foreclosed on them and put them out) they really CAN’T lose.

One of the many questions that has never been asked, and never comes up is…what about people who have been thrown out of their homes after paying on these mortgages for years, and not getting a dime back? Where did all of THAT money go?

I was a victim of this swindle way back before it hit the rest of the country. (Texas is where all of these scandals generally begin). My original loan was sold to someone else within 6 months of me building the home, (and I’d paid for the lot seperately, and in cash). It was sold/tranferred/swapped or whatever the hell they called it, at least 5 more times in the nearly 8 years that I lived in it. (from 1992 to 2000), and the interest rate climbed each time, with no refinancing involved. Allegedly it was a conventional (FHA) loan, (requiring 20% down) and yet it was one of these ‘adjustable’ mortgages(seemed benign enough at the time) but I got totally shafted, and absolutely NOTHING for my house. It had become (at least by then) impossible to trace back through the various holders of the mortgage. It was a nightmare to end all nightmares, and I’m sure I got PTSD from that experience, (not to mention a few similar experiences happening at the same time) and I was never able to figure it out, or get any sort of an accounting of the monies. NOBODY could, yet they ‘got away with it’ (for lack of a better term) either because of my own ignorance, or because I was victimized by illegal practices and couldn’t find any help to sort it out.

So, that’s why I have to wonder where all of the money went on these so called ‘bad loans’. By the time I left my house, I had a considerable amount of equity in it. So, I don’t see how they can claim these losses, if they turn around and sell the place, even at market value. SOMEBODY got the money!!!

Meantime, this still doesn’t answer a question that Shenonymous had on another thread. Where is the money for the bailout coming from, and how does it get repaid, with interest?

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skulz fontaine's avatar

By skulz fontaine, October 16, 2008 at 5:51 pm Link to this comment

NOTICE- Dear Wall Street banker/broker/trader types, it’s the 78th floor go ahead and JUMP!
You’ve earned our disgust the old fashioned way, corruption!

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By KDelphi, October 16, 2008 at 3:32 pm Link to this comment

This is what I got in the mail today.(I wish I had a scanner so I could show the pic):

from a realtor.
“My special invitation to you to visit 2606 Springmont $78,000!!! Be my guset at our touchdown tailgate open house!!!”

Hot dogs, beverages, gabb ‘n gifts.A chance to recruit your new neighbors!”

“Buyers must win, sellers can t lose so make us an offer we cant refuse!!”

“Two-four-six-eight, yes we will ne-go-ti-ate!!”

Nice. Bitch.

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By Paul, October 16, 2008 at 2:59 pm Link to this comment
(Unregistered commenter)

“The bad loans at the base of the matter have not really been accounted for; that is, we don’t know how many there are, how bad they are, how much we might be able to recover from them, how extensively they have insinuated themselves into the financial sector. Unless and until we figure all this out, we’re flying blind. We’re guessing.”

That sums it up - simple common sense! And everybody thought accounting was dull and standard enough to be taken for granted. Who’d've thought that a big part of the problem is the breakdown of something as basic as accounting? When accountants are paid big bucks to lie, watch out!

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