 No bail out, please. |
Whose bailout is this anyway?
No way, we wont pay.
By N. Beaujon September 29, 2008
No bail out, please. |
I have read countless articles on the so-called "Emergency Economic Stabilization Act of 2008" and for the life of me I have no idea who we are bailing out. I know who is in trouble: Fannie Mae, Freddie Mac, Wachovia, Citibank and other big banks and credit lending institutions as well as formerly well-heeled brokerage firms like Lehman Brothers. In short, almost every single credit, lending and investment institution in this country is on the brink. I say, let them eat cake.
For decades the government has been backing imprudent investments, illusory mortgages and big shot bankers and brokers who get to keep their commissions and windfall bonuses while making utterly stupid loans to totally unqualified borrowers- never mind the brainless Hedge Fund investors and dubious stock market players, are we being told that they want to be reimbursed, too? No way, I wont pay. (I lost money a while back in CECO. No one offered to bail me out, although I did find out yesterday I am a party to a class action suit that I never asked for WHERE THE ONLY PEOPLE WHO WILL MAKE MONEY FROM THIS WILL BE THE LAWYERS. Think Milberg Weiss Bershad & Schulman. Let them eat... baloney in the federal penitentiary.) Are you getting the picture? Who do you think will make money over all of these failures? Not the investors, that is for sure...The lawyers, of course! But I digress.
More: If I get one more upgrade to my credit limit and/or "free", unlimited blank check book (just in case I want to make a 'big purchase' or transfer a balance) I'm going to scream. The credit companies would have you believe you are taking in income, instead you are taking on debt. Cui Bono? Who benefits? Let's see, the benevolent lenders are blinded by visions of interest rates in their head. (Interest is the mark-up on money.) Banks get beau coup bucks in interest rates on tres risky loans. So, you make a million loser loans at adjustable rates and 50,000 borrowers default. The rest of us will just have our interest rates go up and pay it all back- never mind the generational burden. Then there are the brokers pushing those mortgages who get their commissions, and the underwriters and every other hanger on-er at the so-called "lending institutions" (try: mortgage mills) who get their exorbitant closing costs, appraisal fees, "points" and whatever else they choose to tack on at closing; right before they sell off your loan. And what does the consumer get? The chance to get a home mortgage they can never pay off. Quite often these so-called banks and lenders fail. (Why? They are over-extended or have lied on their balance sheets so that shareholders will be none the wiser and the SEC will not delist their stock.) Now the stocks prices sink, and I do mean sink, and these companies and their shareholders want a taxpayer bailout? No thanks. Here's the 'free market' bailout: The healthy banks purchase the sick banks at bargain basement prices. Isn't that great? A fail proof mechanism and everyone prospers. Touché'! And what American does not love a bargain?
Here's another scenario: FHA (translation: absolutely high risk) loans that have been backed by the government are going to get stiffed when their mortgagees go into default. These loans were made because the government (specifically, the Democratic-controlled congress) said, "don’t worry, it's an entitlement, every American 'deserves' a home! If these immigrants and welfare recipients and people with no discernable income other than food stamps and spotty job histories at 7-11 want a loan, give it to them! Everyone must have a home". The banks had no choice: Lend or face the wrath of Fedaral regulatrors for "red-lining" or discrimination. (This, by the way, is when regulators and auditors actually do come out of their comatose state.)
This congressional extortion racket (thanks Barnie Franks, and the rest of the entitlement housing queens) drove the banks which, in turn, fed the housing industry which became bloated by these "junk loans": Builders, contractors, real estate agents, lumber companies, hardware stores, home improvement centers and everyone else prospered. Credit "expands" the economy. But remember: Credit is not income, it's debt. When the supply of available credit dries up (as it must) these bloated (and false) economies implode. If you shut off "credit" (debt) in our world, you shut off the blood that literally flows into our economy and keeps it on life support. The US economy is terminal but, still, we keep it alive through infusions of credit (see: "Playing with Interest Rates, Running with Scissors" By Alan Greenspan, Ben Bernanke and the Federal Reserve.) And every decade we fail and bail someone out. Any surprise that we have become a nation of consumer crack heads?
If credit stops and spending dries up, people lose their jobs, banks close, institutions fail, unemployment skyrockets until.... until someone comes in and purchases it all at a bargain. Good. We are a false economy with an almost worthless currency and a bloated minimum wage (thank you, Ted Kennedy, et al) that has forced jobs overseas; jobs that might just come back when American labor gets a little bit desperate. Labor in the US costs way too much, this (plus absurd taxation) pushes up prices which is why, for example, your formerly $2.00 fast food meal, which is neither fast or food, now costs you $8.55. Think for a minute about this vicious cycle: False rise in wages (so Democrats can buy votes) = Exponential increase in prices, therefore; Wage earners cannot even afford their own product. Cui bono? The government, of course. More tax revenue for the three branches of waste. (Also think false revenue, in now worthless dollars) but I digress. Anyway, back to credit:
Because of our credit policies there have been too many dollars chasing too few goods- that's called "inflation" (what is your dollar worth today? Maybe .30 cents.) Finally, too much demand, thanks to dubious credit, is chasing too little supply; which is why prices on homes, food, everything are just too high. We have a false economy. Bloated by credit. I say, let it fail. No one likes human suffering but everyone likes a bargain. Those of us who are responsible credit holders, who have put it away for a rainy day, guess what? It's raining.
A note to the US Congress: DO NOT BAIL US OUT. And do not allow any bank to call in a performing loan or mortgage. It's time to shut off the heroin. Stop supplying the junk to the junkies. Stop the pushers and dealers- the banks and the lenders and congress- and let the chips fall where they may. $700 billion to bail out this mess? Triple that figure once "Emergency Economic Stabilization Act of 2008" passes. Nothing ever costs what they say, this is the federal government we are talking about.
Why "just say 'no'?" Because who is going to pay it back? Oh, "I will", says the scorpion Congress to the Consumer frog. "If you just help me now I will help you out later." Final words before the scorpion poisons the frog. The frog in his last dying breath says: "Why did you do it?" The answer from the scorpion Congress: "Because, it's my nature."
