Sunday, September 21, 2008

The New Socialist Dictatorship

There is a new socialist dictator and his name is Henry Paulson. The secretary treasurer is behind the bank bailouts, which will raise the national debt and saddle americans in order to pay for the golden parachutes and lifestyles of the plutocrats that run the financial institutions that are failing. Henry Paulson was head of Goldman Sachs and appears to be protecting his own at our expense. We now hear that he wants to extend the bailouts to foreign banks that have operations in this country. This dictator will saddle us potentially with 1 trillion in debt, and yet, he has to call Warren Buffet for advice, a robber baron that makes his bones in downturns and through other people's misfortunes, not to mention it is unethical if not illegal for Paulson to be discussing what is in essence insider information. Didn't Martha Stewart go to jail over that? To add insult to injury, Paulson is pushing congress to pass this buyout without knowing what it entails and the consequences. To understand how much power this guy wants, a quote from the bailout bill: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency”...“The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time.” There is an old saying that the fish stinks from the head and this one does. These plutocrats have screwed up with the subprime debacle. Bailing them out is analogous to a co-dependent parent or spouse that keeps bailing out, covering for and making excuses for a spouse or child that has a bad drug problem and commits crimes. Right now we are at a point where tough love is called for, and it's times for the banks to eat the shit sandwich. The problem is we have a new dictator in Henry Paulson that wants to bail out his buddies. Bush is showing poor leadership in backing this ill conceived plan. What do you think? Paulson is not an elected official, and Bush is a lame duck, but their plan will affect us for decades to come. Who do you blame? We have an election coming up and Barack Obama's solution is more regulation and bureaucracies, definitely a step in the wrong direction. Right now I am waiting to hear from John McCain and the silence is deafening. 

Thank you for reading this blog. 


BK ( said...

Found this on Neal Boortz's website.
'OK .. so we all know that a lot of really bad real estate loans were made. The political class would sure love for us to believe that the blame here rests squarely on “greedy” (try to define that word) mortgage brokers and lenders. The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.'
Also heard this term: Lemon socialism- the subsidization of the weak. Could not agree more. Where will it all end? I hate to think.

Jim Lagnese said...

There are a lot of people to blame. What it comes down to was the economy was over heated due to the housing boom. Mortgage rates went down which made it easier to borrow more money, and many more people got into homes than ever before. This is ok. What went wrong is that banks wanted to cash in and started lending money to people, for a lack of a better word, that didn't deserve it. People that were bad risks were able to get loans, particularly ARM. Some people got mortgages without real background checks. If politicians are to blame at all, it's because they put pressure on lenders like fannie mae and freddie mac to lend to minorities, who tend to be higher risk. When interest rates went up, all these people that borrowed money as sub-prime borrowers got hammered, twice. Their interest rates went through the roof, and the rising interest rates lowered home values because higher interest rate lower the amount that can be borrowed. So, when almost everyone could borrow to buy a home, the demand went up dramatically, and so did price. When rates went up and demand went down, so did the home prices. People were stuck with homes that were worth less than when they bought them, and many had negative equity. So as people went into foreclosure, banks started getting hammered, and in many cases, it wasn't the original banks that made the loans, but banks that bought the loans. THese banks that bought the loans didn't do due diligence to find out that these loans were subprime and too high a risk and it's too late to play hot potato. I say too F'ing bad for all involved. Financial markets aren't guarantees to wealth, and shouldn't be per se. Unless you stick to CDs, bonds or money markets, it's like going to Las Vegas. What needed to happen was to let the correction take it's course. The bad banks would have been bought out by the wise banks, and the market would have been reconfigured. Instead, we have a treasury secretary and a president that want to bail out the banks because they want to expand the power of the government, the federal reserve, bail out their buddies on wall street and foment socialism. On top of this, it is an election year, and a financial debacle would favor Obama. The end result is our national debt will increase by 2 trillion, and the average american will have bailed out the banks while the wall street scumbags get golden parachutes.

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