Posted on 10/04/2008 8:07:04 PM PDT by Tolerance Sucks Rocks
(1) Crime that pays is crime that stays.
There is reason to believe that Wall Street and those they represent are holding loans without collateral, multiple loans secured by the same properties, and other fraudulent instruments among the “troubled assets.” Based on the secret “Treasury Conference Call” with 800 Wall Street insiders, we know the deal proposed to be passed by Congress isn’t the real deal promised to Wall Street.
(2) This smells like obstruction of justice.
Bail-out without due diligence of so called “troubled assets” is a perfect way to hide documentation of financial crimes. It is also a perfect means to launder both the past ill-gotten gains and new federal money spent recklessly and without necessary safeguards and oversight mechanisms. Be very suspicious when they tell you “we just can’t tell what’s in these troubled assets.” We can assure you that the federal government has field offices all across the country that deal with significant amounts of real estate and mortgage assets on a dailyl basis. If Treasury refuses for more than a decade to comply with the laws, with approximately $4 trillion missing (and counting), it is not competent to manage $700 billion of taxpayer money while its arm is twisted by Wall Street.
(3) Wall Street owes the federal government money.
We need to get stolen money back from the banks that served as depositories for the US government (including trillions for which the Pentagon and HUD could not account) and punish them, not create another opportunity for them to game the system and engage in criminal enterprises to rob consumers. To the extent there has been regulatory wrong-doing, let’s not let the miscreants leave town with the evidence.
(4) Good guys are shut out.
A bail-out provides no way for honest leaders to come to the fore and use their creativity and expertise to restore balance and integrity to the system or for unproductive and poorly-managed banks that contribute to current over-capacity in the banking system to die a dignified death.
(5) This results in more investment in the “bubble economy.”
Spending massive amounts on non-productive uses (“buying” worthless credit default swaps, mortgages with no collateral and derivatives, which could even include the derivatives used to manipulate the precious metals markets) as opposed to productive uses (repairing infrastructure, creating alternative energy systems, supporting inventing and production of “green” products) is inflationary.
This bail-out will drive prices of food, water and energy up for the people who can least afford it.
(6) Bail-out does not result in capital circulating in healthy ways.
The bail-out of Wall Street and too-big-to-fail banks and insurance companies that are getting bigger by the minute by swallowing up other failing financial institutions (and creating more institutions that are “too big to fail”) does not result in trickle-down to those whose money was stolen in recent swindles (S&L, dot.com, current housing crisis), i.e., the taxpayers/middle class and working poor.
(7) These arrangements will result in more corruption.
Centralized “fixes” are sure to result in black holes, no-bid contracts and other scandals.
(8) The bail-out drains the real economy, rather than invests in the real economy.
The US economy can’t be productive or grow if consumers don’t have jobs and can’t afford to purchase goods and services. Real stimulation of Main Street is accomplished through productive investment, not bail-outs that shift money to unproductive sectors. We should use all of our precious resources to reinvest in our people in the real economy.
(9) It props up sectors that need to downsize and consolidate.
There is significant overcapacity in the financial and banking sectors. Brainpower and talent needs to stop blowing financial bubbles and shift to economic activities that create real value.
(10) It is a temporary “fix” to keep Wall Street afloat until after the election.
Our resources are better invested in permanent, long-term solutions. This bail-out will not fix anything. Rather, it will help the perpetrators get away and ensure that the ultimate day of reckoning is worse.
The Administration wants to drain the real economy to bail out Wall Street. It seems to us that the more appropriate plan would be to require Wall Street to return the $4 trillion plus that is missing and use that to rebuild the real economy.
We think the time has come to reverse the flow. Go to any business school in the country. That is what they teach. Money should move out of unproductive sectors into productive sectors. The bail-out does just the opposite.
“Just say NO!”
PING!
Yeah, right now this is about as useful as ‘10 Reasons Not To Admit Red China To The UN’.
Yep. Just posting it to show more arguments against the bailout.
David Asman did a report on the bailout and the possible consequences tonight.
No complaints here, except towards our rulers in Washington. :)
Reason #11: It only encourages socialist politicians like McCain and Obama to thwart the will of the people and destroy the free market system and our Democratic Republic to replace it with socialism.
I saw it. It basically explains what Fraxinus warned me about 2 years ago.
They did the right thing and then turned around and undid it. And the market still fell the day they voted for it. It’s beyond frustrating.
Yes, but as I understand it, if you can trust the word of Sue Myrick (R-NC), healthy businesses were having trouble getting credit. It worries me when the troubles start spreading beyond the deadbeats and the others with questionable credit histories.
I still wouldn’t have voted for the bill, though, until they cleaned out all the crap that was added to it. Even then, perhaps a better alternative could have been created, for example, providing oversight over the financial dictator—er, treasury secretary, or simply repealing the CRA, repealing market-to-market accounting, lowering or eliminating capital gains taxes, and so on.
I think this bill was ultimately a tough call, regardless of your political and economic philosophies.
not referring specifically to you. I probably should have used "a given individual's" instead.
Too late
Yep.
Yes, I agree with that and we discussed it on a Sowell thread, a few days ago. I don't want to see innocents get hurt. Couldn't they have tailored a bill aimed at helping those folks out and ultimately phasing out Fannie Mae and Freddie Mac?
As I understand it, somebody, I think it was Senator Kyl, just proposed selling and breaking up Fanni Mae and Freddie Mac. This is something I heartily agree with. Maybe when these two behemoths are broken into pieces, and have to play by the same rules as other private mortgage holding companies, some sanity will return to the market.
I may sound like a broken record on this, but repealing the CRA would be wise, too.
CRA? I had basic economics in college years ago.
Later read.
Toxic paper not only makes it difficult for people to borrow money, but also difficult to lend it. Propping up the book/market value of toxic paper makes it more toxic, not less. And having the government buy toxic paper is like having an AIDS patient give blood to a healthy patient on the theory that the AIDS patient will benefit by diluting the virus, and the healthy person will survive despite it.
Community Reinvestment Act, which effectively pressured or forced financial institutions to make loans to people who otherwise would not qualify for them (subprime loans). Or, as the Democrats might put it, bring home ownership within reach of the poor and minorities.
Not that there’s anything wrong with minorities owning homes, of course. I was just laying out the Democratic propaganda for you.
And furthermore, if the government buys the assets, which really have become liabilities, at “fire sale” prices, the financial institutions will not have that much credit to extend to people and businesses.
And so, as happened six times between the Civil War and WWII, the latest mortgage securitization scheme comes to a screeching halt.
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