Posted on 12/03/2010 6:04:44 AM PST by joeclarke
They call them the "99ers" - those unemployed who have received benefits for 99 weeks, more or less. The conservative congress, which I campaigned for, probably will not extend the benefits further. Somewhere along the line we have to say "no" to additional spending, but it is impossible for the fedgov to offer a valid excuse for how it can bail out the Wall Street and banks - home and international - with the trillions of dollars (according to CNN) that the entire bailout job may cost.
Larry Kudlow first mentioned "Moral Hazard" way back in 2008. George Bush was for it, however, his Republicans in Congress voted against the infamous TARP. The Dems were in a majority voting for the massive measure that would assuredly "rescue" the country from financial destruction. Kuldow merely asked the question which defines Moral Hazard - "How can you bailout banks and Wall Street, and NOT bailout every other business or citizen that sinks into financial abyss?"
It was the fedgov in the first place, under the auspices (shaking down) of Jesse Jackson and Barney Frank which pushed for the guarantee of practically free housing for every American through Fannie May and Freddie Mac. Private brokers, lenders, hedge funders and other traders all assumed that there were government backed guarantees to the mortgage backed securities and other packaged CDOs, etc. No job? No income? No credit record? Then, you may own a house.
The glut of demand for (free) home ownership pushed the prices of homes into astronomical heights, before they fell to earthly depths, thus killing the U.S. economy for quite some time. The higher cost of fuels - again, thanks to the fedgov's interference with the production of evil fossil fuels - also helped nudge us toward the eve of destruction beginning in 2007 after which a barrel of oil surged to over $130.00 per barrel in 2008. Remember? Don't forget as world global warmists gather in Cancun at this very time in order to devise even more devious ways of cutting the U.S.'s use of energy of all kinds.
Even if banks and GM did pay back all that was loaned to them (but how would we know since the Federal Reserve has henceforth not opened its books for examination), why not "lend" just enough money to survive to those who have been unemployed for nearly two years? Talk about owing your soul to the company store.
Meanwhile, Bernanke is doing something he said he would not - infusing hundreds of billions of borrowed money into the system ie., Quantitative Easing. According to this report, the Fed will have to print/borrow 4 trillion dollars to pay off the previously borrowed debt which resulted from the 2008 financial crisis.
As the Congress looks at massive Deficit Reduction in the midst of a housing and general economic crisis we should not fall into another Moral Hazard by increasing the taxes for the rich who contribute, by far, the majority of revenue to the federal coffers while the lower earners pay nothing, yet receive the lion's share of the federal and state benefits. When the evil rich's tax rates are increased, federal revenues fall. God had it right in the Old Testament when He required the rich to pay only one tithe, and not two or three tithes - as the poorer Israelites would also pay, only, a tithe. Also, the poorer Jews were commanded Not To Covet the goods of their richer brethren - something we will never hear quoted in Democratic Party platforms. "Covet Thy Neighbor's Goods," is their mantra.
The Federal Government, beginning under President Bush and continued exponentially under President Obama, has played favorites by gifting Wall Street and the banks with outright grants worth trillions of dollars and with loans at virtual zero interest rates. Uncle Sam has no valid explanation why he cannot so generously subsidize every other citizen/business of the United States - who fails. That is Moral Hazard.
Oh it seems like maybe the Congress will extend unemployment. Seems the new Cngress we elected to end the Governments spending spree is trying toi cut a deal with Obama on the Bush tax cuts by allowing more “stimulus spending unemployment spending and a few other little tid bits.
Nothing ever changes...
I’d rather be inconsistently right than consistently wrong.
I hope they do cut a deal. It’s going to hurt the GOP if the first thing they do is cut unemployment benefits.
That’s exactly why I opposed the bailouts in the first place, once you bail out one thing, everybody steps in and cries, “What about us?” It set a horrible precedent and opened up a huge Pandora’s Box.
I guess when that Congress is seated in January we shall find out. Until then, the Democrats are still in charge. You do remember that, right?
The GOP doesn’t take over the House until January.
The Banks created those risky loans out of greed in the first place and it isn’t just in the US they sold them all over the globe take Ireland for example that bailout the people there will have to pay $50,000 per household to pick up the banks bad debt. I don’t know if they have Acorn over there forcing the banks to borrow but I do know the Fed lent money to their bank under the bailout while American banks were left to fail and are still failing. Looks to me like they got to wipe out their competition.
Funny thing too is those same greedy banks who invented those toxic loans, i.e., liars loans, etc. also supported Acorn and Obama.
We have already lost Billions that we know as you note no real audit on the banks but really if you count all the bad loans they sold/off loaded onto taxpayers via Fannie/Freddie it could end up in the Trillions even foreign banks were allowed to sell mortgages to the Fed (us taxpayers) but we weren’t given any of the profits.
Bernanke’s Quantitative Easing is just another gift to the banks they hold onto the money and earn interest on it but it devalues the dollar and your purchasing power and you pay for it in inflation at the grocery checkout.
Conservatives who have no problem with bailing out those banks are hypocritical when they talk about the government picking winners and losers in other areas then because that was exactly what was done with the banks.
Taxpayers Lose $2.3 Billion with CIT Bankruptcy
http://www.propublica.org/article/taxpayers-lose-2.3-billion-with-cit-bankruptcy
U.S. Treasury Hid $40 Billion in AIG Bailout Losses
http://publicintelligence.net/u-s-treasury-hid-40-billion-in-aig-bailout-losses/
http://www.nytimes.com/2010/10/26/business/26tarp.html?_r=1
The measure, initiated in Jan. 2009 to stimulate the flow of credit and keep household borrowing costs low, led the nation’s central bank to purchase more than $1.1 trillion in mortgages packaged into the form of securities. The mortgage bonds are backed by Fannie Mae and Freddie Mac, the twin mortgage giants now owned by taxpayers.
Deutsche Bank, a German lender, has sold the Fed more than $290 billion worth of mortgage securities, Fed data through July shows. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.
Ireland’s Fate Tied to Doomed Banks
Up to €50 billion—nearly $50,000 for every household in the Emerald Isle.
A failed banking sector that Ireland’s government can no longer rescue on its own. Ireland is in the midst of a real estate bust that could trump even the ruinous downturns that turned parts of southern California and Nevada into suburban ghost towns, with home-grown banks stoking it all. Now, those banks are trying to manage catastrophic losses. The Irish government has effectively nationalized the nation’s biggest banks by guaranteeing their debt, which would be akin to the U.S. government taking over Citigroup, Bank of America, J.P. Morgan Chase and Wells Fargo.
That means the Irish government is also on the hook for the losses those banks endure—which have risen far beyond initial estimates, and may have a lot farther to go. So far, the Irish government is obligated to cover losses amounting to 175 percent of Irish GDP
http://finance.yahoo.com/news/Why-the-Irish-Crisis-is-Going-usnews-4028366968.html?x=0
FDIC’s ‘problem’ bank list grows to 860
http://www.bizjournals.com/sanfrancisco/news/2010/11/23/fdics-problem-bank-list-grows-to-860.html
Barack’s Wall Street Problem is Now America’s
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats
http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html
JP Morgan gives ACORN Millions
Bailed Out Citigroup Won’t Rule Out Giving More Money to ACORN
http://www.cnsnews.com/news/article/59443
Bailed Out JPMorgan Chase Funds ACORN
http://www.newsrealblog.com/2009/08/24/bailed-out-bank/
True but it's still mostly the GOP that is blocking the extension of benefitgs. And it's the first memorable thing the GOP has done since the election.
Because banks and Wall Street prove their love with cash every campaign season. The unemployed are just a bunch of ingrates, who continually fail to award politicians the adulation they deserve. :)
Great reply. Good for reference.
Thanks, jc
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