Bailout-a-Go-Go

[Crewleader]

by Peter Schiff, Euro Pacific Capital | December 1, 2008


Keeping track of the ever mutating bailout debate is becoming increasingly difficult. With the Federal money spigots now thrown wide open, and with no one of influence advising restraint, the only debate is where to direct the torrent. During the past week, the talk began with Detroit and Citigroup, but by Friday had shifted to a massive "stimulus package" to bail out consumers. The early buzz includes some very large figures. But first, a bit of a recap:

On Monday, the $300 billion Citigroup bailout took center stage. Once again Henry Paulson decided to throw taxpayer funds into a bottomless Wall Street money pit. Shockingly the Citigroup plan did not seem to demand any serious curtailment of lavish salaries and bonuses. Paulson's shameless largesse to his Wall Street friends has elevated financial industry bonuses to entitlement status.

"Remember Lehman" now seems to be the rallying cry to justify any and all financial bailouts. But Lehman's demise is in no way responsible for our current problems, and the decision to let them fail is the only bright spot in otherwise consistent record of policy mistakes. We bailed out Bear Sterns and AIG, and what did that get us?

http://www.financialsense.com/fsu/editorials/schiff/2008/1201.html

[natrat]

1. i would be happy if they would account for the billions already stolen

[tosh]

2. That would please me, too.

[Adsos Letter]

3. ...dammit...

I just realized that I referred to you as "TeamLeader" on another thread. :banghead:

[etharmon]

4. Do something about it!

What happened to the World Economy was pure evil. What the few did to the many was wrong. It’s time to place the blame where it belongs and get angry. Go to www.stoptheoutrage,org and help us compile and put together the pieces of this puzzle. We are also working to write “The Peoples Amendment to HR 1424.” As one voice we can right the wrongs of the past to save our future.
In Solidarity,
Evvie Harmon
www.stoptheoutrage.org

[truedelphi]

5. Reading the PDF file posted at that site, I feel I need to point out that

AN imporrtant fact is left unmentioned.

Here is what is said in the file
"Here is why the problem is so real. It is very
personal. If the anticipated earnings from
your assets are based on projections that
are extrapolated from inflated values of your
assets, you will find yourself in a deficit
condition when the actual value of your
assets are reported.
Now, if you are so fool hardy as to spend
your anticipated earnings (on executive
compensations, investments, etc), you will
then have negative earnings.
Now, you have created a crisis.
But, wait a minute – you have banked a
significant sum of money from all the
executive compensations and bonuses. And
you do not want to lose any of that and any
potential future income from your business.

It is my belief that part of the rationale for the large salaries is so that the execs and CEO's have a large bargaining chip. They need lavish bonuses so they can lavish Congress with kickbacks. It is that simple.

We live inside a Banana Republic. Our media has more sway over most items on Congress' agenda than we the Taxpayers. Yet the media was unquestioning in its support of the IWR. And the media was equally insistent in late Sept and early Oct 2008 that we put through the "BailOut" bill.

The large salareies and bonuses allow those in the bailed out companies to buy the needed votes of Congress. Until people start focuisng on that fact, we are not going to get anywhere. A few people in Congress are ethical, like Issa, Kucinich, Maxine Waters et al. But many were bought out, and others were too fearful to stand strong with those who understand the crux of the problem.