Bailout Bonanza
Abookamongstthemany
Posts: 8,209
http://dandelionsalad.wordpress.com/2008/04/07/bailout-bonanza-by-ralph-nader/
Bailout Bonanza by Ralph Nader
Posted on April 7, 2008 by dandelionsalad
Dandelion Salad
by Ralph Nader
Friday, April 4. 2008
Is there a larger, more exploited, defenseless group of undifferentiated Americans than the 133 million individual federal income taxpayers? Their dollars are used to subsidize organized corporate interests, giveaway taxpayer assets like minerals under the public lands, and bail out speculative, self-enriching corporations and their crooked bosses.
As large corporations, and their trade associations, complete their takeover of the federal government—a process that President Franklin Delano Roosevelt called fascism in 1938—the corporations become the government.
Just look at the recent headlines in the business press. Article after article features abuses and over-runs by companies contracting with the Department of Defense and other agencies. The enormous volumes of waste, fraud and poor delivery affecting the Iraq war-occupation now only produces ho hum newspaper and television stories.
Recently, the student loan scandals, exorbitant burdens on students graduating from college imposed on them by companies with influence in Washington, like Sallie Mae, whose government guarantees make a mockery of capitalism, have riled members of Congress to some modest action.
Once again this year, the big boys on Wall Street stretched the envelope of risk and greed and ran down to Washington, D.C. to be bailed out by the accommodating Federal Reserve. Chairman Ben Bernanke testified before the Senate that he had no choice but to take on about $30 billion of Bear Stearns obligations or there could be a run on other big banks. Where was the Federal Reserve when this credit, debt and risk spree was building during the past five years?
There is no penalty for failure—whether on Wall Street or in Washington, D.C. for misusing or wasting the taxpayers’ monies.
When the heads of Citigroup and Merrill Lynch were asked to leave their positions recently as CEOs after tanking their companies’ shares, they could barely avoid tripping over the many millions of dollars they were taking with them through the exit door. Among many perverse incentives operating within these Wall Street firms, there are rewards for failure—big bucks rubber-stamped by the look-the-other-way, well paid Boards of Directors.
Back in 1971 and 1980 respectively, the White House proposed a $250 million loan guarantee for Lockheed corp., and a $1.5 billion loan guarantee for Chrysler with the government taking back warrants that it later sold for a profit. There was intense debate and discussion at public hearings in the House and the Senate before they authorized the guarantees.
Now federal agency bailouts of big business, even Mexican oligarchs, rarely seek Congressional approval. Just have the Executive Branch do what it wants. No public hearings. Midnight bailouts without transcripts.
I asked a powerful Senator: “What are the discernible legal limits on the Federal Reserve’s bailout authority and how much total risk can the Federal Reserve heap on the taxpayers?” “Can they go to a trillion dollars?” He did not know.
Shifting deficits, debts and unfair burdens to individual taxpayers while the rich and powerful become either tax escapees or big time welfare recipients keep pushing a limitless envelope on today’s and tomorrow’s taxpayers.
The New York Times’ prize-winning reporter David Cay Johnston, has written two books “Perfectly Legal” and just recently, the best seller “Free Lunch” that document these megatrends of corporate socialism—privatizing corporate profits and socializing corporate losses on the backs of individual taxpayers.
What can be done about these gigantic runaway sprees?
First, pass legislation that broadens individual taxpayers’ right to sue in federal court against waste, fraud and abuse, including those receivers of bailouts—the reckless, avaricious corporations who have Uncle Sam in their back pockets.
Second, have a voluntary checkoff on the 1040 tax return inviting individual taxpayers to join their own taxpayer defense organization. Such a group would have millions of small dues paying members and an on-the-spot skillful watchdog group in our national capital.
Finally, place our public elections off the private auction block and have them funded by well promoted voluntary checkoffs on the tax returns together with a certain amount of free radio and television time for ballot-qualified candidates seeking federal office.
These and other proposals, such as giving shareholders more power to restrain their top executives, will give taxpayers some grip on the wide-open spigot of taxpayer dollars delivered to the misfits of the giant corporate world.
Bailout Bonanza by Ralph Nader
Posted on April 7, 2008 by dandelionsalad
Dandelion Salad
by Ralph Nader
Friday, April 4. 2008
Is there a larger, more exploited, defenseless group of undifferentiated Americans than the 133 million individual federal income taxpayers? Their dollars are used to subsidize organized corporate interests, giveaway taxpayer assets like minerals under the public lands, and bail out speculative, self-enriching corporations and their crooked bosses.
As large corporations, and their trade associations, complete their takeover of the federal government—a process that President Franklin Delano Roosevelt called fascism in 1938—the corporations become the government.
Just look at the recent headlines in the business press. Article after article features abuses and over-runs by companies contracting with the Department of Defense and other agencies. The enormous volumes of waste, fraud and poor delivery affecting the Iraq war-occupation now only produces ho hum newspaper and television stories.
Recently, the student loan scandals, exorbitant burdens on students graduating from college imposed on them by companies with influence in Washington, like Sallie Mae, whose government guarantees make a mockery of capitalism, have riled members of Congress to some modest action.
Once again this year, the big boys on Wall Street stretched the envelope of risk and greed and ran down to Washington, D.C. to be bailed out by the accommodating Federal Reserve. Chairman Ben Bernanke testified before the Senate that he had no choice but to take on about $30 billion of Bear Stearns obligations or there could be a run on other big banks. Where was the Federal Reserve when this credit, debt and risk spree was building during the past five years?
There is no penalty for failure—whether on Wall Street or in Washington, D.C. for misusing or wasting the taxpayers’ monies.
When the heads of Citigroup and Merrill Lynch were asked to leave their positions recently as CEOs after tanking their companies’ shares, they could barely avoid tripping over the many millions of dollars they were taking with them through the exit door. Among many perverse incentives operating within these Wall Street firms, there are rewards for failure—big bucks rubber-stamped by the look-the-other-way, well paid Boards of Directors.
Back in 1971 and 1980 respectively, the White House proposed a $250 million loan guarantee for Lockheed corp., and a $1.5 billion loan guarantee for Chrysler with the government taking back warrants that it later sold for a profit. There was intense debate and discussion at public hearings in the House and the Senate before they authorized the guarantees.
Now federal agency bailouts of big business, even Mexican oligarchs, rarely seek Congressional approval. Just have the Executive Branch do what it wants. No public hearings. Midnight bailouts without transcripts.
I asked a powerful Senator: “What are the discernible legal limits on the Federal Reserve’s bailout authority and how much total risk can the Federal Reserve heap on the taxpayers?” “Can they go to a trillion dollars?” He did not know.
Shifting deficits, debts and unfair burdens to individual taxpayers while the rich and powerful become either tax escapees or big time welfare recipients keep pushing a limitless envelope on today’s and tomorrow’s taxpayers.
The New York Times’ prize-winning reporter David Cay Johnston, has written two books “Perfectly Legal” and just recently, the best seller “Free Lunch” that document these megatrends of corporate socialism—privatizing corporate profits and socializing corporate losses on the backs of individual taxpayers.
What can be done about these gigantic runaway sprees?
First, pass legislation that broadens individual taxpayers’ right to sue in federal court against waste, fraud and abuse, including those receivers of bailouts—the reckless, avaricious corporations who have Uncle Sam in their back pockets.
Second, have a voluntary checkoff on the 1040 tax return inviting individual taxpayers to join their own taxpayer defense organization. Such a group would have millions of small dues paying members and an on-the-spot skillful watchdog group in our national capital.
Finally, place our public elections off the private auction block and have them funded by well promoted voluntary checkoffs on the tax returns together with a certain amount of free radio and television time for ballot-qualified candidates seeking federal office.
These and other proposals, such as giving shareholders more power to restrain their top executives, will give taxpayers some grip on the wide-open spigot of taxpayer dollars delivered to the misfits of the giant corporate world.
If you want to tell people the truth, make them laugh, otherwise they'll kill you.
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
Man is least himself when he talks in his own person. Give him a mask, and he will tell you the truth.
-Oscar Wilde
Post edited by Unknown User on
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Comments
The bailout bonanza is just getting started.
I wish Jlew were still around to comment, since he point blank laughed at me last year around August when i implied this was coming, and said there would "be no bailouts", not only because it was ridiculous to think that any such massive problems could befall the infallible US economy, but also because "the Government could not afford to".
:rolleyes:
When will the next round of massive bail out fun occur?
Well i would say just wait another 2-6 months for the major banks to actualy take some of their long awaited write offs.
What?
You thought they already took their write-offs?
Bwahahah.
Okay. They took maybe 20 or 30 billion a piece,
but the smart analysts are saying they've all got another 50 billion each to own up to.
When that happens keep your eye on the banks ... especialy Citibank, watch Citibank! ... and expect the REAL government game of bailout shuffleboard to begin.
Holy hell!
If I opened it now would you not understand?
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
This has been happening since 1929, and doesn't seem to bother that much free market advocates. But these type of actions are sickening, especially since it tends to happen more than once.
Yeah but if the government doesn't do this type of stupid thing some banks (and the tax payers represented by their government who actually have money in there) will just loose everything.
Thats not true.
You don't hear about it a lot in the mainstream media, because they don't want you questioning Fed policy or fiat currency, but there are PLENTY of people who love free markets and HATE bailout.
If you've watched CNBC at all in recent months, there are even 2 or 3 anchors who get irked by it. Rick Santelli, most notably, has gone so far as to say "we might as well slap a hammer and sickle on the flag" and "the government has no business in the market, unless we are in a communist country" ...
as far as your response to abooks comment of
You are correct, Kann. It is one of the massive short comings of fiat currency. The only way to avoid absolute collapse is to do more (and faster) of the very same thing that brought about the collapse in the first place -- INFLATE!
As for Abooks original comment, i hate to say it, but this is not true. The government does NOT need your taxes to spend. They don't need it at all really. They do it for a few reasons, the least of which is to keep you duped in to thinking that this is how they get their money. Heaven forbid the people realize that the government is NOT bound by their tax dollars for spending. They also do it because it acts as a yearly counterbalance to inflation ... and also, WEALTH REDISTRIBUTION! But they do not, repeat NOT, need your taxes to spend. They just print bonds and trade them to the Fed for cash. Or they do something even shadier like "repurchase agreements" with the Fed or foreign nations.
:(
If I opened it now would you not understand?
I was mostly thinking about the genius strategists inside banks and funds who spend 9 years advocating the good of the free market then ask for a bailout in that 10th year. And the tax payer, discovering their bank managed to loose 9 years of profit made on his money along with his money, doesn't have much of a choice.
(As for the free market, this is not the thread for it, but don't you think it has been kind of fallacious since the first antitrust laws (which are government intrusions into the market) go back to the 19th century?)