I have been struggling to first come to grips with what the impact of the decisions of the weeks events really mean to “you and me”, the American worker with boots on the ground in this war against poverty. I kind of grasp it, but would take a very long post to explain it in words most of us could understand. I am trying to avoid those these days. So I am working on the best way to break the concepts down. But before we even bother with that, there are some points that are missing on all of the news networks.
“The Good”.
Of all the people who will really feel the impact of the Banking and credit collaps, the "classically poor" people will feel it the least. The people that already live off government assistance, don’t have a job, are never sure if they are going to have a place to live next week, and send their kids to school more as a form of daycare then for an education are not going to be negatively effected. Their environment isn't going to get any worse. They can't expect it to get any better, it might get a little more crowded, but those closest to absolute zero can't sink any lower. In a way they just got richer.
“The Bad”
The few remaining in the true "middle class" will feel it pretty bad too. They will feel the most spited for living life right and still getting it in the hind end. The “artificial middle class” who have used credit to keep their ship from sinking all of these years are apt to face their real financial stature. (For definition sake, I like "middle class" as "anybody who can maintain their current lifestyle in the face of at least 2 major financial events.") These people will find it harder to get credit to bridge the gap when needed. They will find they might get barraged in financial troubles. The reason is part of that long description that I mentioned earlier. The question/ answer to contemplate until then is this. “What is the one thing that a capitalist society needs to remain successful?” The answer, “consumers”.
The other people really going to feel this is those within a few years of retirement, or so they thought. All of the sudden you go and check your 401K and boom!! Seems you will have to work another 10 years after all. Too bad they weren’t allowed to invest part of their social security too?
"The Ugly"
It is funny how many people around the world have a stake in our economy and how few people here in this country have a stake in it. It should scare Americans to think that many interest other then our own have bought pieces of us. It should scare us because these foreigners that care less about the US people and its doctrine and solely about their money that we have ended up here today. Not once in the past 3 days have I heard somebody say, “Wait, if we have a deficit, where is all the money to bail these people out coming from?”Remember, there is about 300 million in the US. Every time you hear the government giving these big companies money, for every billion, you could more then triple it and think they could send it to you. So $85 billion for AIG? The government could send you $278 for each member of your family. Yet Americans still slumber. They may have stirred a bit. Unable still to connect low prices from over seas to high wage disparity here at home. Americans have let the machine grow smarter then the op
“The Good”.
Of all the people who will really feel the impact of the Banking and credit collaps, the "classically poor" people will feel it the least. The people that already live off government assistance, don’t have a job, are never sure if they are going to have a place to live next week, and send their kids to school more as a form of daycare then for an education are not going to be negatively effected. Their environment isn't going to get any worse. They can't expect it to get any better, it might get a little more crowded, but those closest to absolute zero can't sink any lower. In a way they just got richer.
“The Bad”
The few remaining in the true "middle class" will feel it pretty bad too. They will feel the most spited for living life right and still getting it in the hind end. The “artificial middle class” who have used credit to keep their ship from sinking all of these years are apt to face their real financial stature. (For definition sake, I like "middle class" as "anybody who can maintain their current lifestyle in the face of at least 2 major financial events.") These people will find it harder to get credit to bridge the gap when needed. They will find they might get barraged in financial troubles. The reason is part of that long description that I mentioned earlier. The question/ answer to contemplate until then is this. “What is the one thing that a capitalist society needs to remain successful?” The answer, “consumers”.
The other people really going to feel this is those within a few years of retirement, or so they thought. All of the sudden you go and check your 401K and boom!! Seems you will have to work another 10 years after all. Too bad they weren’t allowed to invest part of their social security too?
"The Ugly"
It is funny how many people around the world have a stake in our economy and how few people here in this country have a stake in it. It should scare Americans to think that many interest other then our own have bought pieces of us. It should scare us because these foreigners that care less about the US people and its doctrine and solely about their money that we have ended up here today. Not once in the past 3 days have I heard somebody say, “Wait, if we have a deficit, where is all the money to bail these people out coming from?”Remember, there is about 300 million in the US. Every time you hear the government giving these big companies money, for every billion, you could more then triple it and think they could send it to you. So $85 billion for AIG? The government could send you $278 for each member of your family. Yet Americans still slumber. They may have stirred a bit. Unable still to connect low prices from over seas to high wage disparity here at home. Americans have let the machine grow smarter then the op
Comments
Please explain the average taxpayer how CEOs for major financial corporations will pay a penalty for any of the bailout or take over of negative performing assets with $700b of taxpayer money now being proposed. Even if unregulated, is it pillage taxpayers in the financial market without any civil or criminal penalties? Why pay taxes at all?
Moreover, what is the total bailout today from the US Federal Reserve & Treasury in comparison to the total number of people below the poverty line or persons without health insurance?
Is it true that while the CEOs of major investment banks, mortgage houses and brokerage firms have made huge salaries over the past 5 years, we are now watching as our tax dollars go (freely or without clear conditions) to bailout what was a free market capitalist economy?
Are we really opening up the Treasury because we realize our economic fundamentals were flawed and rampant with greed where now risk is reaping taxpayer rewards? Is the analogy as follows: CEO's and their receipt of $20m and $30m pay packages and stock options is the same as the inner city drug lord (mortgage companies) or gun dealer (rating agencies) who got their minions (bankers and analysts) to do their dirty work and walk away. Do they get their large compensation packages, pensions, retirement and estates with no questions by the judicial branch of our government?
Are the scales of a democracy in action only for the rich?
However, here is the “Chinese finger trap” we are in. nobody carries cash any more. Most of our purchase these days are credit based. Our economy spins on credit. If you think our economy is slow now and needs “stimulating” try taking the credit cards out of circulation. Company orders would slow to dismal existence. Remember in the “Ponzi Scheme” version of capitalism we have developed, it requires one thing to keep healthy. Consumers. Take the cards away and you loose an awful lot of them. I personally would be willing to take the shot to the gut and let it happen. But that is the fear.
I understand your disdain for the CEO’s of this world. It is true the of the top 10 Citi Finacial had one, Fannie Mea had 2, Freddie Mac had 2, and a few other credit based CEOs took up the rest. I have been preaching connecting the top and the bottom by exchanging a “minimum percentage” policy for our out dated and in effective “minimum wage policy.” This would require the lowest paid employee of any corporation to be based on a percentage of the highest paid. See any of the “Wage reform” entries. Most of the CEO’s of these companies will live just fine. The trouble is that we don’t view white-collar crime with the same malice as we do robbing somebody at gunpoint. We should. However, some might end up in the clink yet. ENRON and Arthur Anderson both had top execs end up in the slammer.
I would expect that you not plan on any help from your government in the near future.
Back to reality: Dems want to "cap" executive benefits. I say, let 'em eat fish, but no one's asking me. Meantime, Hank "In the Tank" Paulson has said what amounts to, "I will bring back the sun if you will make me your dictator."
Most importantly, there's no guarantee that injecting more money into these failed enterprises will save them. In fact, with Paulson at the helm, with no oversight whatsoever, it's damned likely we'll wind up back here lickety-split.
Everyone says that these financial institutions are too big to fail. So the geniuses in Washington engineered buyouts of Merril Lynch by BofA and Bear Stearns by JPMorgan & Chase - essentially making them even bigger. FDIC basically told WAMU they were going to have to perform some financial sleight-of-hand because they couldn't insure the kind of money that WAMU stood to lose. It's likely WaMu will also wind up a subsidiary of a subsidiary.
And given the failure of these bozos to learn the lessons of 1929, the next financial crisis is inevitable, and as with the Great Depression, totally insurmountable.
I don't mean to be a fatalist, if a depression is our sudba, no amount of money will stop it. It comes down to what outcome we most want and need: let them fail and they struggle right alongside the rest of us; bail them out and they'll never learn. At some point, Mommy and Daddy have to let your car get repo'd - it's the only way we learn to be self-sufficient.
Here's my two cents.