They have speculated with billions of dollars of other people's money and have lost. The money is gone! The federal government rushed in to rescue the banks, which had lost the ability to sustain themselves, by giving them billions in new money in the form of near-zero interest loans. Then the banks returned to playing the same game as before.
American home values have fallen 30% in three years. Sometime later this year the ten millionth home foreclosure will take place in the same three-year time frame. Right now 26% of all American mortgages are worth less than their purchase price and that number is expected to reach 48%.
Over fourteen million Americans are unemployed and the number is not expected to wane anytime soon. Over 50% have been unemployed for over 27 weeks and the number of new unemployed disguises the fact that millions have exhausted their unemployment benefits. They are still unemployed but no longer counted among the unemployed. They are considered discouraged workers and find themselves in a new and quiet category that does not reach the headlines.
The administration promised strong financial reform and what emerged had enough loop holes to drive a Kenworth through and allowed the banks to simply shift fees and charges. In half the time of the legislation, the banks had recovered all losses due to the new constraints and found new ways of becoming even more profitable.
Rather than aid struggling homeowners, the banks instead bury the bad debts in their portfolios to write off in increments as bad debt. Obama's plan offered the banks $1,000 for every mortgage rescued. Half of all mortgage bailouts still fail so as a banker why would you want to risk taking a beating twice on the same loan for a measly thousand dollars when you can borrow half a million dollars in new money from the Federal Reserve for the same price?
"If your government supports the unfettered ability to search the world for the lowest wages, they do so to your detriment. One other objective closely related to the problem of selling American products is to provide a tariff policy based upon economic common sense rather than upon politics, hot-air, and pull. What we must do is this: revise our tariff on the basis of a reciprocal exchange of goods, allowing other Nations to buy and to pay for our goods by sending us such of their goods as will not seriously throw any of our industries out of balance." (FDR)
That new car you just purchased under the cash for clunkers program cost the manufacturer five or six thousand dollars to produce. You purchased it at $15,000, $20,000? If the car was domestically produced, the components of the car came from a hundred different vendors who all paid wages to their workers and taxes on their profits. If the car was produced in Asia, those vendors were Asian and the taxes paid were to Asian governments.
Last month Timothy Geithner spoke and said the problem in the economy was that Americans weren't saving enough money. It was akin to telling people whose house is on fire about the importance of water conservation. You will never save yourself out of a depression; that is fanciful and almost ludicrous thinking. And it's compounded by the fact that this is a Democratic administration.
Last week former Clinton White House Chief of Staff and Obama transition team co-chairman John Podesta speculated that perhaps a value-added tax might be the correct path to balancing the federal deficit. Value-added or national sales tax has long been the darling of far right conservatives. It is the most regressive form of taxation known to mankind as it charges the same amount to rich and poor. As the conservatives called the inheritance tax the death tax, this would be the life tax. If you work to stay alive, this tax will steal the food from your mouths. It is the worst idea to come from government since Pharaoh ordered the murder of first born sons. Yet it comes from a Democrat, a Democrat closely affiliated with this administration.
You just reach a point where you sit down and ask yourself, "Who the Phuck are these people?" I've been a Democrat all my life and these people don't seem to represent my needs or concerns. Harry Truman first proposed National healthcare in 1948 as an extension of Social Security, much like the current Medicare. Simple, direct, no corporate loopholes, the public option was the whole plan in a nutshell. No committee meetings or counter proposals, here it is; vote on it, up or down.
The health care plans along with Podesta's plan for a value-added tax also offer to subsidize the poor and working class with tax credits while ignoring the obvious. If you build the economy from the ground up you wouldn't need subsidies. The subsidies are granted to the poor to pay to the rich. Why not just have the government subsidize the rich and cut out the middleman? That's what all these schemes amount to, an old-fashioned butt phucking with the promise of a reach around.
These are Democrats? Not in my world. Franklin Roosevelt took $2 billion in loans destined for the big banks and instead founded the Homeowners Loan Corporation, rescuing over one million homes in the first year of operation. The federal government eventually owned 12% of all mortgages in America. The collapse of home prices was stopped, the number of Americans thrown out into the road shrank. The value of the mortgages held by the banks stabilized. How much did this big-spending, Socialist Liberal program cost the taxpayer? Nothing, not one dime! The money was returned to the treasury with interest.