Most Popular Choices
Share on Facebook 9 Printer Friendly Page More Sharing
OpEdNews Op Eds   

Billions for Wall Street, A Kick in the Pants for You & I

By       (Page 1 of 1 pages)   1 comment
Message John Kelley
Become a Fan
  (3 fans)
Gretchen Morgenson reported this in an article called “Rescue Me: A Fed Bailout Crosses a Line” published March 16, 2008 in the New York Times. “For the government to print money at the expense of taxpayers as opposed to requiring or going about a receivership and wind-down of any insolvent institutions should be troubling to taxpayers and regulators alike,” said Josh Rosner, an analyst at Graham Fisher & Company and an expert on mortgage securities. “The Fed has now crossed the line in a very clear way on ‘moral hazard,’ because they have opened the door to the view that they are required to save almost any institution through non-recourse loans — except the government doesn’t have the money and it destroys the U.S.’s reputation as the broadest, deepest, most transparent and properly regulated capital market in the world.” This incredible action of the Federal Reserve in funding the purchase of the reckless Bear Stearns investment bank by JP Morgan, with the promise of more, shows that the Bush administration will do anything to rescue its rich friends responsible for the unfolding financial debacle in this country.  While watching the American working people and small business face foreclosure, bankruptcy and unmanageable inflation with little more then a sop of a tax refund, Bush and company promise to take care of their friends no matter what the cost to the rest of us. Every time the feds print more paper and push it into the economy it increases the national debt, deflates the dollar against other currencies and fuels inflation.  If you haven’t gotten your tax rebate yet, by the time you do it might not buy more then a couple of tanks of gas.While Wall Street laments and fears the kinds of loss in stock value that James E. Cayne, Chairman of Bear Stearns took (from $1.2 billion to $13 million) on his stock, the view of the average American is that, hey, I’d take a little humiliation for $13 mill.  The fed says it needs to prevent a financial collapse; unfortunately pumping more paper money into the system and lowering the interest rate will not fix the problem and probably make it worse.  Oil jumped to a new record (a new one being set every day now) of $112 a barrel.  This is an automatic consequence of a dollar that is worth less.  All commodities and overseas manufactured items jump in price, which of course is most stuff since we don’t make anything here anymore.  The fed cut of interest rates has made little change in mortgage or credit rates to consumers.  The spread between borrowing from the fed and lending to consumers has widened, putting additional money in the pockets of investment banks to help them cover their reckless behavior.  In the meantime, regular Americans are trying to decide whether to let their SUV be repossessed because of high gas prices and ride the bus or keep it, let the house go and live in their SUV.  Credit cards, just forget paying them.These things are not accidents, they are the result of policies since the Reagan administration (Clinton included) that promoted trade deficits through outsourcing, encouraged cheap credit, removed financial regulations, and ignored national deficits.  Bailing out Bear Stearns won’t fix the problem.  Not just Bear Stearns but all kinds of investment banks, private equity firms and hedge funds are holding trillions in paper holdings that are backed by real assets worth pennies on the dollar, their value inflated by speculation and fed policy.  The contribution of the war at $12 billion a month in deficit spending cannot be discounted either.  Assets were leveraged at a rate of 30-1 in many cases, all based on the idea that houses, strip malls, and companies that would continue to be worth more no matter what reality dictated. But Bush and friends continue to decide that saving Wall Street from its own follies is more worthy than making sure that the American worker and small businesses that actually produce the wealth in this country have a secure future.  Worse, their continued pursuit of the same policies will insure a total meltdown of the American economy and leave America just another third world country.
Rate It | View Ratings

John Kelley Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

John Kelley is the Managing Editor of a monthly progressive newsmagazine, "We the People News", in Corpus Christi, Texas
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines

Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
   (Opens new browser window)

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Toke Up The Revolution: Why Marijuana Is An Anarchist Weapon

Anonymous Anarchism: The Yang of Globalization

Hold on to Your Seat: America and Its' Debt Based Economy

The Last Fight For Eden: OWS Vs Oligarchy

NAFTA - the Neo-Liberal Destruction of Mexican Culture & Anarchist Responses from Zapatistas to Drug Cartels

Wall Street Leads the Socialist Revolution

To View Comments or Join the Conversation:

Tell A Friend