Question Everything!

According to our federal government and the Treasury Secretary this recession began with the meltdown on Wall Street caused by sub prime mortgage holders defaulting on their payments.

How does the meltdown on Wall Street translate into the state of Massachusetts laying off 1,000 state workers and the state cutting aid to cities and towns by 10%? Many will state the easiest and simplest answer, it’s the recession.

But how does this happen? Former managing director for Goldman Sachs Nomi Prins states in the Nation magazine that “subprime mortgages have been blamed for the financial crisis, but we’re spending more than five times more money (in Fed loans, injections, bailouts and guarantees) that the value of every subprime loan in the country combined. Of the subprime loans issued during the boom years between 2003 and 2007, roughly 1.5 trillion are outstanding. If the system weren’t so leveraged, and each of them defaulted to zero (which hasn‘t happened), they would represent a 1.5 trillion loss. It should be clear by now that something other than subprime loans defaulting or a “housing correction” as Paulson puts it-is wrong with the system. How were those loans packaged and leveraged into what amounts to a 140 trillion global pyramid of junk?”

What’s wrong with the system could be the federal regulators like Darrell Dochow who during the 80’s delayed regulatory action on Charles Keating’s bank, the Lincoln Savings, which when it failed cost the tax payer 4 billion. This same federal regulator allowed Indy Mac a failed mortgage bank the FDIC took over this year to cook its books which led to an 8.9 billion dollar tax payer bail out.

Thomas Jefferson urged us to question everything. There is more to this recession and Wall Street meltdown than we’re being told.

That 350 billion doled out by the Feds to the banks is being used for these large banks to buy smaller banks which will result in even bigger banks “too big to fail”. Will we bail them out too when they fail because federal regulators allow them to cook their books? After all it’s been shown to them that if they take too much risk and pay no heed to responsibility and then fail, we the tax payer will have to bail them out thanks to a government that thinks corporations are more important than citizens.

The first thing the new president elect can do if he’s serious about more transparency in government (which is dubious) is to open those books on the 350 billion doled out to the thieves on Wall Street, get to the bottom of this “sub prime meltdown” and look into this regulatory agency that protects the FDIC, the Office of Thrift Supervision where Darrell Dochow was a senior official.