Holiday for the People

In this season of peace on earth and good will towards men, how about some forgiveness, like mortgage reductions for citizens? The banks were forgiven with no questions asked, yet citizens who paid to forgive receive no such mortgage debt forgiveness themselves.

Neither the banks nor the Obama administration are willing to reduce underwater mortgages as a solution to the housing crisis. “The government has been sheltering banks from facing the hard truth about their condition. They may be valuing mortgages or mortgage bonds at say, 85 cents on the dollar, when the true market value, industry experts say, is closer to 25 or 30 cents. …if many of the loans aren’t ever going to be repaid, then the assets now claimed by the bank are imaginary.”

Real people aren’t having imaginary difficulties being underwater. Modification of mortgages along with interest reduction would greatly boost the economy.

As housing prices continue to decrease, it increases the number of mortgages under water. This flood of bad debt has to be reduced or the economy will not recover.

The current financial system is such a wicked web of deceit and moral degeneration that modifying mortgages would mean “The banks would have to report reduced capital…” and “This could threaten the solvency of some of the very large banks-those that have exaggerated their financial condition, as many market analysts and shareholders suspect.”

Let’s have a bank holiday in this holiday season. As former banker Rob Johnson said, “These institutions are so intertwined they are a system. You can’t deal with one bank alone; you have to deal with the system. You call a month long bank holiday for the twenty largest banks, and that holds everything in place while the regulators mark down the assets and see how everybody’s losses will affect everyone else.

“Then you wipe out stockholders, wipe out management, possibly some of the unsecured debt. Mortgages would be refinanced based on real value. Once everybody has taken their hit and you’ve wiped out existing stockholders, then the government comes in and properly, transparently recapitalizes all of them. As these new institutions gain a footing, eventually they can be sold back to the private market.” “This is rough stuff, but the nation could get a fresh start and a new, more honest banking system out of the hard knocks.”

The people cannot be the victims three times here; once by the banks betting against itself with our houses and savings at risk; second by the government bailing out the banks with our tax dollars “no questions asked,” and now the third hit by the banks who are responsible for the whole mess to begin with, refusing to adjust the house value which they manipulated to be over priced in the first place.

Let’s face it, if America wants to be considered the ‘best’ country in the world, the country that all others strive to emulate, then it should start by being honest and truthful with it’s constituents. Otherwise, we become just like the other failed countries where its politicians and bankers have sucked the life out of it’s population, some of the very countries where we’ve sent our military might to depose those in power, to change it to where the government serves the people. The bankers and their politician minions at their beck and call have no reason to believe that it can’t happen here as well.

Note-All quotes are from the article in The Nation magazine-”Debt Jubilee, American Style” by William Greider.

Is the Messenger Transparent?

Senator Kay Bailey Hutchinson doesn’t want to enforce the Consumer Financial Protection Board due to concerns over the agency’s transparency and the dictatorial power of the agency’s director, stating, “we are so worried about the overkill in this. We have prudential regulators in the banking and lending industries now. That has been cleaned up. We have the comptroller. We have the Fed. We have the FDIC. Another layer of bureaucracy is going to cost consumers more, and it's not going to be more protective.”

Bloomberg News reporter Bob Ivry who wrote the story on the Fed’s lending trillions to banks said,-“What we're really taking a look at is what happened afterwards and the secrecy that surrounded the loans that they made during this time. They kept that -- they kept the details of the lending from the folks at Treasury who put together TARP. And they -- and nobody that we spoke with, the senators or congressmembers, knew anything about the details of the Fed lending when they were debating and ultimately passed the Dodd-Frank legislation.”

The Federal Reserve was operating in secrecy and with no oversight but now the Senator and her colleagues are worried about the CFPB. The Bloomberg new report also found “ that banks had potentially profited from the emergency lending programs by some $13 billion dollars and the Fed had spared them a measure of scrutiny that might have led to stricter reforms on the industry.”

Even if this legislation is tepid, Senator Hutchinson is sending the message only consumer protection agencies need scrutiny and reforms, but it’s OK for the central bank and all the other banks to operate in secrecy with no oversight.

Always blaming the people

The Founding Fathers believed a central bank was needed as a means of paying debts and to provide lending for economic growth. Machiavelli said man cannot resist that to which nature inclines. And yet, we commoners; the ’unclean masses’ are supposed to curtail our instincts and cut back on the necessities of life, while the fraudulent bankers who caused this rape of the economy are blameless. After all they’re in the business of making a profit, so who could blame them? Edmund Burke said “I do not know the method of drawing up an indictment against a whole people”.

Now the indictment is against whole peoples of the world because they retire too early, they charged too much on their credit cards or they bought houses they couldn’t afford. There’s too much debt and only austerity cuts can rescue the world.

But why is there an explosion of world wide debt? William Greider writes in the Nation magazine: “The austerity class ignored the massive housing and credit bubble, which more than any single factor contributed to the explosion of debt worldwide.”

Bank mathematicians and engineers and lawyers were the ones getting “creative” with the housing debt and turning home loans into mind boggling equations, which is what got us into this mess. But the solutions are easy, just blame the masses, cut workers and their pensions, while we bail out the crooks, cut their taxes, and guarantee them their fraudulent profit with our tax dollars. That’ll solve the debt crisis.

Clash of the Classes

“All men are created equal” Jefferson had written. Adams understood that this applied to rights, not social station. He believed that, even though the United States would lack a titled aristocracy, it would hardly exist as a classless society. His thoughts on government were aimed at accommodating, equitably but practically, the reality of social classes. Adams sought to do this largely by ensuring that the American Republic would be governed by laws, not men. Laws were incorruptible, whereas people were not. “For him the law was about religion. It was about morality, justice, reward and punishment. It was a vision of order in the universe”.

Disruption in the rule of law has brought disorder and distorted visions; ruling classes are no longer subject to punishment and workers are no longer recipients of reward. In light of this, the banksters have not paid the price for their recent reckless ruination of our economy, including the mainstay of the working class, their house, or the housing market, while the lower classes pay the price by working harder and making less.

Consideration of classes has been blinded by the concentration of wealth at the top. There will always be greater and lesser, but when the one class grows larger at the expense of another, that’s neither just nor equitable.

Adams advocated for a government representing all classes of people; today the Supreme Court creates repressive classes by re-defining personhood and the rights of wealth. Corporations live forever, people do not. This ruling does not take social classes into account.

“The mere fact of creating a republic--dispensing with hereditary rulers--did not level the social classes. A two chambered legislature took social reality into account and dealt with it as equitably as possible.” The Senate represented the wealthy and the House represented the rest of the classes.

Both houses of representation have skewed the laws to favor billionaires, taxed at 15% while the workers are taxed over 30%. These laws are not equitable nor do they deal with social reality.

Governing by the use of incorruptible laws has morphed into governing by corruptible people who dispense with any accounting of social classes or their representative obligations to them. Adams wrote that “power must be opposed to power and interest to interest”.

The ruling class has created a government of powerful interests without equal opposition. It’s a dangerous universe when the law is no longer king. Precisely why millions of Americans are losing their homes and the world drowns in debt all because our elected officials have sold us out. The ruling classes have bought our representatives in congress, and now they don’t have to obey the laws of justice and morality as they were originally intended to protect us.

Note-The quotes on John Adams are from the book “Revolutionary Management" by Alan Axelrod Ph.D.

Plundering Pensions

Countries around the world including the US have jumped on the band wagon to reduce the pensions of the workers. Rhode Island is backing away from their pension obligations, and the state of Massachusetts had their credit rating increased (by bank owned agencies) because of pension reforms.

Pensions for workers is not what caused the financial crisis, it was investing in Wall Street synthetic derivatives which had no real value behind them.

Now that these junk bonds are worthless and there’s no money for pensions, let‘s just blame the people, it’s easier than holding the banks accountable for fraud.

Nomi Prins states in her book ‘It Takes a Pillage’ a former Goldman Sachs employee went to work in the Italian government and encouraged them to deregulate banks similar to the deregulation on banking in this country. A few years later their economy is drained, and presto, they’re cutting back on pensions.

It just seems uncanny that the countries who invested in the Wall Street sub prime roulette now have to cut the pensions of the workers.

The banking crisis was one of the biggest transferences of wealth this country has ever seen, All made possible by bad bets sold on imaginary wealth and then bet against by the very banks that sold them, with all of us real people ultimately paying the price for their fraud.

Rather than advancing the theory that workers don’t deserve a comfortable retirement free from the poverty of old age, they should look into what happened when Wall Street banks played ‘bait and switch’ on pension plans.

But that’ll never happen, banks and the 1% have more power than this president. No wonder the workers are under attack.

Jobs Creators strike against America

According to John Boehner, the “jobs creators” are on strike.

If the Speaker is so concerned, why doesn’t he pressure the president to break this strike like previous presidents? Harry Truman broke the railroad strike, and Governors called on the National Guard to shoot the strikers. Ronald Reagan broke the air traffic controllers strike. why can’t the government break this strike?

And just what are these “jobs creators” striking against? Unfair taxes and burdensome regulations?

Twenty nine Americans were killed in the 2010 West Virginia coal mine due to lack of regulatory enforcement concerning the safety of miners. How many Americans have died from food poisoning? Remember the poisoned eggs?

These companies pay no heed to regulations as it is, Massey Energy Co. and DeCoster egg farm had been cited hundreds of times with little to no corrections. Now people are dead due to their negligence and they’ve gotten away with it. So how have regulations hindered any of these “jobs creators”?

Are the jobs creators on strike when it comes to outsourcing jobs around the world? Chrysler just negotiated new contracts where they’ll pay the American worker the same pay as foreign auto workers. Now if we can just get the cost of living down to that of foreign workers, we might have a chance to be competitive. Oh yeah that’s right, due to all the taxes and regulations, mega corporations have to lower our wages to be competitive with other countries, where the cost of living isn’t as grossly inflated.

George Washington lamented about convincing the whisky makers to pay taxes, without them, the financial future of a federal government was in peril. Paying taxes for federal government is nothing new, why are the “jobs creators” so aggrieved now?

This strike won’t end until government is privatized with all services outsourced to the same corporations who sicken and kill us.

Where are the strike breakers when we need them?

Occupy for a Tea Party

The Tea Party and the Occupy Movement both feel it was wrong to bail out the banks and not Main Street, but that’s where the similarity ends. The Tea Party is against the TARP bailout and mistakenly insists it was passed during the Obama administration. Never mind that it was passed during the last administration while former Goldman Sachs CEO Hank Paulson was the Treasury Secretary, and that’s a large part of the problem, Goldman Sachs is in control of the Treasury, hence the bail for banks only and not the citizens.

The Tea Party complains about the bail out as too much government interference while the Occupy movement complains about the banksters the bail out helped the most.

The current financial banking disaster goes all the way back to the seventies when the rules for commercial banks were deregulated. Commercial banks could only invest in mortgages but were deregulated by pressure from the banks, so that they could invest in anything. The numerous board members were replaced by one bank president. This led to thousands of small bank failures, which then allowed bigger banks to buy up these failed savings and loans banks. This is what led to “banks too big to fail“.

After they created this housing bubble, and when it became clear to these robber barons that it was only a matter of time before this housing bubble burst, the banks bet against the hand they were holding, knowing in advance it was a losing hand. That’s a set up, pure and simple.

The original Tea Party wasn’t only against taxation without representation, they were rebelling against corporate control as well. During colonial times, the British East India Trading company had warehouses full of tea they couldn’t sell back in England. They convinced the British government to force all American colonists to buy only East India Tea. This tyrannical act stood to put many Tea Houses and Tea merchants out of business, part of the reason the tea was thrown overboard.

So both sides can find common ground in the original Tea Party except the people just don’t know it. In reality the Tarp bail out is only a drop in a big scary bucket, the tax payer is on the hook for trillions in sub prime debt. We all should be throwing this debt and the banksters who brought it to us overboard instead of taxpayer dollars funding 400 million dollar retirements for the very people who caused the financial failure.