This is really what is wrong with America
 

Hanging the little guy out to dry

By Joan Vennochi | September 21, 2008
www.boston.com

WHEN YOU are too big to fail, you are bailed out.

When you are too small to save, you are down and out on the street.

Some aspects of the Wall Street crisis are tough to understand. But one
economic principle is pretty clear.

When a really big company goes bust, the little guy pays with his home
or job. But those CEOs and money managers who boldly march their
corporate empires into bankruptcy just get paid millions and millions of
dollars more.

From Washington, inconsistency is the policy order of the day.

President Bush lurched briefly into the spotlight, turning from a
repressed memory into a poor excuse for a Harvard MBA.

In just the past week, the federal government let Lehman Brothers
Holdings Inc. fail; applauded a merger between Merrill Lynch & Co. and
Bank of America; then turned around less than 48 hours later to bail out
insurance giant American International Group Inc.

Before that, bailouts rescued Bear Stearns, Fannie Mae, and Freddie Mac.
Each was deemed too big too fail.

But no one wants to help taxpayers who are losing homes and jobs. In the
grand scheme of American capitalism, they are overreaching specks, too
stupid, presumptuous, and inconsequential to spare.

In February, Bush signed into law a $170 billion stimulus package that
did nothing for those hit hardest by the home mortgage collapse.

And Congress, controlled by Democrats, went along. Even if they didn't
have the votes to override a presidential veto, the people's
representatives could have spoken up for the people. Instead, they
assisted in the charade. House Speaker Nancy Pelosi stood smilingly
behind the president as he signed what he called "a booster shot for our
economy." Ouch.

Last week's mantra from Washington was to bail out the big financial
institutions and then regulate. Let's see if this time the Democrats pay
more than lip service to relief for homeowners faced with foreclosure.
Until then, this mother of all rescue missions is just another way of
saying, "Send them to their room for a time-out with a threat of future
punishment."

Republican presidential candidate John McCain is turning into the king
of shotgun marriages, from his partnership with Sarah Palin to his
sudden embrace of government regulation. After a career in Washington
devoted to the pursuit of deregulation, greed is no longer good for
McCain's political aspirations. So now, he rails against rapacious Wall
Street and tells voters, "We have got to fix it." Given his track
record, it's doubtful McCain will.

Meanwhile, in a back to the future moment, Democrat Barack Obama
sequestered himself in Florida with the Clinton economic team, minus
Bill and Hillary. According to an Obama press release, the presidential
candidate discussed plans to stabilize the financial system with a group
that included two former Clinton Treasury secretaries - Robert Rubin and
Larry Summers; and two former Clinton National Economic advisers - Laura
Tyson and Gene Sperling.

It's time for Obama to show some mettle. Stop talking about
"regulation," and start backing change people can really believe in - a
serious plan to bail out the little guy, as serious as the one offered
up for corporate big shots.

The country's conservative moralists shake their finger at low-income
home buyers who dared to make a grab for a humble piece of the American
dream. When the dream turns nightmarish, the foreclosed-upon are held
personally accountable for their bad debt.

But there's no personal accountability for those who actually understood
the fine print behind those shaky loans, because they wrote it. No one
tells them to hand back their bonuses. If they are eventually forced
out, they walk out with huge paychecks.

By week's end, some editorials were calling for executive compensation
reform. But who really believes there is an end in sight to golden
parachutes for corporate America's golden boys and girls?

The total in taxpayer money that will be pledged to rescue the economy -
as much as $1 trillion - is stunning. So is the general philosophy that
supports it.

For the most part, those cut loose tried to play by the rules.

Those who were saved broke them.
--
http://tinyurl.com/4q88t6

This is really what is wrong with America
 

On Sep 21, 9:08 am, A Real Boater wrote:
Hanging the little guy out to dry

By Joan Vennochi | September 21, 2008www.boston.com

WHEN YOU are too big to fail, you are bailed out.

When you are too small to save, you are down and out on the street.

Some aspects of the Wall Street crisis are tough to understand. But one
economic principle is pretty clear.

When a really big company goes bust, the little guy pays with his home
or job. But those CEOs and money managers who boldly march their
corporate empires into bankruptcy just get paid millions and millions of
dollars more.

From Washington, inconsistency is the policy order of the day.

President Bush lurched briefly into the spotlight, turning from a
repressed memory into a poor excuse for a Harvard MBA.

In just the past week, the federal government let Lehman Brothers
Holdings Inc. fail; applauded a merger between Merrill Lynch & Co. and
Bank of America; then turned around less than 48 hours later to bail out
insurance giant American International Group Inc.

Before that, bailouts rescued Bear Stearns, Fannie Mae, and Freddie Mac.
Each was deemed too big too fail.

But no one wants to help taxpayers who are losing homes and jobs. In the
grand scheme of American capitalism, they are overreaching specks, too
stupid, presumptuous, and inconsequential to spare.

In February, Bush signed into law a $170 billion stimulus package that
did nothing for those hit hardest by the home mortgage collapse.

And Congress, controlled by Democrats, went along. Even if they didn't
have the votes to override a presidential veto, the people's
representatives could have spoken up for the people. Instead, they
assisted in the charade. House Speaker Nancy Pelosi stood smilingly
behind the president as he signed what he called "a booster shot for our
economy." Ouch.

Last week's mantra from Washington was to bail out the big financial
institutions and then regulate. Let's see if this time the Democrats pay
more than lip service to relief for homeowners faced with foreclosure.
Until then, this mother of all rescue missions is just another way of
saying, "Send them to their room for a time-out with a threat of future
punishment."

Republican presidential candidate John McCain is turning into the king
of shotgun marriages, from his partnership with Sarah Palin to his
sudden embrace of government regulation. After a career in Washington
devoted to the pursuit of deregulation, greed is no longer good for
McCain's political aspirations. So now, he rails against rapacious Wall
Street and tells voters, "We have got to fix it." Given his track
record, it's doubtful McCain will.

Meanwhile, in a back to the future moment, Democrat Barack Obama
sequestered himself in Florida with the Clinton economic team, minus
Bill and Hillary. According to an Obama press release, the presidential
candidate discussed plans to stabilize the financial system with a group
that included two former Clinton Treasury secretaries - Robert Rubin and
Larry Summers; and two former Clinton National Economic advisers - Laura
Tyson and Gene Sperling.

It's time for Obama to show some mettle. Stop talking about
"regulation," and start backing change people can really believe in - a
serious plan to bail out the little guy, as serious as the one offered
up for corporate big shots.

The country's conservative moralists shake their finger at low-income
home buyers who dared to make a grab for a humble piece of the American
dream. When the dream turns nightmarish, the foreclosed-upon are held
personally accountable for their bad debt.

But there's no personal accountability for those who actually understood
the fine print behind those shaky loans, because they wrote it. No one
tells them to hand back their bonuses. If they are eventually forced
out, they walk out with huge paychecks.

By week's end, some editorials were calling for executive compensation
reform. But who really believes there is an end in sight to golden
parachutes for corporate America's golden boys and girls?

The total in taxpayer money that will be pledged to rescue the economy -
as much as $1 trillion - is stunning. So is the general philosophy that
supports it.

For the most part, those cut loose tried to play by the rules.

Those who were saved broke them.
--http://tinyurl.com/4q88t6

Meanwhile, Dem. Barney Frank continues to push of low/no collateral
mortgages of the type that caused this problem. Are Dems simply
incapable of learnign from experience? Subprime loans of the type
championed by Frank and other Dems as help for the poor CAUSED the
problem. People are often poor because they cannot manage money so
why would we trust them with a mortgage with no collateral? If you
spend all your money on "blow" isnsyead of savinf for a down payment,
you sure wont be able to pay the mortgage either.
Of course, the idea of no -collateral mortgages then became popular
with the midddle class who saw them as a no-risk way to get rich by
buying risky waterfront properties regardless of how bizarro high the
prices went.