Tuesday, September 30, 2008

Congress to Wall Street: "Drop Dead!"

Congress to Wall Street: "Drop Dead!"
for 24-Hours of Propaganda

Wall Steet waits in anticipation for the Bail-Out that the US Government promised them.

With many congressional members facing tough re-election bids, especially now during what may prove to be the worst Economic Crisis in History, the much ballyhooed $700 Billion Bailout Package for Wall Street failed to pass, even with bi-partisian support.

“This bill failed because Barack Obama and the Democrats put politics ahead of country,” said a statement from Douglas Holtz-Eakin, McCain’s top economic adviser, who had represented McCain on Capitol Hill over the last several days.

Instead of a Bail-Out For Wall Street, How About Kicking All the Deadbeats out of the houses they never should have had?

McCain suspended his campaign Thursday morning to return to Washington to try and get a deal done. Soon after his arrival, though, an agreement that appeared to be coming together fell apart–a situation that Democrats pinned on McCain. Over the next few days, McCain’s campaign took credit for bringing House Republicans, who were reluctant to support the bailout, to the negotiating table. Late Saturday night, the House GOP leadership signed off on a deal. But the majority of the caucus still opposed it when the vote was called Monday.

“From the minute John McCain suspended his campaign and arrived in Washington to address this crisis, he was attacked by the Democratic leadership: Senators Barack Obama and Harry Reid, Speaker Nancy Pelosi and others. Their partisan attacks were an effort to gain political advantage during a national economic crisis. By doing so, they put at risk the homes, livelihoods and savings of millions of American families,” Holtz-Eakin said in his statement. He also blamed Pelosi for delivering a “strongly worded partisan speech” before the vote was called.

A Road That Should Be More Taken

Others were also blaming Pelosi's pre-vote speech. House Minority Leader John Boehner said that Pelosi’s speech “poisoned” the Republican caucus and “caused a number of members we thought we could get to go south.”

In one fell swoop, the House of Representatives applied a sledgehammer to the American economy. The staggering plunge in the value of publicly quoted stocks in the US - a $1.2 trillion fall - shows clearly just how much Wall Street had been holding out for a financial bail-out. Corporate America lost, in one day, a chunk of its value the size of the Indian economy.

Obama took a more hands-off approach to the legislative process, encouraging it along but not trying to intervene directly.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.

So, in the end, not only was it Wall Street "Fat Cats" who brought us to the prespice of collapse, but it was the Federal Government, and in the end, consumers who took on financial obligations they were ill-equipped to handle.

The blame goes all the way around.

The blame does rest at the feet of the very same American Citizens who are decrying "predatory lending" practices and "Wall Street Greed" as the cause of the Financial Crisis.

Every person who took out a loan and did not repay it is to blame. Every single person who believes the US Government should intervene to stop their own foreclosure, readjust their mortgage, or give them their house for free is to blame.

Those who have been responsible with their money--who did not take out second and third mortgages and/or buy houses that were way out of their means--are the only innocent parties in this economic collapse.

"Fuck America! Get Your Free House!"