Bernanke, Paulson outline strategy to make working class pay for Wall Street crisis

[Joanne98]

In speeches delivered Tuesday, Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson outlined the ruthless class policy being carried out to place the burden for the financial and housing crisis on the backs of working people.

Bernanke indicated that the Fed would extend its policy of offering unlimited loans to major Wall Street investment banks. The provision of Fed funds to non-commercial banks and brokerage firms, a departure from the Fed’s legal mandate without precedent since the Great Depression, is part of a policy of bailing out the banking system to the tune of hundreds of billions of dollars. The Fed announced its loan program for investment banks last March when it dispensed $29 billion to JPMorgan Chase as part of a rescue operation to prevent the collapse of Bear Stearns.

In his speech, Treasury Secretary Paulson acknowledged that home foreclosures in 2007 reached 1.5 million and predicted another 2.5 million homes would be foreclosed in 2008. But he made clear that nothing would be done to save the vast majority of distressed homeowners from being thrown onto the street.

Paulson, the former CEO of Goldman Sachs, said that “many of today’s unusually high number of foreclosures are not preventable.” With a callous indifference reminiscent of Marie Antoinette’s “Let them eat cake,” he went on to say that “some people took out mortgages they can’t possibly afford and they will lose their homes. There is little public policymakers can, or should, do to compensate for untenable financial decisions.”

In other words, low-income home owners who were lured into high-interest mortgages by predatory mortgage companies and banks are getting their just deserts! Of course, the Wall Street CEOs and big investors who made billions of dollars by speculating on these loans, creating a vast edifice of fictitious capital that was bound to collapse, are not to be held accountable for any “untenable financial decisions.” On the contrary, they are to be subsidized with hundreds of billions of dollars of credit, ultimately to be paid for by public funds.

http://www.wsws.org/articles/2008/jul2008/bern-j10.shtml

[no_hypocrisy]

1. Free enterprise seems to morph into socialism when rich people lose money.

[ixion]

4. yep... remarkable, isn't it?

all these social Darwinists suddenly become raging Marxists when the money lost comes out of their pocket.

[nashville_brook]

2. socialize the risk, privatize the profits.

[jtrockville]

6. You're singing my tune, nashville_brook.

Why not let the folks who made off with the dozens of yachts, vacation homes, jets, etc. etc. bail out this industry?
Maybe unregulated greed isn't such a good idea.

[nashville_brook]

9. it's been a long day -- if i weren't so tired i could tell you some stories of grand scale theft

that would curl your hair. my b/f is a lawyer who works in running down mortgage fraud. there are INDIVIDUALS who in the last year, ran away with 50-100 million dollars (that's just the cases ON HIS DESK). the swindle is so gigantic it's nearly incomprehensible. i'm talking about way more money than a single person or a large family or a small town would know what to do with. there's so much money missing from the real estate industry that i can't imagine it's being used for anything else but financing large-scale war or space travel.

[vaberella]

3. Thanks for this, I was just speaking on this in the GE thread.

[The Backlash Cometh]

5. Yet they will do anything they can to save their golf buddy's summer

beach house and winter ski lodge.

[groovedaddy]

7. Yep - working people who vote republican - keep bending over

maybe they'll finally provide some vaseline before they jam it in there further!!!

[lifesbeautifulmagic]

8. just like there are income requirements for other types of

government aid, the CEO's and other executive types should be required to relinquish all salary and bonuses above the set amount, maybe minimum wage annualized.

[Miss Authoritiva]

10. Rattling the public coffers...

For a free market economy, we sure have a lot of visible hands rattling the public coffers.

* US Federal Reserve and Treasury relief package to Mexico, Argentina, and Brazil during their debt crises (1982-1992)

* $4 billion Federal Reserve, Treasury, and FDIC rescue package for the Continental Illinois Bank (1984)

* $250 billion bailout of hundreds of mismanaged/insolvent Savings and Loans (1989-1992)

* $4 billion bailout of the Bank of New England plus government help in infusing Saudi money into Citibank (1990-1992)

* US Treasury-arranged rescue of the Mexican peso in support of US investors in high-yield Mexican debt (1994-1995)

* Asian currency bailout, in which the US government pressured the International Monetary Fund to rescue East Asian currencies to save American and other lenders (1997)

* Greenspan-arranged bailout of the shaky Long-Term Capital Management hedge fund (1998)

* Y2K Federal Reserve liquidity extravaganza, which helps to inflate the final Nasdaq bubble (1999)

* Federal Reserve interest rates cuts, reaching nearly 50-year lows, to reflate US financial and real estate assets (2001-2005)

[natrat]

11. and our esteemed democratic congressmen will speak up for justice, not

[Tutonic]

12. I'd like to see Paulson and Bernake tied together at the neck,

doused with bovine ephemerone and placed in a field with a raging bull. Two jackasses that need to be treated like they treat the little guy--like he's a piece of meat! Word's cannot properly convey what I would like to really do to these two boney assed A-holes. Does Paulson think that he is invisible and that no one but his slick corporate friends can see what he is doing? Does he think that he's gonna be allowed to continue to ransack our homes while his sycophant friend GW is over pillaging the middle east? How did these losers ever score anything more than a bag of dope in their worthless miserable lives?

Invisible Paulson says: There is little public policymakers can, or should, do to compensate for untenable financial decisions.” Then why in the H-E-L-L are you bailing Freddie and Fannie?

[Tutonic]

13. I think the headline should actually say:

Bernanke, Paulson outline strategy to make sell your children's future.