"Paulson Bailout Plan a Historic Swindle" by William Greider

[last_texas_dem]

>>>>>Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Christopher Whalen of Institutional Risk Analytics, a brave conservative critic, put it plainly: "The joyous reception from Congressional Democrats to Paulson's latest massive bailout proposal smells an awful lot like yet another corporatist lovefest between Washington's one-party government and the Sell Side investment banks."

A kindred critic, Josh Rosner of Graham Fisher in New York, defined the sponsors of this stampede to action: "Let us be clear, it is not citizen groups, private investors, equity investors or institutional investors broadly who are calling for this government purchase fund. It is almost exclusively being lobbied for by precisely those institutions that believed they were 'smarter than the rest of us,' institutions who need to get those assets off their balance sheet at an inflated value lest they be at risk of large losses or worse.">>>>>

http://www.thenation.com/doc/20081006/greider

[Andy823]

1. That was a great article.

I read the whole thing, and it makes a lot of sense. I hope that someone in congress read this too, and brings out these points before the democrats buckle and allow this "bailout" to happen in the way it has been written by Paulson and Bush! I agree with Greider, it can be done, but we need to do it wisely, not in haste as Bush and Paulson want us to do!

[JDPriestly]

2. The truth about the Resolution Trust Corporation -- wasn't to be trusted at all.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility.

http://www.thenation.com/doc/20081006/greider

[2Design]

3. if dem congress votes for this stick up - they can stick it up n/t

[BridgeTheGap]

4. Pretty well lays out there like it is. As Greider points out, the government should step in to

protect Americans facing foreclosure or bankruptcy (most are health related). Anything else violates equal protection.