A better way to bail this out (Michael Hudson, Kucinich adviser)

[Waiting For Everyman]

Wall Street Socialists vs. 4 Million Homeowners
Now Public, 9/20/08

...

The US government made a choice. That choice involved helping the big end of town to pay its gambling debt and left up to 4 million American taxpayers at risk of losing their homes. To add insult to injury, those who lose their homes, and their children, will be paying off the bankers’ debt for many decades to come.

There are alternatives to corporate bail outs. Although reading the mainstream media you could be made to think otherwise. The solution below requires that billions be spent on homeowners/taxpayers, rather than those who have already been proven to be financially incompetent.

A better use of the money, says Michael Hudson, professor of economics at the University of Missouri, Kansas City, and an economic adviser to Rep. Dennis Kucinich, would be to “save these 4 million homeowners from defaulting and being kicked out of their houses. Now they’re going to be kicked out of the houses. The houses will be vacant. The cities are going to (lose) property taxes, they’re going to have to cut back local expenditures, local infrastructure. The economy is being sacrificed to pay the gamblers.”

Source:Truthdig.com

http://www.nowpublic.com/world/wall-street-socialists-vs-4-million-homeowners

__________________________________________________________________

If the 4 million home owners were refinanced by the FHA, then the mortgage-backed securities would be gone - paid off. We could then package and resell the mortgages in a more sane (unsliced) way, give people a chance to pay their new mortgages at low rates and pull this out of the meltdown (and I feel sure the vast majority of them would be able to pay them then)... which would jump start the whole darn economy. Offer it first to those in default who are individuals with ONE home, owner-occupied regardless of credit if there's ability to pay and/or equity. This can be a long-term improvement to our way of life instead of a disaster. But the turnaround can only come from relief given to the grass roots up, not from the top down again. Do we believe in that, or not? It's time to "walk the walk" and not just "talk the talk".

The hedge funds need to fail. Money market accounts that are affected should only be guaranteed up to $100K just like bank deposits. They weren't promised any guarantee so that's more than fair. To give MMs more coverage than local/regional smaller banks will only draw deposits out of those too now, and make them fail for no reason. Money is fleeing out of small banks right now because of that anticipated provision of the bailout, which is absurd, we're going to need them even more.

People who wanted safety and a guarantee put their money in a personal bank account and got less interest. I understand why money market accounts have to be bailed out, but at least recognize that going after that "extra return" was part of the cause of this - it was the rationale for the exorbitant rates banks charged to those without perfect credit for whatever reason (such as unpayable medical bills). At any rate that is much less deserving of relief than homeowners who have been in their homes with the same mortgage for a long time, and STILL going under now - there are lots and lots of such people. Triage it that way, if necessary - first to those who weren't part of the recent bubble. But the middle to lower classes of homeowners must be helped with a bridge across this chasm - in a significant way and now - 9,000 per day are being foreclosed. We have to, unless we'd like to have 5 to 10 million homeless real soon... and MORE financial collapse. Until there's a RE "bottom", none of this changes. At least make it clear that if MM losses which already occurred are given higher coverage, only $100K will be insured from now on.

The base is the primary home and the retirement accounts of individuals. Do that FIRST. And do it right. Let the risk-taking giants learn "Deregulation 101". Yes, there will be jobs lost. Jobs were lost to global trade too, and to vulturistic lending. But a stabilized economy in which most people's homes are SAFE from foreclosre for a change, would go a long way toward boosting it back. RE drives 40% of our economy. There is no choice if we want a positive result - ever.

[BrklynLiberal]

1. But..could the bushco cronies still make money????

:crazy: :silly:

[Mind_your_head]

4. WHY.DO.WE.EVEN.CARE.WHETHER.

still make money!!!!!!

AAAAAAAAAAAACCCCCCCCCKKKKKKKKKKKKK!


'They' don't do ANYTHING for 'us' E-V-E-R. When was the last time you heard about a 'rich cat' donating a park or a LIBRARY?

JUST.DOESN'T.HAPPEN! They 'take the money and run'.

http://tbn0.google.com/images?q=tbn:2SslMuXhKdExKM:http://sendmedeadflowers.

[Waiting For Everyman]

5. Maybe they'd lose enough to stop being threats to the world?

... an indirect but wonderful benefit. :)

[BrklynLiberal]

6. Now THERE'S an idea!!!!

[magellan]

2. Too rational, too logical, too pro-America rather than pro-Amerika

...too bad Kucinich is considered so unelectable. He was my first choice.

[Waiting For Everyman]

10. I truly hope Kucinich and his adviser are in these "discussions".

If not, I hope Obama is smart enough to talk to them before he commits to a position on this.

[magellan]

15. I doubt they are

There's really nothing to discuss. The Dems have let themselves be boxed into a corner again. Bush** will veto anything that includes bailouts for homeowners, and the bailouts of corporate criminals alone won't help the economy one iota (though it'll do wonders for the markets, for a while anyway). It'll have the reverse effect.

Obama is stuck in the same box unfortunately. As we all are.

[calmblueocean]

3. Yes, yes, yes. If we have to bail out anyone, bail out homeowners, not Wall St.

I've been looking for a reason why no one seems to be discussing this possibility. It's like the giant Wall St. bailout is a fait accompli already. It's moving at the speed of light, when we need to stop, slow down, and investigate the options on the table before we commit another trillion dollars to the national debt.

There are so many benefits to bailing out the homeowners, and so few to buying Wall St.'s junk paper, that it's hard to see why we're on the course we're on.

[Waiting For Everyman]

7. Oops, duplicate.

[Waiting For Everyman]

8. And we'd have actual collateral.

Passing this bailout and just stuffing in a few "bones" to the middle class is offensive and ineffective.

[Mind_your_head]

9. That's how they want/planned it.......

So 'fast and furious' one doesn't even have time to think. They just "do" ~ and then they 'do' the wrong thing.

G-d help us! (or maybe we help ourselves and just say "NO" to this nonsense!!!!) NOW, right f*cking Now!!!! Say 'NO'!!!!

[prayin4rain]

11. Sounds better than what we are being offered now!!! Sorry not offered, forced. n/t

[Greyhound]

12. That leaves the big campaign donors in the lurch. DC runs on financial sector

money and they are not about to bite that hand. As long as we keep accepting their choices, we're going to keep getting screwed.


WAKE UP AMERICA!

[TahitiNut]

13. As long as there are a FLOOD of homes on the market, the crisis will continue.

Let's be clear, here. One (just one) of the MOTIVES for offering sub-prime mortgages was to create "BUYERS" and prop up existing home prices as well as new developments (i.e. real estate developers and residential construction).

But WHY did they need to create "BUYERS"?? Because the working class (bottom 85%) have been losing ground on wages and salaries and less and less able to buy a home. The working class has been getting FUCKED for 30 years.

So, what do they do? They load the working class (the people who pay the highest rates of income tax on wages and salaries INSTEAD of dividends and capital gains) with DEBT to pay off the investor class (who pay the LOWEST rates in income tax).

That DECREASES the number of "BUYERS" even more. So home prices fall even more and more and more. The foreclosed properties stay vacant, off the tax rolls.

And then we have the homeless.

It's an INSANE society that makes the working class bail out the investor class, create more homeless, and drive down existing home values for EVERYONE.

Insane.

Sociopathic.

[lonestarnot]

17. It's just insanity.

I think I need to reread Stud's Terkel, Mother Earth and go look for potatoes.

[Mind_your_head]

18. It should be absolutely revolting!

Shouldn't it?

Why isn't it? (Now there's a valid question)

I guess we're all too lazy/complacent to protest.....Well, not for too much longer......

[Name removed]

14. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Mind_your_head]

19. Key Sentence here:

What has happened in the past two weeks threatens to change the coming century - irreversibly, if they can get away with it. This is the largest and most inequitable transfer of wealth

IF THEY CAN GET AWAY WITH IT!..............

[Waiting For Everyman]

21. Exactly. This needs a HUGE push, along with an alternative suggested.

Hudson's in the right ballpark. Homeowner relief can't be an afterthought, it has to be the main purpose of this emergency action now. Foreclosure is the CAUSE for these corporate assets going to junk status. Stop the foreclosures, stop the problem.

The banks are NOT doing workouts. They never will, because a big chunk of their income comes from fees, including foreclosure attorneys' fees.

I worked for the biggest mortgage servicing bank this year, and do you know what they told my training class? They openly said this without even being asked... ALL, not some but ALL of their income comes from fees. Fees charged to people who obviously already have some other problem or they wouldn't be late. Those who are struggling (usually because they're in one of life's major hardships) are carrying the entire weight of the cost of these servicing banks. The "investors" pay zero as a cost of doing business. Who ever heard of that?

I guarantee you that someone who is paying 9% is going to be late and/or default a LOT more than someone paying 5%. They're paying this much simply because of a "risk model" called a credit report. Not only the credit report risk models, but the banks' own internal risk models were proven to be entirely useless. When will this groundless tyranny stop? It's nothing more than an excuse to gouge the poor. This is a totally contrived and artificially created problem. It's PROFITABLE. Until that is changed (by law) it will continue.

[Mind_your_head]

23. Exactly......the poor have been gouged to death, now there is no one to prey

upon.

Oh wait. I hear a heartbeat.... YES! The 'rich man. Gold! New suckage. ~ You're my *best friend* ~

[Peace Patriot]

24. "Organized money hates me--and I welcome their hatred." --FDR

THAT's the kind of president I want.

I agree that this is a coup d'etat--although I think the coup d'etat began during the 2002 to 2004 period, with the fast-tracking of electronic voting systems, all over the country, run on 'TRADE SECRET,' PROPRIETARY programming code, owned and controlled by Bushwhack corporations, with virtually no audit/recount controls.

WHAT DID WE EXPECT TO HAPPEN from an entirely non-transparent vote counting system? Fairness? Justice? Good government?

That's the real heart of the problem, in my opinion. We have almost no one representing our interests in Washington DC. It is the capitol of the global corporate predators, and not our capitol any more. And the only way to seize it back is by restoring vote counting that everyone can see and understand.

2000 was a stolen election. But Diebold & brethren was a coup d'etat--the theft of all future elections, and the end of our democracy. The rest--what we are seeing now--is the consequence of direct, fascist, Bushwhack control of election results.

[lonestarnot]

16. As always, the voice of reason. Of course that makes too much sense.

[Trillo]

20. Hey, Wall Street didn't make all those campaign contributions,

for nothing! Pay to play I think they call it.

It's odd that paying your taxes is some kind of second-rate contribution deserving of the constant shaft.

[Trajan]

22. I way prefer this idea ....

Payoff the fucking notes, and then offer each homeowner a FIXED RATE loan at the same value ... AND the same payment amount before the dreaded reset took effect ...

You are spot on about empty houses being a blight on the real estate landscape .... This method would save MANY billions of dollars on potential losses ...

MUCH better idea ...

[MJJP21]

25. I've read

I've read everything up to now and agree this matter deserves more attention from Barack. Even though it appears to be a slam dunk for a bailout of wallstreet if Barack talks to this guy and goes public echoing this plan I think the tide can be turned. Most people don't understand what is going on other than their is a problem. Barack can make it understandable and no doubt will sway the people in this line of common sense approach. Somebody needs to inform the Barack team this makes sense even if he stands alone but out in front.

[Greyhound]

26. Sunday kick. n/t