Wall Street Socialists vs 4 million homeowners
"...immense interlocked, incestuous borrowing… that's what is bringing down the entire banking system."
AIG, Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, IndyMac and Bear Stearns, bankrupt, nationalised, bought out or bailed out. These institutions, run by the world's "best and brightest", were
"...borrowing to take on the risk and borrowing again and borrowing again, 25 to 30 times the amount of capital. ... They had to basically back the borrowing that they were doing. ... There was no transparency to the Fed, to the SEC, to the Treasury,..."
In effect, they were gambling. Their high stakes game failed and many are being bailed out by American workers. The same companies that fought to have their taxes lowered are now relying on working American families to bail them out.
“AIG was acting not simply as an insurance company,”...“It was acting as a speculative investment bank/hedge fund, as was Bear Stearns, as was Lehman Brothers, as is what will become Bank of America/Merrill Lynch.
When one of those working American families defaults on their mortgage, are they bailed out? Would any government agency or bank ever consider bailing out a delinquent gambler?
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 soulution 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.”
One last question, these financial institutions are run by individuals who graduate from the world’s most prestigious universities, our “best and brightest”. These events did not happen overnight. So, where are the whistle blowers?