The Bush administration decided that the country needed "more venture capital" to stimulate economic growth.

1. They deleted the top step of the graduated income tax, so that RBs could accumulate more money, which they could loan to credit consumers.

2. They lowered the capital gains tax - already below what poor working stiffs pay on regular earned income - and made it apply to more kinds of "investment gains" under more liberal rules.

3. By thus transferring all of the money to the RBs, they reduced the amount of money that credit consumers could use to service loans that might be needed, even while they were encouraged to borrow, under predatory terms, from the RBs.

4. By putting an excess of money at the disposal of lenders, they created predatory lending practices.

5. By deregulating "investments" and consumer credit lenders, they permitted (and encouraged) multiple layers of fines, fees, and unlimited "adjustments" in interest rates.

They effectively eliminated the credit consumer as a part of the economy.

When the consumers were "tapped out," the money given to the RBs became pretty much worthless, since there was nobody left to borrow and use it. (It's all tied up in worthless mortgages that can't be paid off since the "adjustable rates" and "penalties" all ballooned out of sight.

The administration's answer: "we gotta bail out the RBs" so they're in the process of handing the "investment community" massive amounts of money. They are "socialising" banking, by taking government owned stock in the banks (while accusing the "opposition" of being communists) but continue to tell the credit consumers "F**k You."

The automakers, and particularly Generous Mother, have requested LOANS, with reasonable guarantees to repay.

The element missing from the great economic plan is that there must be borrowers in order for the lenders to profit. By shifting all of the risk to borrowers, largely via the ARM - adjustable rate mortgages - and then pumping the interest rates (along with arbitraty penalties, unregulated fees, etc.) beyond the ability of (credit) consumers to repay, the RBs have destroyed the entire class of "borrowers." The borrowers are the ones who NEED HELP, and only re-creating the whole class of "credit users/consumers" will help the present situation.

GM is a "borrower," with lots of capital for security and credible plans to repay any LOAN from the Fed; and qualified borrowers are exactly what is needed to help with any kind of recovery.

The RBs who are already getting the bailouts are just leeches, bred by "deregulation" and distorted tax policy to feed on everyone else until the whole cesspool of our economic system is polluted and destroyed. In the analogy of my farm region, "they alread ate the seed grain."

It's the effective destruction of worthwhile credit consumers (i.e. credit-worthy borrowers) that's the real root of the current crisis. GM is a credit-worthy (by most rational analyses) credit consumer, but in the present situation only the Fed has enough money to service the loan that they now need.

Unfortunately, most people also stop making the car payment when they lose their home, even though I've never heard of an "adjustable rate auto loan" or even one with "penalty rate adjustments" after the contract is signed.

Of course that's just the quickie opinion. for now.

John