BS: The Bailout

Subject: RE: BS: The Bailout
From: The Fooles Troupe
Date: 30 Sep 08 - 11:21 PM

Isn't Yellowcake already subsidised?

Subject: RE: BS: The Bailout
From: Ron Davies
Date: 01 Oct 08 - 12:08 AM

..."the hopelessly inexperienced Senator from Illinois".    Oh, you mean the one who has faced this crisis calmly, with reasonable suggestions--while the "experienced" Senator has been all over the map, changing his stance daily, if not hourly. Among other things, placing himself at the head of the insurgents, then finally coming out in favor of the bailout--but still not having the clout, despite his "leadership", to get the majority of his own party to support it.   Just as he waffled amazingly on whether, on what conditions, etc. he would attend the debate. Perhaps his fellow Republicans thought it wasn't necessary to support the bailout--they'd just have to wait for him to change his mind yet again--and stop bothering them.

The "experienced" Senator who bragged to one audience that his personal intervention had improved the bailout bill substantially, and that he had personally saved it.

But it turned out neither was true.

But I suppose we can't expect more from somebody who confessed a while ago that he didn't know much about economics.   Too bad.

And Mr. Gramm may not be the best teacher.





You certainly are the perfect negative indicator. Do you ever do any research? As Lerner said in another context: "Why is logic never even tried?"

Subject: RE: BS: The Bailout
From: GUEST,number 6
Date: 01 Oct 08 - 12:23 AM

"I got the porkchops, she got the pie
She ain't no angel and neither am I
Shame on your greed, shame on your wicked schemes
I'll say this, I don't give a damn about your dreams

Thunder on the mountain heavy as can be
Mean old twister bearing down on me
All the ladies in Washington scrambling to get out of town
Looks like something bad gonna happen, better roll your airplane down"

... excerpt from Thunder on the Mountain by B. Dylan


biLL

Subject: RE: BS: The Bailout
From: Amos
Date: 01 Oct 08 - 01:07 AM

First, he is far from hopeless, and far from inexperienced. Second, the notion that "nonpassage would help Obama" is a little bizarre--his numbers are exactly the same as they were when everyone thought it was a done deal, an average 4.8 points up on McCain. So its highly unlikely--not say bleeding schizo--to imagine that was on Pelosi's mind.

A

Subject: RE: BS: The Bailout
From: beardedbruce
Date: 01 Oct 08 - 07:22 AM

Seldom has America's governing elite been more united in response to a national challenge. The president, the secretary of the Treasury and the chairman of the Federal Reserve were adamant about the need for government to purchase illiquid assets that are clogging the arteries of the credit markets. The leadership of both parties in both houses of Congress, after some reasonable modifications, endorsed the plan. Both presidential candidates also supported it -- one suspending his campaign to push for it. Even young conservative firebrands in the House such as Paul Ryan and Eric Cantor, after gaining significant concessions, came to reluctantly embrace it.

The consensus included everyone who matters -- except 133 mainly conservative House Republicans, along with 95 Democrats, who combined to destroy it.

There can now be little doubt that Nancy Pelosi has an unrivaled record for lacking achievement. In retrospect, it seems incomprehensible that Democrats chose a grating, partisan San Francisco liberal to lead both parties in the House. During the bailout debate, Pelosi used her last breath to channel the shade of Henry Wallace, attacking conservative economics as a "right-wing ideology of anything goes, no supervision, no discipline, no regulation." When one thinks of the skills of the speaker of the House, rubbing your face in it before a vital vote is not usually high on the list. House conservatives were insulted -- then watched as some of Pelosi's committee chairmen and closest political associates voted against the bill. Seeing Democrats saving their political hides provided little encouragement for Republicans to risk their own.


That risk, in the current political environment, was not an easy one. Some House Republicans I talked with reported little sense of urgency among bankers and financial leaders in their own districts -- the real economy in many places has not reached the level of panic on Wall Street. Public reaction to the plan was overwhelmingly negative, which is not irrelevant to politicians facing the voters in about a month. And some ideological objections were deeply felt. "During the 1917 Bolshevik Revolution," said Rep. Thaddeus McCotter (R-Mich.) on the floor, "the slogan was 'Peace, land, and bread.' Today, you are being asked to choose between bread and freedom."

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/30/AR2008093002319.html

Subject: RE: BS: The Bailout
From: Riginslinger
Date: 01 Oct 08 - 08:39 AM

"Why is logic never even tried?"


            It's too often perverted with the irrational injection of religion.

Subject: RE: BS: The Bailout
From: Riginslinger
Date: 01 Oct 08 - 08:47 AM

From MoneyNews.com

Treasury's Henry Paulson Gets $19 Million Bonus
The gift was for six months of work...

Monday, July 3, 2006 10:40 a.m. EDT

Incoming U.S. Treasury Secretary Henry Paulson was awarded an $18.7 million cash bonus for six months of work as Goldman Sachs Group Inc.'s chief executive, the investment bank said Monday.



                      Maybe if Paulson gave this money back, people would take his proposals more seriously.

Subject: RE: BS: The Bailout
From: dick greenhaus
Date: 01 Oct 08 - 11:20 AM

Heck of a job, Henry!

Subject: RE: BS: The Bailout
From: Sawzaw
Date: 01 Oct 08 - 12:16 PM

Fannie Mae Eases Credit To Aid Mortgage Lending
STEVEN A. HOLMES NYT September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent......

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 12:18 PM

The sharp downward drop of the DOW market today has nothing to do with Congress.

Today is the reporting day for the super secret totally unregulated HEDGE FUNDS.

They hold about 2 trillion or more and have suffered about a 50% loss.

The minimum bet on a hedge fund is a million.

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 12:19 PM

Hey Henry's 1/2 billion account is down by half like the rest of us. He's gonna need that 19 million.

Subject: RE: BS: The Bailout
From: Riginslinger
Date: 01 Oct 08 - 12:20 PM

There should absolutely not be institutions functioning as banks that are not regulated.

Subject: RE: BS: The Bailout
From: Goose Gander
Date: 01 Oct 08 - 12:38 PM

Sawzaw -

I realize that it is emotionally satisfying to blame Bill Clinton and 'minorities' for the current debacle, but it just doesn't make a great deal of sense. First of all, only 7 or 8% of mortgages are in foreclosure. Most of us are paying our bills. Secondly, foreclosures are spread all around demographically. And Fannie Mae and Freddy Mac are far from the only institutions to have gotten themselves in trouble with questionable lending and banking practices. Clearly, there is a LOT more going on than some shaky loans to black and hispanic families.

Even if I take your implied arguement seriously, this sounds like an argument for MORE regulation, which is the antithesis of the 'free market' ideology we've had shoved down our throats by right-wing tools for decades now. I'm agnostic on this point for now, because I really don't understand exactly how we got into this predicament.

Subject: RE: BS: The Bailout
From: Goose Gander
Date: 01 Oct 08 - 12:44 PM

Response to 'blame low-income loans' argument.

Subject: RE: BS: The Bailout
From: Amos
Date: 01 Oct 08 - 01:15 PM

I believe the actual foreclosure rate is around three percent.

The problem is not in the individual mortgages. It is in the derivatives, whose value is lost as the market values of the houses shrinks and the value of the serivative assets becomes unkjnowable, and therefore un-creditworthy as collateral for capital acquisition.

This means large companies (and eventually smaller ones) will be hard put to get capital from banks to tide them through the seasons of their fiscal year, because the banks won't be ablet o get capital from other banks or the Fed to tide them through their give-and-take cycles. That's why WaMu and the others folded. As this earthquake resonates down the tree, more pain will be felt at smaller levels.

A

Subject: RE: BS: The Bailout
From: Goose Gander
Date: 01 Oct 08 - 01:28 PM

"The problem is not in the individual mortgages. It is in the derivatives, whose value is lost as the market values of the houses shrinks and the value of the serivative assets becomes unkjnowable, and therefore un-creditworthy as collateral for capital acquisition."

I have no background in finance, but even I knew that housing values would not go up indefinately. I think they used to call this sort of thing a 'pyramid scheme' . . .

Subject: RE: BS: The Bailout
From: Q (Frank Staplin)
Date: 01 Oct 08 - 02:43 PM

Michael has a point.
In a way, our whole credit and loan system is a pyramid. The top is blamed for shortcomings at the base, but the top is only partly to blame.
To make a long story out of it-
Low-cost Building Inc. makes arrangements with the local First Bank of Podunk to provide mortgages with no or small down payment ("just closing costs") to people who buy the houses. The mortgages are very short term, and may be a fraction of a percent lower than those offered elsewhere. The house is sold. The bank sells its mortgages at a small discount to a company such as AIG or Fannie or Freddie because it needs operating capital now in order to give out more loans.
The house buyer may lose his job or have emergency expenses and can't pay. Or the short term mortgage has to be renewed, but the rates are higher, and the house buyer can't fit the extra cost into his tiny budget.
The many Low-cost Building Inc. construction companies overbuild, and supply exceeds demand. Those who have already bought can't afford mortgage renewal. The local factory closes, or businesses may trim staff in order to operate 'more effectively'.
Home owners can't sell, and the mortgage lapses, and the bank takes over the house, which it can't sell or must sell at a loss.

All the paper on these loans has been shuffled upward, and soon AIG or whomever is choked with worthless assets- or assets which may regain their value at some time in the future, but not soon enough to maintain solvency. All those small $250,000 mortgages end up as $trillions in paper assets in the hands of the big boys.
The big boy can't get capital and folds. Everybody blames just the big boys ("Wall Street") but many are to blame.
And no regulation from a sleeping government.
Oversimplified, but part of the story.

Now the government is taking over the 'toxic' assets, and hopes to keep the credit market liquid, and prevent a collapse into full recession. Perhaps years down the road, the cost wil be recouped.
---------------------------------------------

An interesting comment in the NYTimes.com today, "This Economy Does Not Compute," Mark Buchanan, Op-Ed Contributor, Oct. 1, 2008.

Subject: RE: BS: The Bailout
From: CarolC
Date: 01 Oct 08 - 03:09 PM

According to my favorite economist, Joseph Stiglitz, the proposed bailout will only make things worse. He says that the way to solve the problem is to help homeowners renegotiate the conditions of their mortgages, and he proposes a few other solutions, as well as explaining why the current proposals won't work...


A Better Bailout
By Joseph E. Stiglitz

September 26, 2008

(This is an excerpt)

Paulson and others in Wall Street are claiming that the bailout is necessary and that we are in deep trouble. Not long ago, they were telling us that we had turned a corner. The administration even turned down an effective stimulus package last February--one that would have included increased unemployment benefits and aid to states and localities--and they still say we don't need another stimulus. To be frank, the administration has a credibility and trust gap as big as that of Wall Street. If the crisis was as severe as they claim, why didn't they propose a more credible plan? With lack of oversight and transparency the cause of the current problem, how could they make a proposal so short in both? If a quick consensus is required, why not include provisions to stop the source of bleeding, to aid the millions of Americans that are losing their homes? Why not spend as much on them as on Wall Street? Do they still believe in trickle-down economics, when for the past eight years money has been trickling up to the wizards of Wall Street? Why not enact bankruptcy reform, to help Americans write down the value of the mortgage on their overvalued home? No one benefits from these costly foreclosures.

The administration is once again holding a gun at our head, saying, "My way or the highway." We have been bamboozled before by this tactic. We should not let it happen to us again. There are alternatives. Warren Buffet showed the way, in providing equity to Goldman Sachs. The Scandinavian countries showed the way, almost two decades ago. By issuing preferred shares with warrants (options), one reduces the public's downside risk and insures that they participate in some of the upside potential. This approach is not only proven, it provides both incentives and wherewithal to resume lending. It furthermore avoids the hopeless task of trying to value millions of complex mortgages and even more complex products in which they are embedded, and it deals with the "lemons" problem--the government getting stuck with the worst or most overpriced assets.

Finally, we need to impose a special financial sector tax to pay for the bailouts conducted so far. We also need to create a reserve fund so that poor taxpayers won't have to be called upon again to finance Wall Street's foolishness.

If we design the right bailout, it won't lead to an increase in our long-term debt--we might even make a profit. But if we implement the wrong strategy, there is a serious risk that our national debt--already overburdened from a failed war and eight years of fiscal profligacy--will soar, and future living standards will be compromised. The president seemed to think that his new shell game will arrest the decline in house prices, and we won't be faced holding a lot of bad mortgages. I hope he's right, but I wouldn't count on it: it's not what most housing experts say. The president's economic credentials are hardly stellar. Our national debt has already climbed from $5.7 trillion to over $9 trillion in eight years, and the deficits for 2008 and 2009--not including the bailouts--are expected to reach new heights. There is no such thing as a free war--and no such thing as a free bailout. The bill will be paid, in one way or another.

http://www.thenation.com/doc/20081013/stiglitz


Joseph Stiglitz: Bailout Scam "Monstrous"

By Congress Check in Uncategorized on September 26th, 2008

Zogby International
September 26, 2008

Economy Nobel Prize Joseph Stiglitz last weekend said that the current bail out plan for the U.S. financial sector would be "monstrous" for US taxpayers.

"This plan is nothing else but a short term solution," said Stiglitz in a Sunday interview with Germany's Frankfurter Allgemeine Sonntagszeitung (FAS). "We're turning risk investment funds into the hands of taxpayers," pointing out that since no private investor wants to take responsibility for "risk investments, we're simply wall papering them on to the taxpayer, and this is monstrous".

According to Stiglitz the current crisis marks the end of a "disastrous economic model" and the end of the ideology "by which free and deregulated markets always function." As a consequence of the current situation the US financial system as well as the US government "has lost all credibility."

Stiglitz argues that to rescue the system and bring stability to markets, the US government is planning to buy from banks and financial institutions all "non liquid" assets that nobody wants and were the origin of one of the greatest and deepest crises ever faced by Wall Street and the US economy, the Great Depression of 1929.

For this reason, the Bush administration has requested from Congress US$700 billion for a special fund to purchase these assets and bring stability to financial markets. However, private estimates believe the cost of the final bill could be well over US$ one trillion.

But Stiglitz, who is currently a professor at the Columbia University in New York, the Bush proposal will not help solve the problem: "there's every chance that other banks could also be affected."

Stiglitz believes the root of the current situation is the sub prime housing problem and that government assistance must be directed at the mortgage problem. "This is only the beginning of the crisis," he said, and predicted that the US is on the brink of a prolonged recession.

The solution is not bailing out banks by eliminating "toxic" debts, but rather helping home owners renegotiate conditions of their mortgages.

http://www.congresscheck.com/2008/09/26/joseph-stiglitz-bailout-scam-%E2%80%9Cmonstrous%E2%80%9D/


More from Stiglitz...

http://www.bworldonline.com/BW100108/content.php?id=145

http://moneynews.newsmax.com/streettalk/bailouts/2008/08/07/119915.html

Subject: RE: BS: The Bailout
From: M.Ted
Date: 01 Oct 08 - 03:25 PM

Subject: RE: BS: The Bailout
From: M.Ted
Date: 01 Oct 08 - 03:43 PM

In case you haven't checked this "monstrous" proposal out, here it is--The Bailout Proposal

A quick read will show you that there is no sort of proposal or plan at all--it appropriates a nearly unimaginable amount of money for the Secretary of the Treasury to buy up whatever he wants-"The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act" without having to account for any of it--"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

By it's very nature, it is illegal and unconstitutional, and, if that's not enough, it's not even a plan--

Subject: RE: BS: The Bailout
From: beardedbruce
Date: 01 Oct 08 - 03:50 PM

"Text of Draft Proposal for Bailout Plan
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Published: September 20, 2008 "

That was the original proposal, much modified by Congress.

But the new one is still not what is needed.



Why doesn't the US government just buy up all the properties in default ( freeing up the sub-prime mortgages) and make it public housing, with subsidized rent to low income families? Any repairs can be done by a modern equiv. of the CCC, so it provides employment as well.

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 04:05 PM

What I saw and wrote about on the first day Sarah was introduced and gave a little talk was that "she is great at telepromoter messages but is very weak whenever she is off script".

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 04:23 PM

The Bail out /rescue plan that everone would embrace

My plan is to give half of 700 billion to the banks as needed and the other to every taxpayer in America which comes to 107,000 apiece (twice that when husband and wife are both taxpayers).

THIS is a plan that every single god fearing and independant thinking person would support and pay taxes on...even though inflation would reduce purchasing power by about half.

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 04:36 PM

There is a conspiracy of bankers and politicians whose self-interest is masquerading as sophisticated policy. They want us to believe that they have the keys to salvation. I have not seen a scrap of evidence to confirm this.

There will, of course, be a renewed effort in Washington to push through a package of national deliverance. Concessions will be made. The US taxpayer will be offered improved terms. And, having made their point, having stood up for "traditional American values", some of the naysayers in the House of Representatives will cross over, enabling a deal to be done. Their consciences will be salved, but the crisis will not be solved.

UNLESS MY PLAN of a top down and BOTTOM UP rescue is brokered.

A top down and BOTTOM UP rescue is half to the banks and half to taxpayers at 107,000 dollars apiece.

Subject: RE: BS: The Bailout
From: Donuel
Date: 01 Oct 08 - 04:55 PM

NO takers?

well thats folk singers for ya.

Subject: RE: BS: The Bailout
From: Amos
Date: 01 Oct 08 - 06:08 PM

I'LL TAKE IT!!! Where do I sign up?



A

Subject: RE: BS: The Bailout
From: Amos
Date: 01 Oct 08 - 06:15 PM

http://www.signonsandiego.com/news/science/20080930-0732-financial-psychology-.html

Experts Say Herd Mentality Rules in Financial Crisis
from the San Diego Union-Tribune (Registration Required)
WASHINGTON (Reuters)—Herd mentality rules during a financial crisis
because people are wired to follow the crowd when times are uncertain,
experts say.
Brain and behavior studies clearly show that when information is
scarce and threats seem imminent, people often stop listening to their
own logic and look to see what others are doing.
"People are afraid, and the reason they are afraid is there is
tremendous uncertainty right now in the markets," Gregory Berns, a
neuroeconomist at Emory University in Atlanta who studies the biology
of economic behavior, said in a telephone interview. Berns puts people
in magnetic resonance imaging or MRI scanners while he tests their
responses to various scenarios, and studies patterns of their brain
activation.

Subject: RE: BS: The Bailout
From: Q (Frank Staplin)
Date: 01 Oct 08 - 06:20 PM

Gee, $107,000! One could make a down payment on a villa in Turks and Caicos.

? 350,000,000,000 to taxpayers. $107,000 each. That works out to 6.5 million taxpayers. Gee. I thought there were more taxpayers than that. Obviously the rich are overtaxed.

(My math carries no guarantee)

Subject: RE: BS: The Bailout
From: Bobert
Date: 01 Oct 08 - 06:35 PM

I'm with ya', Donuel... I've been posting such a plan as long as we've been talkiing about this... But I'd go even further... I'd put up to $700B in FHA and let it become a lender and refinance borrowers who can demonsrate they they are in danger of forclosure...

FDR had a program like that back in the 30's called the Home Owners Loan Corp. and it worked...

Now here is why i8t is good for Wall Street, too... If FHA refi's all these loans by paying of the principle then that puts a lot of $$$$ back into the banks... Then finace these loans at 6% fixed for 30 years and in the long run this will not only return every dime you put into the program but also give US a return on our investmwent...

That return can be used to shore up Social Security...

(But, Bobert, some of these homes aren't worth the principle that you will be paying off!!!)

Yeah, and some will but that is irrelevent because the goal is to stabilize both the housing market and the banks and when that happens the real estate inventory will dry up some and the values of houses will go back up... Law of supply and demand...

(But, Bobert, that's socialism!!!)

And a bailout ain't???

B~

Subject: RE: BS: The Bailout
From: Bill D
Date: 01 Oct 08 - 07:00 PM

Pat Oliphant's recent cartoons on the situation

He hits hard..

Subject: RE: BS: The Bailout
From: Q (Frank Staplin)
Date: 01 Oct 08 - 08:01 PM

Digression- 2007 figures-
138 million taxpayers in U. S., one-third of whom pay zero tax.
In other words, about 90 million pay federal taxes.

The top 1% of income earners pay 36.9% of federal taxes. The top 5% pay 57% of taxes (they have about 57% of the wealth).
The bottom 50% pay 3.3% of taxes.
For wage earners, the payroll tax system (FICA) imposes a 12.4% Social Security tax on wages up to $97,500 and a 2% Medicare tax, thus acts regressively.
Three-fourths of U. S. taxpayers pay more in payroll taxes than income taxes.

The Tax Foundation has stated that the burden of the corporate income tax (a 15%-39% tax) falls on customers and workers of the corporations, who are often not rich.

Jus a few figures for my own information. Most from Wikipedia, "Taxation in the United States."

(Add state and local taxes. Congressionally enacted tax credits skew the system. Etc.)

Subject: RE: BS: The Bailout
From: Bobert
Date: 01 Oct 08 - 08:51 PM

I don't buy those figures at all, Q... Yeah, you might find some right winged tax hater who has accumulated them, ot shifted thru real data thryu some kind of lense and come up with them but I have read repeatedly about figures that have the upper 5% controlling 80% of the wealth...

The Tax Foudation is a right winged tax haters lobby that wants to continue fleecing the working class...

This is all bullsh*t...

The working class, if you know anytning about it, knows differently... All America sess the absolute grotesque display of abundance that the rich have proudly rubbed in it's face...

The Tax Foundation is a bunch of liars and the rich know it, you know it and everyone in the universe knows it...

But one thing is for sure is that my college Stats professor was right... 1 dan be made to equal 2 and any stat can be amnipulated to prove anything...

Glad yer rich, tho...

Try being part of the working class, whcih despite any protestations on your part, every working class person in the universe knows that you aren't... Then maybe you'll get it that it's bad enough to be greedy but worse to lie about it...

And you can take that to the bank... You and your folks days are numbered because even Southern Man is seeing thu the Tax Foundation liars...

B~

Subject: RE: BS: The Bailout
From: CarolC
Date: 01 Oct 08 - 10:36 PM

The problem with any plan that involves large sums of money, regardless of what's done with it, is that the money would have to be borrowed from the banks, and then we would have to pay interest on it. So if we borrowed that money and then gave ourselves half of it, it would be like maxing out a credit card for all taxpayers and then having to pay a mountain of interest on that card (and probably our kids would have to pay it, too).

A better solution would involve not having to borrow any money from the banks.

Subject: RE: BS: The Bailout
From: Q (Frank Staplin)
Date: 01 Oct 08 - 10:45 PM

The figures can be verified at U. S. Government sites.

Businesses control the wealth. Big businesses like Exxon-Mobil or Hewlett-Packard or Goldman-Sachs are not a handful of rich people; they have hundreds of thousands of shareholders who must be kept happy (probably includes you indirectly if you have have any investments, pension funds, retirement income, bank savings, etc., etc.; the payments come from these investments). Not to mention providing work and comfortable retirement for hundreds of thousands of the 'working' (excuse me, middle) class.

Where the hell is my share of that "80%"? Worked for a salary throughout most of my working life, so I guess I am 'working class', whatever that is. Not in the top 5%, but probably worked into the top 10% at the end. Comfortable, yes, but can't afford that lovely Bentley Continental. But I'll grit my teeth and drive my mid-range SUV.

Own my home. No debts. Educated the kids and helped them set up. Yep, normal working (middle) class.

Subject: RE: BS: The Bailout
From: TIA
Date: 01 Oct 08 - 10:52 PM

Bobert, I do buy Q's figures, but let's think about them for a moment. Of course the wealthy pay more taxes - because they are wealthy. The indigent don't pay much of the total tax -- because they are indigent.   DUH!

from Wikipedia (I know, I know.....):
In the United States at the end of 2001, 10% of the population owned 71% of the wealth, and the top 1% controlled 38%. On the other hand, the bottom 40% owned less than 1% of the nation's wealth.

In describing tax systems, it is important to distinguish between the percent of taxes paid on a given income, and the percent of taxes paid by a person with a given income. For example, if a person earns $1,000,000 and is taxed at a rate of 10%, they will owe $100,000 in taxes. On the other hand, if a person earns $10,000 and is taxed at a rate of 20%, they will owe $2000 in taxes. The person with the greater income is taxed at a lower rate but pays a higher tax. The person with the lesser income is taxed at a higher rate but pays a lower tax. The United States has a tax system which is a mixture of progressive taxation and regressive taxation. The income tax is progressive, capital gains tax, at a lower rate than the income tax, is regressive, as is the sales tax, since the less wealthy spend a greater percentage of their income. In 2003, the one percent with the highest salaries paid more than 34% of the nation's federal income tax; the ten percent with the highest salaries paid more than 66% of the total income tax; the top 25% of paid 84% of the income taxes; and the upper half accounted for virtually the entire U.S. income tax revenue (nearly 97%). This is an inevitable consequence of the concentration of wealth. *****People who do not have much money cannot pay high taxes, even when they pay a greater percentage of their earnings in taxes*****.

*****EMPHASIS BY TIA*********

Subject: RE: BS: The Bailout
From: Riginslinger
Date: 01 Oct 08 - 10:53 PM

"...but can't afford that lovely Bentley Continental."


                  Why would you want one?

Subject: RE: BS: The Bailout
From: TIA
Date: 01 Oct 08 - 10:54 PM

P.S.
Own my home. No debts. Educat(ed)ing the kids and help(ed)ing them set up. Yep, normal working (middle) class.

Subject: RE: BS: The Bailout
From: Ron Davies
Date: 01 Oct 08 - 11:57 PM

"irrational injection of religion". As usual, you have somehow managed to miss the point--in fact you have a perfect record of doing so.

The point is that you are behaving totally irrationally if you claim to oppose organized religion, yet do not fervently oppose McCain, who believes the US was founded as a Christian state, and his chosen second in command, who looks forward to the "End Times", and is at least as much a fundamentalist as Jerry Falwell ever was.

So you are either totally irrational or a total hypocrite. It's a hard call--both seem quite likely.

Subject: RE: BS: The Bailout
From: Ron Davies
Date: 02 Oct 08 - 12:04 AM

Also, BB--- your 7:22 AM contribution is a bit disingenuous, to say the least. It's not an "article" but a column by Mr Gerson, who as I recall was a main speechwriter for GWB.

He doesn't like Obama. Surprise, surprise.

Citing columns doesn't wash as providing facts--it's too obvious any "facts" are cherry-picked--if not totally misleading--or dead wrong.

Next time, try citing an actual article.

Your credibility needs some work.

Subject: RE: BS: The Bailout
From: Ron Davies
Date: 02 Oct 08 - 12:13 AM

Obviously, "irrational" was not aimed at BB.

Subject: RE: BS: The Bailout
From: M.Ted
Date: 02 Oct 08 - 12:18 AM

The numbers that our beloved Q offers from Wikipedia(which he is usually skeptical of) seem to have come from this document Income Taxes and What They Pay which is promulgated by Americans for Tax Reform, and seems to have been written by one Peter Ferrara, who served in the Administrations of Reagan and Bush. The actual source for the information is vaguely attributed to "Internal Revenue Service Data 2006"
and no method for deriving the percentages is offered, and no further descriptions are offered to clarify what the actual dollar amounts that the statistics represent. Also, the terms used in the piece, which are not terms that the IRS uses, are not defined.

The piece is full of goodies like this:

"President Bush further cut income tax rates for the lowest income taxpayers by 33%, while only reducing income tax rates for the highest income earners by 11%. That certainly did not favor the rich, contrary to so much silly, crass political rhetoric."

So Bobert is right.

Subject: RE: BS: The Bailout
From: Sawzaw
Date: 02 Oct 08 - 12:49 AM

"your implied arguement" It was written in the Washington Post in 1999.

Here is but one call for more regulation

Here are 10 more:

2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac.

2003
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE."

2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator."

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator."

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System."

2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system."

2007
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options."

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon."

Subject: RE: BS: The Bailout
From: Bobert
Date: 02 Oct 08 - 10:57 AM

TIA,

The figure I was referring to wasn't "reported" income by the upper 5%, which is grossly under-reported but the amount of wealth corraled by the upper 5%...

Income is not a fair baraometer suince the rich have so many ways to avoid paying taxes... Off-shore accounts is one way the rich hide hundreds of billions of dollars and it's all perfectly legal...

So here's the rub... If we tax wealth then the if 5% control 80% and pay only 57% of the taxes we have a mammouth under participation by the upper 5%... In other words, inspite of many flowery sounding anti-tax organizations, the upper 5% have never had it so good...

I, for one, would love to see the the off-shore loophole that rich people take advantage of completely closed and those hundreds of billions be subject to tax... I'd also like to see rich people have to pay for the stadiums for their sports teams rather than the working class... BTW, that is where George W. made his money in fleecing the taxpayers in Arlinton, Texas outta $16M... And these assests which the working class disporportionately and regressively end up paying for end up on the wrong side of the balance sheet and benefit the rich but for which the rich have not risked any capital...

Like I said, we should be taxing wealth and the upper 5% aren't pulling their weight... If they were then we wouldn't be in this mess and we'd be able to have things like national health care, daycare for single moms, R&D money for environmentally friendly energy producrion and lots of other stuff...

That is my point... Getting bogged down with the "phrasing" about how much the upper 5% pay misses the entire story...

B~

Subject: RE: BS: The Bailout
From: CarolC
Date: 02 Oct 08 - 11:11 AM

While I don't agree with the politicians who were against regulating Fannie Mae and Freddie Mac more thoroughly, if anyone is trying to suggest (and it appears that some are) that Fannie and Freddie are the cause of the economic meltdown we are currently experiencing, they are being dishonest. Fannie and Freddie are a small fraction of the problem.

The same politicians who were being so vocal about stricter regulation of Fannie and Freddie were also working very hard to deregulate the rest of Wall Street. And it's the rest of Wall Street that is the main problem.

Subject: RE: BS: The Bailout
From: TIA
Date: 02 Oct 08 - 11:23 AM

Right you are Bobert.

My beef is with the people who cite figures to show that "the wealthy pay most of the taxes" as if this is an unfair burden. Of course they do - they have nearly all the wealth. And, the burden is not only not-unfair, they are obscenely *under* taxed in many cases (e.g. your example of offshore wealth).

Our founders (having thrown off the yoke of governments run by a wealthy ruling class) tried to set up a society with no wealthy ruling class. But here we are. Where are the "strict constructionists" on this issue?   hmmmmmm.

Subject: RE: BS: The Bailout
From: Riginslinger
Date: 02 Oct 08 - 11:24 AM

Carol - Why do you think so. Everything I hear points the finger at the mortgage melt-down as the start of the problem.

Subject: RE: BS: The Bailout
From: Goose Gander
Date: 02 Oct 08 - 11:42 AM

So we're told, but only a small fraction of mortgages are in foreclosure - 3 to 8 percent - depending on whose figures you cite - and foreclosures are spread around demographically. So you can't blame Fannie and Freddie for bringing down the economy and expect to be taken seriously.

Is the problem a lack of liquidity in credit? I have a problem with this analysis as well. According to an article I cited earlier, there is a lot of money available for lending, but banks are skeered to lend it (waiting for the bailout like children on Christmas Eve?) . . .

Besides, has anyone considered the inflationary effects of all this 'out of thin air' money? Housing prices were ridiculously inflated due to (among other reasons) easy credit. There will HAVE to be an adjustment, unless we all think we can have our cake and eat it, too.

Subject: RE: BS: The Bailout
From: Amos
Date: 02 Oct 08 - 11:46 AM

Yes, but FMA and FMAC were not majo vectors in the mortgage problem--they were later in the cascade of events.


A

Subject: RE: BS: The Bailout
From: CarolC
Date: 02 Oct 08 - 11:49 AM

The mortgage meltdown was the start of the crisis. But Fannie and Freddie are hardly the only entities that contributed to the mortgage meltdown. Countrywide is the biggest mortgage lender in the US and it is in trouble because of subprime mortgages.

In 2006, more than 100 subprime mortgage lenders either failed or filed for bankruptcy. Since 2006, more than 280 major US lending operations have "imploded".

When US politicians try to pin all of the blame on Fannie Mae and Freddie Mac, they're doing so to deflect attention away from their own culpability in helping to create the crisis.

Subject: RE: BS: The Bailout
From: dick greenhaus
Date: 02 Oct 08 - 12:28 PM

Well, it may slide through the House, greased by $100,000,000,000 worth of pork, in the form of tax cuts to the wealthy. Innaresting how eagerly McCain, the arch-enemy of earmarking and pork, is to sign ,