Archive for September 24th, 2008

Well – we were warned. We were told that the best thing for the Republicans would be an attack or some sort of disaster to hit the U.S. shortly before the elections – which are a short 6 weeks away. Is this what we’re seeing? Watch the news for what they want you to know. Check alternative news websites or news from outside the United States for what you’re not being told.

WASHINGTON – Republican presidential candidate John McCain on Wednesday suspended his campaign to help Congress craft legislation to deal with the financial crisis on Wall Street.

It appeared Democratic presidential candidate Barack Obama was also set to halt campaigning – and there were indications the two men planned to call on President George W. Bush to join them in emergency sessions to help pass a proposed $700-billion bailout of the nation’s troubled banks.

“It’s time for both parties to come together to solve this problem,” McCain, 72, said in a statement. “We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved.”

The unprecedented move by McCain apparently came after a Wednesday morning phone call with Obama about the financial crisis.

In a statement, Obama’s campaign said the Democratic candidate had initiated talks with McCain in a bid to forge a compromise deal that would allow speedy passage of legislation authorizing the federal government to buy up toxic mortgage assets that have triggered the financial meltdown.

“At 8:30 this morning, Senator Obama called Senator McCain to ask him if he would join in issuing a joint statement outlining their shared principles and conditions for the Treasury proposal, and urging Congress and the White House to act in a bipartisan manner to pass such a proposal,” Obama campaign spokesman Bill Burton said in a statement. “At 2:30 this afternoon, Senator McCain returned Senator Obama’s call and agreed to join him in issuing such a statement. The two campaigns are currently working together on the details.”

McCain said he would suspend his campaign and return to Washington. He has asked that the first presidential debate, planned for Friday in Oxford, Miss., be postponed.

“I am directing my campaign to work with the Obama campaign and the Commission on Presidential Debates to delay Friday night’s debate until we have taken action to address this crisis,” McCain said.

“If we do not, credit will dry up, with devastating consequences for our economy. People will no longer be able to buy homes and their life savings will be at stake. Businesses will not have enough money to pay their employees. If we do not act, every corner of our country will be impacted. We cannot allow this to happen.”

The developments in the presidential race came as Bush, facing mounting resistance on Capitol Hill to the bailout plan, was set to address the nation Wednesday night on the U.S. financial crisis.

White House spokeswoman Dana Perino said Bush wants Americans to “fully understand the depths of the crisis.” The president planned to underscore why he believes it’s vital for the government to rescue mortgage firms and banks that many people blame for plunging the country towards a full-blown economic meltdown, Perino said.

Bush’s address comes amid growing opposition to the bailout by Republicans, who believe the plan perverts the free market, and Democrats who want far greater government oversight of firms receiving help. Earlier Wednesday, Federal Reserve chairman told Congress financial markets remain under “extraordinary stress” and warned lawmakers must act to “avert what could be very serious consequences for our financial markets and our economy.”

But McCain said he did not believe Bush’s plan would pass Congress without substantial changes to the proposal submitted by the White House.

Obama addressed the crisis at a rally earlier Wednesday in Dunedin, Fla.

“We meet here at a time of great uncertainty for America. The era of greed and irresponsibility on Wall Street and in Washington has led us to a financial crisis as serious as any we have faced since the Great Depression,” Obama said. “They said they wanted to let the market run free but they let it run wild, and in doing so, they trampled our core values of fairness, balance, and responsibility to one another.”

From “The Gazette”

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The are taking YOUR money and giving it to wealthy, unscrupulous, greedy people who have proven that they cannot manage money. They have made bad investments, taken HUGE salaries, purchased multi-million dollar homes – and are being bailed out by the very people they have cheated. What about that seems like a good idea to you?

What U.S. could learn from China

It’s been called ‘financial socialism’, ‘socialism for the rich’, and ‘lemon socialism’. But whatever it’s called, the Bush administration ‘bailout’ for financial institutions is the greatest transfer of wealth from ordinary working people to the rich in world history.

The proposed program to buy a mountain of non-performing housing loans and other worthless assets from banks and finance companies will cost an estimated $700 billion to $1 trillion U.S. dollars.

This money will come from U.S. taxpayers, most of whom are ordinary workers. It amounts to taking around $2500 U.S. dollars, or 17,000 RMB, from every U.S. citizen – and giving it to the banks and finance companies.

The cost for each family of four is around $10,000 or 68,000 RMB. This money could have been used for health care, for improved education, for scientific research, for social welfare program; for environmental protect; or a myriad of other socially useful purposes.

Alternatively, it could have been used to cut taxes for ordinary people, or even to help them buy their houses. Instead it is being donated to banks and financial companies whose managements and owners are among the richest in the world. These measures represent a massive redistribution of socially -produced wealth from working and poor people to the rich.

Learning from China

The argument of the Bush administration – echoed faithfully by the U.S. media – is that there is ‘no other way’. The claim is that the U.S. system, and the jobs of U.S. workers within it, can only be safeguarded by this transfer of wealth to the banks.

In fact, this argument is incorrect.

Obviously the government must act to protect banking and finance in an economic crisis of this magnitude. But if banks are bankrupt or insolvent, a fair solution would be to buy or nationalize the banks themselves, *not* their bad debts. Then the taxpayers would receive something of value – a stabilized and accountable banking system belonging to the people instead of worthless debts.

In China, such a solution would seem almost common sense. With its socialist market economy growing at about 10% per year, Chinas’ government banks play a key role in providing a stable foundation for the financing of Chinese economic development,

But the possibility of taking over or nationalizing U.S. banks has not even been mentioned by any mainstream U.S. political figures or mainstream media.

Instead, up to a trillion dollars or taxpayer money is being donated to institutions whose managements have shown themselves incompetent to manage their own funds.

Perhaps the economic interests of the powerful wall street companies, one of whose former CEO’s is U.S. Treasury Secretary Henry Paulson, has something to do with this ‘blind spot’.`

Over the years China has resisted intense pressure from Paulson and other U.S. officials to radically deregulate its financial markets. They have lectured China repeatedly on how deregulation of financial markets, and letting foreign financial capital operate freely in China – as in the U.S. – was in Chinas best interests.
“An open, competitive and liberalized financial market can effectively allocate scarcer resources in a manner that promotes stability and prosperity far better than government intervention,” Paulson said in Shanghai in March last year. “Time is of the essence.”

Now even the U.S. has been compelled to abandon this ‘open financial markets’ approach. With the sub-prime crisis now expanded into a full-blown crisis in the western financial sector, knowledgeable Chinese experts are thankful that China never accepted this laisez fair prescription for financial regulation.

“The U.S. crisis reflects regulatory problems in the U.S. and innovative financial products that ignored basic economic rules,” former Chinese central bank deputy governor Wu Xiaoling told a financial conference in Beijing recently.”

“The U.S. crisis today would be China’s tomorrow if financial products such as securitization are introduced without proper risk-control measures.”

Chinas’ cautious attitude, government banks, and regulatory framework have helped China to restrict its losses and write-downs from the credit-market crisis to less than 1 percent of the massive global total.

The feasibility of bank nationalizations, closer regulation, and banning certain types of transactions, such as derivatives, which carry excessive risk are all lessons which can be learned from China.

Banks, financial companies, and the wealthy should not be allowed to unload their bad debts onto ordinary workers and taxpayers. It’s sheer madness to allow them to transfer a trillion dollars from workers and taxpayers to themselves.

By Eric Sommer
China
Beijing

We have had many e-mails  about the post below. If you haven’t read it yet, now would be a good time to do so.

There is one section that the author highlights in his remarks, but we want to make sure it doesn’t get lost in the haystack.

THIS is what you need to be aware of –

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.

Why isn’t this being shouted from every anchor desk from CBS to NBC to ABC to CNN to MSNBC? (We can guess why it’s not on Fox.) Where’s Lou Dobbs? Keith Olbermann? ANYBODY?!

Contact your Congressperson and Senators – tell them what you think of this plan.