Dear Friend and Reader:
I SPENT SUNDAY evening with my selected family of friends, pulling together a little cacciatore, wine and a salad of dandelion greens. Even though this evening felt a lot like all our years of evenings together making and enjoying food, laughing and pushing each other’s buttons, this evening had an air of pensiveness and uncertainty.
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$10 bill/The US Treasury. Photo by Musely.
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Even thoughВ most of us at this dinner party have jobs and some of us are securely in retirement, there was a sense of unease as we broached the topic of what happened on Wall Street and at the White House.
There’s really no precedent for what’s going on — at least in our lifetimes. And none of us had a clue what to do next. It felt as though we could not bring ourselves to think that there may be a problem facing us so insurmountable that nothing we’ve done before could help us out now.В Was there something out there we’re not seeing that’s about to fall on our heads?
What does the financial crisis and breakdown of last week really mean for us? What is it that we can do? Or are we in no position to do anything at all? As Eric mentioned this morning, with the whole deal going down with Mercury retrograde, we’re in prime territory for skimming a little cream off of the hundreds of billions that are about to change hands.
To re-cap [as we covered in detail Friday, see Full Moon Over Wall Street], Wall Street giant Merrill Lynch avoided collapse through selling itself to Bank of America, while Lehman Brothers filed for Chapter 11 after its big boss earned nearly half a billion dollars the past 15 years. The federal government has agreed to bail out major Wall Street company American Insurance Group, adding it to the list of companies which includes Fannie Mae and Freddie Mac as recipients of government largesse by rescue using taxpayer dollars.
Late last week, Treasury Secretary Henry Paulson announced the White House plan for the bailout. As Paulson proposed, the plan requests from Congress a massive Wall Street bailout package not to exceed $700 billion with minimal or no oversight other than the Office of the Secretary of the Treasury and no protection for you and me, the taxpayers. The original proposal was just three pages long, heck, shorter than a Discover card contract. And the White House wants Congress to pass this legislation pretty darned quick.
We will stop right here.
This is the same White House which brought us Weapons of Mass Destruction, produced evidence of Saddam Hussein’s direct link with the destruction of the World Trade Center and the subsequent cause of the decision to invade Iraq, the Katrina disaster, the campaign to privatize Social Security — this same White House is proposing use of taxpayer dollars to stem the economic crisis in our country’s major financial center with no accountability to anyone outside the White House.
Okay.
Fortunately the reaction has been highly skeptical, as evidenced by Paul Krugman’s op-ed in this weekend’s New York Times:
The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
I hope I’m wrong about this. But let me say it again: Treasury needs to explain why this is supposed to work — not try to panic Congress into giving it a blank check. Otherwise, no deal.
Representative Bernie Sanders was much less circumspect: “This proposal as presented is an unacceptable attempt to force middle income families (and our children) to pick up the cost of fixing the horrendous economic mess that is the product of the Bush Administration’s deregulatory fever and Wall Street’s insatiable greed. If the potential danger to our economy was not so dire, this blatant effort to essentially transfer $700 billion up the income ladder to those at the top would be laughable.”
I don’t know about you, but last week’s feeling of shock is getting replaced by numbness. Listening to Paulson on the weekend pundit shows, and talking to my friends at dinner last night, I was feeling a queasiness the cause of which I couldn’t place at the time, but now I can.
It’s the feeling of being deceived yet again and yet not quite certain whether it’s you or the other causingВ your sense ofВ vast internalized dismay. It’s happened before,В the same feeling of the beleaguered spouse of a severe alchoholic when the partner comes home after yet again another binge, begging forgiveness andВ assuring you thatВ somehow, redemption and sobriety was just around the corner, if only you would help. You’ve seen this scene time and again, and you have little confidence anything will change.
Today might be a good day to call your Congressperson. Let them know what you think.
Yours and truly,
Fe Bongolan in San Francisco
“One reason people aren’t talking is because they can’t tell if this is is really happening or if it’s a television show.”
JanesD:
Boy did you say a mouthful. Knowing what is true would help alot. Maybe then, we can re-gather and know what is real and truthful once more. And maybe begin to trust.
Its so odd we’ve been living this way for so long.
” I think sometimes we cry alot because because the rage is too much to handle. I do that too. I term it vast internalized dismay that things have gotten so out of hand we can’t quite believe what is happening to us. ”
Nodnod. Even though I think Americans have been bent for years by Fisher Price journalism. There are these graphics on television with little marching men and maps that light up pink and purple; there’s a documentary on genocide with big swoopy arrows pointing to the gas chambers and this puts us in control. Some general in an actual *helmet* biting out fake troop positions from the Fox News Command Center. We get injected with a power fantasy that keeps us powerless the way all fantasies do. One reason people aren’t talking is because they can’t tell if this is is really happening or if it’s a television show.
What is happening to us? I would really like an answer to this question, speaking of not speaking. What *exactly* are the consequences of this “crisis” without a bailout? Strange, isn’t it, that these people refuse to even name the horsemen apparently charging right at us?
Anyway thanks for writing back.
~j
JanesDefense:
More than anything, the decisions made in the halls of power need our aggressive scrutiny. That means we have an opportunity here to overtake years of the incompetence and greed that’s overrun this country through the Administration in power (I refuse to call him the President because I don’t believe he was elected.)
Reading the papers on both sides of the aisle, the growing consensus is that the taxpayer should not be rushed or pushed into this deal, which is what Paulson and Bernanke are trying to do.
They are also selling it as a crisis, similar to their failed attempt at privatizing Social Security in 2006. Yes there IS a crisis, but I understand its less of a credit crisis and more a liquidity crisis. But do we need to foot the billion at the sweet cost of $700 Billion? I think cooler heads need to prevail.
Also, do not underestimate the same regime that uses crises to manage public opinion. Like 9-11, WMDs and Saddam. They are in an extremely vulnerable time and desperate to hold onto power. Their Figurehead in place has a 19% approval rating and their Figurehead in Waiting could croak at any time.
I think sometimes we cry alot because because the rage is too much to handle. I do that too. I term it vast internalized dismay that things have gotten so out of hand we can’t quite believe what is happening to us.
But we still have ourselves to trust, and there are alot of US out there. Have faith, brother. You’re not alone. We’re watching, and ready to yell when the time is right.
I feel like I’m on the verge of tears almost all the time the past couple of days.
Mssr. Fe, no one I know is talking either. It reminds me of the days after 9/11, when people would sort of swim around each other, disoriented, just…lobotomized by this Go Away bomb that wiped out a huge chunk of reality one fine September morning.
This weekend my Sagittarius brother poured me a glass of buttered tobacco-flavored chardonnay he’d been saving for some special occasion and said, it’s so bad, you can’t even talk about it. Now when in our lifetimes has anything ever been that bad?
Did you read this, amigo? Couple days ago, watch the graphs near the bottom.
http://www.minyanville.com/articles/Paulson-banks-US-bailout-treasury-TAF/index/a/19114/from/msn
~j
Here in Australia, we have been assured that our savings are ‘safe’ behind regulatory firewalls on the banking industry. Okaaaay. The Press has been complicit with the ‘nothing for you to see here – move along’ type articles and the headlines for the past few days are mostly about local Aussie politics.
Then I received a call from a friend who works in ‘securitisation’ at a large banking institution here in Sydney. He told me he was ringing from an unmonitored phone line because the regulatory authorities had his bank under surveillance for misdeeds in another banking scandal that happened a few months ago here. He said that his bank was ‘molten chaos’ internally and he has never seen anything like it before. But the reason he rang was to warn me to move any cash I may have in an investment bank that was tipped to fail and that everyone one in the financial industry knew about.
So much for the ‘free press’. Murdoch hails from Australia, you know, and I have been so grateful especially this past few days for the access to information the internet stills gives us. Everyone please take a moment and appreciate this lifeline in a collective, complicated world.
And one final puzzle piece – The US Federal Reserve Bank was granted its charter in 1913 for 100 years.
Guess when the charter comes up for renewal? 2012
And just like the pre-1913 market destabilisation shenanigans the banking cartel poured on in our grandfathers times – so we too could be witnessing the same manipulative gyrations of the lead-up to renewing their contract. As I recall from history lessons, their plan then was to bring the market to it’s knees so we would be so friggin’ scared, poor and tired that we would be grateful to hand over control of our monetary supply to them. And we did.
The banking cartel’s greatest fear is that the US Treasury (we the people) will start printing our OWN currency again – not borrowing it from them at interest rates that will cripple generations to come. Abe Lincoln did it – it was called the greenback – and it was hugely successful in the colonies.
Shall we dare to try to unshackle ourselves now?
Here’s a virtual pitchfork: (sign the petition to Congress)
Action Page: http://www.usalone.com/help_people_instead.php
marymack:
Please, I hope you continue your letter to Case and Spector. There needs to be a virtual torch and pitchfork rally on Congress, and Washington, if not an actual one. Lobbyists for the financial industry need to know that the jig has got to be up for the last thirty years of a free, de-regulated ride. They need to know the public is onto them.
Thank you, Fe. I didn’t know this. I’ve spent the last half hour on my letter to Bob Case and Arlen Spector. I will check out Dodd now.
What’s stunning to me is not just the hubris of these thieves but the all-out macro-mega-grab going on here. This is nothing short of a white-colar rape.
marymack:
Let’s hope this is the wake-up call we need to move this country out of its sleep.
If you’re into googling what’s happening out there about this in Congress, check in with what Senator Chris Dodd proposes as a new legislative incentive to address the financial crisis.
Word is it gets alot closer to what’s needed with more attention paid to those of us on the ground.
OMG sums up my situation pretty nicely. Rather than go into detail of my own life circumstance, let me just say that I hear you and will get to my .gov page asap.
I am furious at the millions that Wall Street execs are running off with, only to be handed this bailout without questions (talk about a bridge to nowhere!!) makes me crazy-mad. The fact that Republicans I know and love will continue to think of their party as the one standing for smaller government and the Dems as the spending party, well, I’ll have to put that aside for now. This is beyond shameless, using this nightmare to continue to gouge all of us is or should be ACTIONABLE.
mm.