Tag: bailout

America has been stolen from us by our own filthy rich.  My grasp of the dismal science of economics is simple and unsophisticated but I’ve spent far too much time among thieves not to know theft when I see it.  In what is by far the biggest robbery in history, the ‘haves and have mores’ have taken not only all that we have, but all that we’ll ever have.  They have stolen the very future from our children and grandchildren.  If we continue to take it lying down, we deserve what we get.  

It wasn’t supposed to be this way in America.

Greetings folks, the start of new week and thus we kick off another episode of Manufacturing Monday!  Never a dull moment when it comes to covering stuff that either goes into the products you buy, or the impact that that consumption leads to. Now originally, I had these other items on bio-fuels, hydrogen cars, China and oil, and a few other things.  But I see now that my section on the bailout of the US automakers is so big, that the whole thing is too long.  So, if it is OK with you, I will post those items tomorrow.  

<sup>Cross posted on

The Economic Populist –

A Community Site for Economics Freaks and Geeks</sup>

Failure in war can be a bad thing.  Failure in business can be a personal loss, and in some instances a detriment to the economy.  With the recent calamity hitting the two largest mortgage lenders, not to mention other large American business concerns, it seems to a select few that failure is indeed a viable and good option.

A gamble with very high stakes is being openly promoted by adherents to a free-market orthodoxy.  These individuals, gaming on anger and the perceived loss of utility of these given enterprises, are pushing the public onto this wager.

Leave it to Paul Krugman to tell the hard truth about what needs to be done in this financial crisis.

[T]he important thing is to bail out the system, not the people who got us into this mess. That means cleaning out the shareholders in failed institutions, making bondholders take a haircut, and canceling the stock options of executives who got rich playing heads I win, tails you lose.

Not that the Fed shall listen, mind you; Ben Bernanke, like Alan Greenspan before him, cares about the laissez-faire swindlers who caused the latest financial meltdown.  Factoring in the taxpayers only counts for bailing out the criminals, not bailing out the system the crooks abused in order to flush the economy down the toilet.

Krugman goes on to caution:

According to late reports on Sunday, JPMorgan Chase will buy Bear [Stearns] for a pittance. That’s an O.K. resolution for this case – but not a model for the much bigger bailout to come. Looking ahead, we probably need something similar to the Resolution Trust Corporation, which took over bankrupt savings and loan institutions and sold off their assets to reimburse taxpayers. And we need it quickly: things are falling apart as you read this.

He’s right, of course.  Bailing out Bear Stearns might be the smart thing to do as an individual case; for better or worse, that bank is large enough that its failure could — as Krugman suggests — hasten the market panic that would make the Depression we now suffer (the one OpEdNews.com contributor Michael Fox wrote had begun back in November)  official.  But if it’s used simply as a model for bailing out the rest of the Wall Street rip-off artists, then we taxpayers shall have been forced yet again to foot the bill for the irresponsibility of Wall Street.  It’s like a mugging victim being told by a jury that the thug who robbed him wasted the cash on booze and women, so now the victim has to reimburse the thief.

If the Democratic nominee somehow manages to survive the general election in November and become president, he (or she) could do a lot worse than to ask for Bernanke’s resignation as Fed chairman, and offer the job to Professor Krugman.

The Dow Jones average was up 417 points today.  You know, because the US economy is doing so well, jobs are popping up everywhere and everything financial is coming up Roses!  

OOP’s.  My bad.  Here is the real reason.  

Here is the Headline and some input from CNNMoney:

Stocks surge with the Dow soaring 417 points as investors cheer reports that the central bank is pumping an additional $200 billion into the banking system.

Stocks rallied Tuesday as investors welcomed news that the Federal Reserve will lend up to $200 billion to banks and lenders as a means of loosening up tight credit markets.

According to early tallies, the Dow Jones industrial average (INDU) jumped almost 417 points, its fourth-biggest one-day point gain ever and the biggest one-day point gain since July 2002. In percentage terms, the gain of 3.55% was the best since March 2003.

The blue-chip index had ended the previous session at a 17-month low.

The broader Standard & Poor’s 500 (SPX) index climbed 3.7% after ending the previous session at a 19-month low. It was the biggest one-day percentage gain since May 2002.

What does this mean to you, American citizen?  Well, it means that the Federal Reserve is going to have to print more money in order to bail out the companies that, not unlike a Las Vegas gambler, placed all their money on number 18 on the Roulette wheel and the wheel stopped on 24.  Close, but a loser.

The Fed will make up to $200 billion available to a group of 20 big investment firms for a term of 28 days, rather than overnight. The program is being coordinated with central banks worldwide.

http://money.cnn.com/2008/03/1…