How a BailOut works FOR the RICH & CONNECTED.

[bvar22]

There are three stages of a BailOut Smash & Grab.

1)The first stage is using taxpayer money to payoff the bad debts of the most predatory and irresponsible of our Corporate institutions. Some of these bad debts are actually loans or investments made to themselves, family members, political patrons, cronies, or other connected insiders. These are usually buried in paperwork, 3rd Parties, or other obfuscations that will shield the true benefactors, and will remain uncollected after a massive, confusing BailOut.

Most people are aware of this stage. It happens on Television. The Congress has to openly direct public funds to the institutions of their large corporate contributors. They will do so proudly standing before the cameras, patting each other on the back for averting a grave catastrophe. The peons at their feet should be grateful for their heroism and great leadership.



When questioned about the wisdom of giving so much money to the people who caused the problem , the Saviors of America explain that they have taken "precautions" to "protect the taxpayers", and proclaim that the issue is too complicated for the little people to understand. However, upon examination, these "protections" are toothless, specify no direct penalties, have NO provisions for enforcement, and provide NO help to those struggling on the low end. Oversight is always provided by the criminals themselves, or their political cronies.

2) The second stage of the theft is mostly hidden from the public view. It deals with the disposition of the foreclosed properties that the taxpayers now own (or should own).

The "foreclosed" properties are shopped to insiders at greatly devalued prices, and in some cases, re-purchased by the same fucking people who defaulted at pennies on the dollar with the taxpayer picking up the difference!

Here is just one example from the S&L BailOut which is a basic blueprint for the Great Wall Street BailOut of 2008.

Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.

http://rationalrevolution.net/war/bush_family_and_the_s...

The above is just one example. It was repeated thousands of times. While foreclosed properties are supposed to be made available to everyone this rarely happened after the S&L BailOut. The ripe Plums were quickly picked from the trees before the public was admitted to the orchard.

3) The third stage of a BailOut Smash & Grab:
A portion of the taxpayer money used for the BailOut is returned to the very politicians who sponsored it, and sold it to the American People.
Nice work if you can find it.


Beware those who offer you solutions
to problems they themselves created !

[texastoast]

1. The goddamn thing is going to go through

In a very bad form.

We will be crying about this and it won't be long until we do. Too bad we don't really work to prevent it now.

[onethatcares]

2. Amen to that

the entire system is a set up for more and more for the "base, the haves and have mores".

You'd think we'd catch on by now.

[Hydra]

3. So basic and uncomplicated

As I told people...but they seem to enjoy running around screaming that the sky is falling.

I wish I could assess what they are going to charge me for this to one of those cheerleaders.

"You want to throw money away, be my guest."

[AntiFascist]

4. K&RRR, this needs to be rated up! n/t

[Karenina]

9. Current technical difficulties notwithstanding.

:kick::kick::kick:

[girl gone mad]

5. This is exactly what is happening.

We know that bank bailouts are almost never successful in preventing an impending economic crisis.

This is why they are trying to rush it through in the midst of a market decline and gin up the panic to level 10. The longer people have to think about, debate and analyze the situation, the less likely it is to pass. We're being hoodwinked again.

[earth mom]

33. Exactly. They are pushing the fear & terra for all it's worth.

And why wouldn't they for 800 billion dollars? :grr:

[JDPriestly]

6. Great post.

http://everydayecon.wordpress.com/2008/09/23/the-savings-and-loan-crisis-the-rtc-and-the-paulson-plan/

Interesting comparison of S&L bailout and the Paulson plan. Even with oversight changes, it is a rotten idea.

[barbtries]

35. the "oversight changes"

are a joke. 5 people, all bushies and paulson is one of them. he'll have absolute power.

http://financialservices.house.gov/essa/essabill.pdf

page 16.

[Greyhound]

7. Bingo! I posted 3 really awful things about the Senate bill from just the first 10 pages

yesterday on one of the "OMG! We have to pass now or Mad Max will get us all!" threads.

Not one response.

[RainDog]

8. also never hear any response to the issue of U.S. bonds

and those who see this as a six month band aid to put the bigger meltdown on Obama's watch... when the banks have already looted the treasury.

the passage of this makes me literally ill.

I think it is so bad for all of us. I hope the House will take up the idea posted here about using Freddie and Fannie and a fixed rate refinance for homeowners, instead.

I am also sad that so many democrats have agreed to this. Not surprised, just sad.

[Wiley50]

10. K&R nt

[mhatrw]

11. K&R n/t

[Swamp Rat]

12. k&r

[Hannah Bell]

13. k&r

"Jeb Bush defaulted on a $4.56 million loan...the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his partners paid. The taxpayers had to pay back the remaining 4 million plus dollars."


How the rich get rich...they're crooked.

[Irish Girl]

14. The rich suck the wealth from us to them ..

We now have the pleasure of watching it in plain view as our Treasury gets looted dry. They create a problem of panic, wait for a public reaction of panic, and then try to push through a ridiculous solution and hope we'll naively swallow it.

I'm tired of the lies and hope I'm not alone.

[leftofthedial]

15. this is repuke theft

and the damned corporate "democrats" are on their side yet again.

[Hannah Bell]

16. I tried the link on the Bush claim & find it's broken.

Do you have a source for the claim?

I accept the thesis, but I'd like to pin down the support. Thanks.

[chill_wind]

18. Try this one:

http://www.rationalrevolution.net/war/bush_family_and_the_s.htm

[Hannah Bell]

19. Thanks. I found the claim, but no evidence but the site writer's say-so.

It's a strong claim (& I'm quite sure the Bush's are capable of that kind of crookedness), I just want some harder evidence.

[chill_wind]

20. Background.

http://www.washingtonpost.com/ac2/wp-dyn/A35297-2003Dec27?language=printer

http://www.motherjones.com/news/feature/1992/09/bushboys.html

[Hannah Bell]

25. got it, thanks!

[chill_wind]

17. K & R. n/t

[Pooka Fey]

21. Great post. K&R

[johnaries]

22. Good try, but I think everyone is starting to realize

that this "bailout" is for everybody, not just the rich and wealthy.

We have to staunch the bleeding first, and then we can address the underlying problems that caused this problem. But we have to staunch the bleeding, first.

We can't solve the problem unless we save the patient, first. If we don't do something immediately, we ALL go down.

[chill_wind]

24. 45% hardly constitutes "everybody. "

Small Plurality Backs Bailout Plan
Support Declines as Anger Runs High

September 30, 2008


As Congress debated the financial bailout bill over the past week, public support for government action has declined. A new Pew Research Center survey conducted Sept. 27-29 finds a narrow 45%-38% plurality of the public saying that a government plan to invest or commit billions of dollars to secure financial institutions is the right thing to do. This represents considerably less support than the plan engendered immediately after it was first proposed. A Pew survey conducted Sept. 19-22 had found a wide majority of the public favoring government action (57% right thing, 30% wrong thing).

http://pewresearch.org/pubs/972/small-plurality-backs-bailout-plan


Poll: U.S. Concerned But Split On Bailout
CBS News Survey Shows That Americans Fear Effects Of Financial Crisis But Are Not Convinced Bailout Plan Is The Solution

Oct 1

Respondents are split over whether the government, in principle, should provide money to financial institutions. Forty-three percent say it should do so, while the same percentage says it should not. A slightly higher percentage, 60 percent, says the government should provide help to struggling homeowners; 35 percent say it should not. And 53 percent say they believe the bailout bill would be a burden on taxpayers, while just 34 percent said it would stop a collapse of the U.S. economy.

http://www.cbsnews.com/stories/2008/10/01/opinion/polls/main4492043.shtml

Wall St. Problems Viewed as 'Crisis' in Latest Poll

September 30


Overall, voters split about evenly on the failed bill -- 45 percent supported it, 47 percent opposed it. Among the reasons for the tepid public reception is that there is a roughly even divide about whether government efforts will prevent the financial situation from deteriorating further still.

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/30/AR2008093000450.html?hpid=topnews


I think it's more accurate to say at best that everyone is worried-- and paying very close attention.

[blindpig]

26. If that's the case

then doesn't that point to a fatal flaw in our system? That the people are in a position of dependence upon rich, and must acquiesce at every turn to the extortion of the rich for fear for their financial and even physical well being? How degrading, how far from slavery is this?

[Hannah Bell]

27. nope, they're not, they're pissed as hell. the question is whether the bastards

are going to be able to cow them into submission by shutting down the economy.

[bread_and_roses]

30. No, this is another transfer of wealth from taxpayers to the rich and corporations

Exactly as has been going on in various forms under Neo-Con/Lib rule for many years now. Don't you remember how Paulson fretted that even the (symbolically important but less-than-a-drop-in-the-bucket significant) limits on Exec pay and parachutes would make the original Bill "unacceptable" to the moguls?

Others have detailed in many posts what is so awful about this Bill, but the main point is simple - from our pockets to their wallets.

[BB1]

23. So where is the fucking revolution?

More precisely: When? And with whom?

Get me right here, I live safely tucked away in the richest part of Europe. But I worry for Africa and South East Asia as well as for friends in the US. I'd hate to see the country run to ruins by a bunch of assholes with SOB as a middle name. Besides: we get our share of the fall out. This week our govt bailed out a Belgian bank (Fortis) with 4 billion of my money. And my stocks fell 22% as well.

If that would be all (losing some money) it wouldn't even be that bad. But at the same time our govt is sending our boys to Afghanistan (14 killed already, of which one suicide) and relying heavily on guidance from Bush and Co. We sponsored the Iraq war, we comply with the absurd flying regulations, we freak out over Muslims because of the attention the media throw at it. All in all, we've been the US sattelite state since WWII, and we're running off the cliff at the same tempo as you.

Always remember: They'd kill for less. All we have to do is stand up. All together now.

[judasdisney]

28. Bailout = Handout

[MadHound]

29. On top of all this, the problems that he bailout will create are worse

Than the problems it is supposed to(and won't) solve. Adding this much debt will crash our bond ratings, meaning that there will be no, zip, zilch, zero, nada funding for the budget. No money for infrastructure, Social Security, defense, nothing. This will precipitate a crisis of epic proportions. Exacerbating this will be the very high inflation caused by the influx of cash, devaluing the dollar and hiking inflation up immensely.

The cure is worse than the disease in this case. Let's hope that enough Reps realize this and vote this travesty down. Contact your Rep and let them know.

[chill_wind]

32. And -- who bails out the Bailer-Outer?

FDIC thread.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4149205&mesg_id=4149205

[AzDar]

31. We get raped. They get rewarded.

:puke:

[VP505]

34. After reading this I can't help but

think I am about to watch the House do exactly that, the vote starts in a minute or two.

[barbtries]

36. i've been listening all morning

i'm just about certain it will pass, therefore i'm going to turn this off and will find out on DU. sad.

[HamdenRice]

37. There is so much wrong here, I don't know where to begin!

1. "using taxpayer money to payoff the bad debts" -- No they are using taxpayer money to buy non-performing assets. No where in the plan does it say that Treasury will pay banks' debts. They are purchasing debt, not paying it off. To a bank, a debt owed to it is an asset. The debts are the debts of homeowners, bundled in asset backed securities.

2. "of the most predatory and irresponsible of our Corporate institutions" -- I suppose you could call Wall Street banks among the most predatory and irresponsible, but they packed and sold these mortgage backed securities to other financial institutions, like commercial banks, pension funds and savings banks all over the country. The plan directs the secretary to focus on purchasing the securities of smaller, well capitalized banks and pension funds.

3. "Some of these bad debts are actually loans or investments made to themselves, family members, political patrons, cronies, or other connected insiders" -- The overwhelming majority of these debts are the debts of homeowners. I suppose that because many Congress people and Treasury officials are homeowners, their mortgages may be included, but because the debts are bundled in securities it is unlikely that anyone would know that their debt is being purchased by Treasury.

4. "foreclosed" properties are shopped to insiders -- The Treasury will initially own asset backed securities, not foreclosed properties. The bill says that the people who manage the securities and collect mortgage payments will be encouraged to take the bad mortgages out of the securities and directs the homeowners to federal homeowner assistance programs. Foreclosed properties are disposed of by companies that service the securities.

Whether the plan is terrible, bad, poor or fair is up for debate, but we should at least get the basic facts right. Almost nothing in the OP bears any relation to the reality of the situation.

[greyghost]

38. The economy will continue to fail, and payback is a BITCH.

[Naturyl]

39. RIP OFF. (n/t)

[Hannah Bell]

40. kicking since the bailout passed & the rich & well-connected will be scooping up the spoils.

we, meanwhile, get job loss, currency devaluation, inflation & national decline.

[bluesmail]

41. It's cyclical. A mere 3 decades later, after the one's who spoke

out about the S&L Scam are in all liklihood not around, or have credibility problems from being smeared, it's done AGAIN. Head Hurts, I am never getting used to it.