Make no mistake: This was class warfare.

[JackRiddler]

The housing bubble popped and all these people saw their house values drop, prompting a wave of foreclosures.

This in turn put the subprime mortgage derivatives (mortgage-backed securities) at risk, prompting failures among banks holding too many of these mortgage derivatives and the danger of a domino effect and a financial sector meltdown.

The value of these securities could have been restored by bailing out the foreclosures directly. This would serve to make the mortgage derivatives less toxic, since they'd be carrying fewer foreclosures. The derivatives would become marketable again.

But the government chose to bail out the derivatives, instead of dealing with the foreclosures on the ground -- the root of the crisis. The derivatives actually remain toxic, because the foreclosures continue. The bailout doesn't solve the problem, it only transfers the still-toxic derivatives to the government's books (where we can pay interest on the loan we used to buy them forever). It also frees the banks to take the $700 billion and go speculate elsewhere.

Why wasn't the problem addressed in a way that might solve it, by making the same sum available to bail out people who are losing their homes? The only answer I find is that this is unthinkable, because those people are just that: people, not banks. In market ideology, people who fail to make mortgage payments are deadbeats. You don't bail them out, even if it solves the problem for the banks by restoring the value of the mortgage derivatives. Banks, however, are indispensable. If they make enough threats of imminent disaster they get the bailout -- even though it doesn't solve the problem of toxic derivatives and the crisis continues!

This is class warfare.

[Oregone]

1. And guess who's losing

[dhpgetsit]

4. We are not losing

We had another setback but we refuse to go away.
We will never rest until we have our government back from the corporate elite.

[Ghost Dog]

17. Good to hear that, dhpgetsit.

Rooting for that message here in Europe. :hi:

[rhett o rick]

60. Set back. Right. We will continue to accept "set backs" until there are

actually soup lines. Then maybe we will re vo lt. But I doubt it. Kiss your ass good bye, my friend.

[Donnachaidh]

108. the soup lines will be ignored or overlooked

The ministries in my area had to STOP accepting people to help early in September because they ran out of money. Do we hear this on the local news? HELL NO. We get puff pieces about how to save money by putting in slow-drip lines for the manicured lawns of the gated communities.

[soulcore]

2. I still want someone explain to me...

...just exactly how this helps "Main Street" America.

Sure, the crap stocks/derivatives get bought by We The People, credit flows through the system again, houses still get foreclosed, etc...

They just raped us of billions of dollars.

[JackRiddler]

3. True. And can that someone also explain...

Just how this even solves the financial crisis? Foreclosures continue, the mortgage derivatives (which total a lot more than $700 billion) continue to be toxic, banks will keep failing.

[bvar22]

34. credit flows again ?

That remains to be seen.

[Another Joe]

62. OBAMA LIED

and both he and mclame supported this. He has sold us out 2 times since july - totally unacceptable.

*Capitulated to the most unpopular president in US history, even when polls showed the public overwhelmingly was AGAINST retro telecom immunity. He had even promised to filibuster (back when he was a nobody and it looked like shillary would kick his ass). Even mclame and shillary knew better than to support that bill.

*Lied on a Friday in the debate with mclame and then ran tv ads all over the nation repeating the lie. Within 10 days, he sold us out.

[bean fidhleir]

5. Yep. Class warfare, naked and unashamed. And we're losing.

I don't know whether to be astonished, sickened, or both that so many people at DU seem oblivious or actually in favor of what's being done to us.

[JackRiddler]

10. Many people at DU may seem oblivious...

and some are for it for honest reasons, perhaps because they have adopted a certain mechanical view of how things work by virture of having a job in the sector. But look instead to the country as a whole: so many people were active in opposing this who hadn't done a thing all these years. That should be encouraging, because the game is not over, it is never over.

[bean fidhleir]

31. "the game is not over, it is never over"

That's a very hopeful thought, but I'm minded of the song whose refrain goes something like "this might not be the end of the world, but we can sure see it from here".

Do you recall Lovelock's example of the aircraft fire? Where people were told to stay in their seats and the only ones who died were those who obeyed? There are a lot of people around here who get very upset with anyone who's not obedient. Authoritarianism is a truly pernicious force.

[rucognizant]

101. Like those who returned

into the WTT when the loud speaker said it was OK. I've never heard a good explaination of that one. WHo was at the microphone?

[Norrin Radd]

6. kr

[snappyturtle]

7. What we need : JOBS! It's at the root of the mortgage defaults that &

deceitful practices. The subprimes are only a part of the mortgage crisis. There are many who lost jobs to off shoring and buy outs, etc. and medical bills too. JOBS!

[jtrockville]

8. Not just jobs... but GOOD JOBS - enough to raise a family on.

[snappyturtle]

29. I know we've lost good jobs...many, many good jobs. However,

many current jobs are good jobs at rotten pay. Too much profit goes to people not doing the actual work like the top brass and the stock owners. That's why we're told the economy is great. The companies ARE doing well,it's just their employees who aren't! Too much at the top has spiraled out of control and so many now can't keep up with their bills and God help them if they become seriously ill.

[tama]

46. Then

have none at the top, give nothing to stockholders, follow your heart and accept no compromise. Freedom is good, life as a free man is good. I'm living in paradise and no-one is excluded. Only difficulty is that it's too simple, just stopping to want what is impossible.

[Greyhound]

51. That was the entire purpose of the ITAA and I'm sure similar, corporate created,

industry organizations are the same. They were created to "legitimize" wage suppression through creating a surplus of workers.

I've yet to see someone study the negative tax revenue results of the millions of lost jobs and hundreds of billions of lost tax dollars, all so that enormously profitable corporations could become even more profitable while simultaneously slashing their own tax burden.


:kick:&R

[snappyturtle]

58. What you've yet to see probably is classfied....imho. nt

[tclambert]

71. What they keep forgetting is their workers are also their customer base

Employee salaries show up as a cost on the corporate balance sheet. Most business school students know going in that you're supposed to keep costs low. Therefore, a good businessman wants his employees to have low incomes.

But do you want your customers to have low incomes? No, of course not. You want your customers to have lots of money. But the workers and the customers are the same people. Reconciling this conflict takes deeper thought, and isn't addressed in B school until after many students stop listening.

[tclambert]

64. not Wal-Mart jobs?

The Wal-Mart model, emulated by so many other businesses, threatens to impoverish the nation. If you impoverish all employees, you impoverish everybody. And then who can buy your goods and services?

[Vattel]

99. It appears that

low pay has been compensated for by three things: buying on credit, working more hours, and, for those who can afford it, making money through real estate and other investments. The bursting of the housing bubble and the weakening of the stock market means that wages become more important, and there are limits to how much one can increase working hours to increase pay. Buying on credit when you can't afford to pay your debt is a short term fix. So we end up with trouble on Main Street.

[Donnachaidh]

109. Main Street is being forced to work for the Company Store

Wall Street had it's ass covered after it sold bad paper to it's foreign investors. Our tax money goes to payback those investors, and Wall Street retains the profit from selling the bad paper in the first place.

However - does anyone REALLY think the foreign investors are just going to leap back in and start buying questionable securities from companies that sold them CRAP in the first place? No investor is dumber enough to think that the government is going to cover future questionable investments. Sure - they're happy to get their money back - but they won't be buying anything with a potential *stink* about it from Wall Street for a long, long time.

We'd better be sure to count the silverware in the WH before we let Bush drive away. He's managed to steal everything *else* for his cronies. A little extra thievery won't even be noticed. :puke:

[TxBlue]

18. JOBS Good Paying Jobs Manufacturing Jobs - NO McJobs!

[snappyturtle]

30. I know what you're saying. No McJobs like low level service sector ones.

Strength in numbers! With so many unions gone and manufacturing off-shore we have been hung out to dry. Now the people have to group together to get MADE IN THE USA back! We will. How? I don't know...yet. See reply #29.

edit: Welcome to DU! :hi:

[spag68]

89. made in the USA

I know it's simplistic, but I in my own small way have started to do what I can. It's simple really look up madeintheusa.com and buy from there. I have bought clothing, body oils and tools from there and all have been good products. The cost is not Wal-Mart cheap, but if you are more then talk, then step up to the plate. Everything from jeans to socks. Channel-Lok pliers are made in Meadville, Pa. Stop the bs and do something constructive.

[rucognizant]

103. It is time for cottage industry.

Any one who CAN, should start manufacturing on whatever scale they can manage.
Hint. A woman on another blog is complaining AGAIN, that she can't find toys made in America. LAst xmas I told her about Roy Toys ( Machias Me. ) who handcraft lincoln (type) log cabin kits, using local labor, materials and even advertising. Run by the Grandson of the man who started the company. Reasonable prices.......just NOT widely advertised.
Then there's Mary Hoyer Doll Company Lancaster Pa. Run by the Grandaughter of the woman who started the company. Stuff is proicey but if you were going to buy American Girl Doll, go with Mary Hoyer, ITS NOT MATTEL!
If you hate what the FDA And Monsanto are doing to the food products.......are up on the nutritious elements. Make prepared food to sell.
There are only one or 2 bread products in my local supermarket that don't contain high fructose corn syrup.
Candy: now that M&Ms, DOve, Cadbury, are contaminated with the melimine milk from China, xmas coming! If I could afford to redo my kitchen floor & ceiling..I'd be in production right now. I make the best chocolate mint patties you EVER ate!
But toys.........Going to do that for this year.

[tama]

44. That is really stupid

jobs - aka wage slavery - is not what we want but freedom from all forms of slavery. Good life, happiness, time for love, song and dance.

[Laelth]

9. I am still shocked hat the House passed the bill.

I had hope that populist Democracy might prevail.

-Laelth

[intheflow]

11. Sad to have to K&R this.

But it's true, just as it's been true ever since Reagan was in office.

[hfojvt]

12. what are the classes again?

Bailing out somebody who bought a $200,000 or $400,000 house is somehow helping the working class? Do you know how long it takes a working man to save $5,000?

You cannot bail out the foreclosures of the past, the ones that have already made the derivatives toxic. Bailing out future foreclosures would not help the current level of toxicity.

Banks are pretty indispensible to the millions of working people who have savings and checking accounts in them.

[tnlefty]

16. I don't know about where you live, but when I look in the local

paper the foreclosed homes are in the $35K to a little above $100K. The people who bought McMansions seem to be doing fine. Many job losses in my surrounding area.

[nadinbrzezinski]

23. Where I live the mid range home is 330K

[Two Americas]

24. Detroit

Average home price has fallen to $20,000.

The rural people and the inner city people and the people in the older neighborhoods in the suburbs are suffering. But the people on the coast and the in relatively well-off suburbs around the country (and wannabes and sycophants) control the national political dicsussion. They want status and privileges as though they were upper class, but sympathy and support as though they were "everyday average" people. It is a relatively small, but extremely powerful group of people who benefit from this. The tail is wagging the dog.

[chill_wind]

37. Yes. The euphemistic "Main Street". Who are we really bailing out

besides Wall Street? Have you seen this?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4168807&mesg_id=4168807

[Another Joe]

66. OBAMA LIED

But take a look at what people But don't take my word for it, hear what they have to say about how he screwed people in public housing:

http://www.youtube.com/watch?v=NW12_OscRZg"

[Stellabella]

87. This is the second post of yours where you attack Obama.

This is the DEMOCRATIC Underground. If you don't support the Democratic candidate, watch it.

[TBF]

106. Are you the post police?

:scared:

[Stellabella]

113. What, I'm not supposed to stand up for our candidate?

Sheesh.

[Donnachaidh]

110. wow,

I'd expect this sort of reaction from someone who'd been here for awhile. :eyes:

[Stellabella]

114. I'm just surprised that no one else is even the slightest

bit upset about this. I may be a new poster, but I've been lurking for years. I've seen people get called out for a lot less than what that poster said.

[tclambert]

73. In the 'burbs, many houses have dropped over $100K in asking price.

[Beregond2]

90. I'm one of those "coasters," living in WA state. Jobs don't pay any better here than they do in

the Midwest; yet you can't buy a decent house here for under $250,000. I used to live in NYC, and had to work three jobs to afford a rundown old apartment that was six floors up with no elevator. So don't talk to me about our "status and privileges."

[Flatulo]

84. I live right outside Boston, and the vast majority of homes built

in the last decade were McMansions selling for $500k to $700k. These homes are surely not being bought by blue-collar workers.

These homes are also the ones with the most 'For Sale' signs on them.

Make no mistake, this forclosure problem is not just affecting the working poor - it's also hitting well-off people who nevertheless leveraged themselves far, far beyond what was sensible.

There's certainly plenty of blame to go around but Americans are living way beyond their means.

I consider this bailout a real kick in the groin to families like mine, who live in a shitty little house that we could actually afford, and in fact, have fully paid for.

[JackRiddler]

21. Even if a house costs $400,000...

which is (was) average for some metro areas, the point is the subprime borrowers usually didn't have that. This is why they were subprime, and most of them were your "working man" who took long to save the down payment.

Maybe you're missing the point of this thread. One course (ensuring against current and future foreclosures) actually helps against the problem of toxic derivatives based on those mortgages. Of course it would lower their "toxicity" over time. The other course, the course taken (buying up unmarketable securities with monies that the recipients will then disappear) doesn't actually solve the problem - only saddles the government books with these still-toxic instruments. Choosing the latter is evidence of class war on behalf of the recipients of the bail out, and of "trickle down" theory.

Your millions of working people who have accounts in the banks, presumably less than $100,000 each, are protected by FDIC, so that's a strawman. Many of them would be well-advised to switch to local alternatives and credit unions.

Finally, the class war is not, as your divide and conquer logic implies, that of the upper middle against the lower classes, but by the power elite among the richest one percent or less -- who own the majority of corporate stock and the majority of all assets as valued -- against pretty much everyone else. The idea is to further concentrate wealth in the fewest hands: a few thousand households.

[hfojvt]

28. sorry, but the facts are not on your side

the top 1% does not own the majority of the wealth. My data from 2004 says they own only 39%. The top 20%, however, owned 84% of the wealth. Perhaps those numbers are higher now, but logic also suggests that the recent tanking of the DOW is gonna hit the wealthy harder than it does the rest of us.

I think you are missing the point of the toxicity. These mbs' are already toxic. Millions of homeowners have already been foreclosed. That is water under the damn. So if you have $100 million in MBS (mortgaged backed securities), say Series 2006B47, which is a bundle of 400 mortgages averaging $250,000. Now they are considered 'junk' because 20 of those mortgages have gone into default and been foreclosed. Preventing future foreclosures does not do anything about their toxicity. It may prevent other MBS' from becoming toxic, but it does not do one thing about the current pile of toxic securities. No matter how many foreclosures you prevent after today, Series 2006B47 remains toxic. And that toxicity alone, may be enough to poison the institutions holding those securities.

Another thing is that they are not 'worthless paper'. Their value is currently unknown because of accounting rules. In the example I used, they are still worth $95 million, but that number would not be known in the real world. In the real world, anything less than $100 million would make them officially 'junk'.

As far as 'divide and conquer', that is also a real world observation, simple facts. The $60,000 a year person wants to whine 'I am not rich' but as far as I am concerned, they are. Those are just the facts, they make one hell of a lot more money than I do. Further, since I see them every day, I probably have more hostility and resentments towards them than I do towards the average CEO who is only a TV-star in my world. It is they who are living it up right before my eyes in their fancy cars while I walk and bike, and it is they who are more likely to snub me, mock me, or otherwise treat me like canaille. They don't know any of my friends, they don't look at any of my friends, and they certainly wouldn't condescend to speak to any of my friends.

And the FDIC? I have little faith in the ability of the FDIC to cover anything if the financial system melts down. Covering even 1/1000th of the insured deposits is probably far more than $700 billion. Indymac alone took a large chunk of their reserves. Nor do I believe that credit unions and local banks are somehow out of the system. We are all in this together.

[JackRiddler]

38. These are interesting points...

Start with your data from 2004. Does the top 1% declare all of their wealth? Don't they want to hide it from the potentially prying hands of the revenuers? There are many ways to value assets, is there no tendency to minimize valuations for tax purposes?

As you know, the joke about the superrich is that they can't tell you with certainty what they are worth. Does this 39% of the supposed total wealth they own include offshore accounts in holding companies that in turn control other assets? Or even simple foreign holdings in real estate or corporate equity? Please, it does not. Does this 39% in any way account for the way the top-money families also control vast, ostensibly charitable foundations (where 95% of the action is usually in the endowment, and not in the year's donations)? I've been informed by members of a famous robber baron family that they don't even own their suits - their foundation does.

What would happen if you subtracted one primary residence per household, for those who own houses? The supposed 61% of the wealth held by the bottom 99% is largely in their primary residences. It's not liquid. A greater proportion of the supposed 39% of the top 1 is in more liquid assets, like equity in corporations, which in turn control other assets.

The fact is, if it's 39% officially, then without a doubt the top 1% dispose of the vast majority of investable, convertible wealth: in short, the power in a capitalist system is theirs.

You bring up an excellent point in the attitude of the middle classes (the people you call rich because they make $60,000 which in a place like New York is a joke). Many of them do need to be taught a lesson by life, and they do tend to identify with the rich and not their fellow lower classes, but still, they are the primary targets of the ongoing class war of the super-rich (since they are also the taxpayer-mules who can still be plundered; the poor have little left to offer, they are the targets of the expanding police state).

By the way, there's no doubt that you and I are in similar circumstances, as far as net wealth or income is concerned. I'm close to the bottom too, and I certainly discern the same resentments and hard-hearted attitudes to the poor of many in the middle classes, whom I do not confuse with the innocent or the good. That doesn't change the other reality: the power of the top 10,000 or so households, who at any given time steer most of what can be steered within the overall economy, and who derive most of the benefits. A better future for all lies only in understanding that, and unity against the ruling class, as impossible as that may seem when you're being dissed by people who think they're better than you because they make a few thousand dollars more.

[hfojvt]

47. they don't derive most of the benefits

To an extent, income matters more than wealth, and thanks to the IRS, I have much more data on income. Of the 134,372,678 people who filed tax returns in 2005, 13,776 had income over $10,000,000. That's .01% of all taxpayers. They had 5.1% of the total income. Their average income was $27,313,795. That's pretty darn rich, whether they are 'wealthy' or not. The $313,795 part is almost more than I have made in 23 years of working.

Still, the 21,431 filers making between 5 million and 10 million are not doing too badly either. Neither are the 84,070 filers making over $2 million, or the 184,540 filers making over a million, or the 524,506 filers making over $500,000. That's more than a "few" thousand dollars more than most people make. In fact, it's more than 99.38% of other Americans make.

Still, a good part of the benefits of this society are going to the 31.5% who make between $50,000 and $500,000. They got 57.2% of the total adjusted gross income.

Granted, $50,000 a year does not kick nearly as much tail in NYC or any other major metro area as it does in my 'little' town. Heck, even within three miles of my house are $300,000 and $400,000 homes that you could not even dream about if you 'only' made $50,000 a year. However, even in NYC:

"Community Service Society, a nonprofit social service agency, said that "one-in-five New York workers earns less than $8.10 an hour. Three-quarters of those earning less than $8.10 an hour are living in poverty." According to a comprehensive CSS study, 52.6 percent of low-wage workers are women; six out of ten have a high school diploma; and more than one in ten is a college graduate. Eight in ten are people of color.

More than 600,000 New Yorkers earn between $5.15 an hour and $10 an hour. Some 56 percent of these low-wage workers have no health insurance for their families, 52 percent have no pension or 401(k) plan and 37 percent receive no paid leave."

In other words, a $50,000 a year person in NYC is still making almost 3 times what 20% of their fellow workers are making (although from the IRS stats, $50,000 could be income for a couple and thus they would only be making 148% as much as a couple who each made $8.1), and the benefit differences are even larger than the salary differences. Granted, they are a fair ways from being rich in NYC, but they are also a ways from being poor.

You are certainly correct, in that the wealth OWNED by the wealthy is not as significant as the wealth CONTROLLED by the wealthy. We agree that the wealthy have too much control over the government and the resources and income of society, but I disagree that the rest of us do not have squat. Even I, firmly in the bottom quintile, have quite a bit.

But especially the people in the bottom 19% of the top quintile have quite a bit more.

[JackRiddler]

50. Many good points, but you lose me at the concept...

that income matters more than wealth. At the topmost level, the "earner" usually has the power to choose what their income for a given year is. They can also choose where to show it, which makes the IRS numbers suspect for them. I'm sure many of the richest Americans actually reside officially in the Bahamas. Or own holding companies there through which they control other empires around the world.

At that level, wealth dwarfs income. If you sell $30 million of something (the income is only the difference from the price you originally paid) and buy $30 million of something else, this may translate into impacts on hundreds of other lives, as well as possibly having radical effects on your future wealth, without making any difference in your annual declared income (it may even show up as a loss by design). It's just a different world up there.

That being said, the details you give on inequality among the bottom 99 percent or so matter. It's also a different world between making $50,000 and $17,000 a year, but perhaps not that different: precarity is always only one or two steps away for someone making just $50,000. Insecurity is the lot of the bottom 70-80 percent, perhaps we can agree.

It's also a different world making $17,000 in New York as opposed to $500 in India. The pyramid is infinitely steep, and you can argue that people on the middle upper don't share interests with those just a few rungs down. But I don't agree that this changes an essential fact about capitalism: the richest few have by far most of the power to affect what happens, and their decisions affect everyone else, most of whom suffer some degree of economic insecurity even when (currently) prosperous.

[hfojvt]

81. I said that was arguable, that income matters more than wealth

clearly $5 billion in wealth is better than $25 million in income, because you can spend $25 million for 200 years before you have used up $5 billion. Unfortunately, I don't have the details on wealth like I do for income. Perhaps I should look up that report I read a few years ago and make a spreadsheet with those stats.

[JackRiddler]

91. I think that would be a great idea...

Perhaps one way of defining the most important dividing line as far as class is this: Those for whom wealth makes income in any given year entirely irrelevant, vs. those who must have income to get through the year, meaning income deriving from work or a profession, and not just income thrown off by holdings.

But in making such a spreadsheet, acknowledge that no existing numbers can possibly tell you the full story, not from the IRS, not from anywhere else. You have to make room for the unknowable, because we may not see it and measure it, but it's there: Offshore accounts. Holding companies. Foundations. Laundered money. Foreign real estate. Dummy companies. Black-budget, off-the-books deals within the spook world. Businesses in cash only. Charities and churches, no kidding. Intentionally undervalued assets. The power of owning a controlling share in a given corporation (equity usually being a lot less than that corporation's total assets). Things I haven't even thought of. The top 0.1% and especially those 14,000 households in the 0.01% are simply out of sight and unmeasurable, but they have most of the capital to throw around at the least risk in having their will done. And they are, to take one example: Paulson.

[spag68]

92. Go get him

I live on Long Island, and 60,000 a year salary is not rich. It is not the average workers fault that housing here averages 350,000, it is what we have to pay to live. Should we all move to somewhere and buy 25,000 homes? Everyone has to live somewhere, mostly determined by birth. The only stat that I know is the one about the top 1% controlling the most assets since the 1920 era.

[hfojvt]

97. and not everybody lives in NYC or a major metro area

sheesh, when I used $60,000 as rich, I was talking about my own town, not the whole frigging world, and even in this town our DNC field worker was saying that he made $60,000 and didn't feel rich and a Republican fool was writing in the paper how he makes over $100,000 but he is middle class, not rich. Sorry, but when the stats say you make more than 90% of households, you are not in the "middle".

And where you live is hardly determined by birth. My current location is now my 7th place in 6 states since I graduated from college.

[Another Joe]

69. YOU DON'T KNOW WHAT YOUR ARE TALKING ABOUT

it isn't the top 1 % that will get hit on the crooked swindle called Wall Street.

It will be the middle class that owned investment indirectly, managed by "professional" money managers.

The folks at the top knew what was comin' down long ago.

And in the JUST WHEN YOU THINK YOU SAW IT ALL catagory:

Some moron posts that someone else got their facts wrong and then proceeds to post totally bogus numbers and then blows it further out his ass by proclaiming the situation is even more to his liking now (without any evidence of course).

Buddy, not even you can keep your asshat on like this...

[Hannah Bell]

39. you might wAnt to check out today's report: biggest losses in COMMERCIAL real estate, not homes.

[earth mom]

13. We're in a class war, been saying it for years.

:argh:

[Greyhound]

111. Even DUs new found hero, Warren Buffet has been saying it since 1998.

Check out the sig line...

(Under the picture of Ms. Kucinich)

[Waiting For Everyman]

14. Damn straight it is, 30 years of it.

[ljm2002]

15. What I want to know is...

...how in the hell we can have a law on the books that doesn't allow protection of a person's primary residence in case of bankruptcy, but does allow protection of second homes, boats and any jets they might happen to own.

Can you say, "Of the rich, by the rich and for the rich"?

I knew you could.

[ravencalling]

19. drove by the McMansions on the way to work

McCain Palin signs in front of EVERY one!

[scarletwoman]

20. Well, duh.

One thing about all the bailout discussions here on DU

sw

[vinylsolution]

22. It's the last big heist....

... of the Bush / Cheney era.

Wrapped up in endless corporate media BS about 'the importance bailing out the US economy'.

It's really the rich stealing from us AGAIN, like they have so many times over the last 30 years.

I hope Reagan is finding hell to his liking....

[tclambert]

74. "We smell some loose change still in your pocket,

and we wants it. Yes, precious, we wants it, ALL of it!"

[tclambert]

75. That was supposed to be Gollum as Dick Cheney, btw.

[Vattel]

100. Damn,

I was sure it was Dick Cheney as Gollum

[Irish Girl]

25. The rich have been stealing from us for thousands of years

This is certainly nothing new. The rich have been siphoning the wealth to the upper 1% elite for thousands of years. The Top remains invisible and absolutely in control by these types of measures. They make the rules and we all play by their rules. And sadly, nothing will change until a currency without usury is established, which would mean abolishing fractional reserve banking. Compound interest and paying interest on loans is the tool that merely helps them transfer your wealth into their grubby hands.

Sadly the majority of Americans are completely ignorant of how banks function because you are not meant to know, and for good reason.

[dailykoff]

26. Yes, and it was a rout. We got slaughtered as usual.

Unbelievable stupidity aided and abetted by our Dem "friends" like that fat p.o.s. Barney Frank. Whadda sellout. :mad:

[Desertrose]

27. K&R

It just doesn't make ANY sense.

[mike_c]

32. error: you've already recommended this thread....

eom

[ooglymoogly]

33. Congress has just given Wall st. a golden parachute.

you have hit the nail squarely on the head.

[bvar22]

35. Error:

You've already recommended that thread.

[johnaries]

36. You are misunderstanding the problem the bail-out is trying to address.

You are correct about the initial causes, but there was another much more severe side-effect that is what the bail-out was trying to control until we could address the underlying problems. That was the credit freeze on short-term business loans that many businesses rely on to do daily business. Google "broke the buck".

As far as class warfare, the class war has been going on ever since the upper class starting pushing Trickle-down/Supply-side economics. We need to return to consumer-based Keysian economics, which is what Obama wants to do. But we have to have a running economy in order to do that. Or at least a limping one.

The credit freeze is the "doomsday machine" that the upper class inadvertantly triggered. It will destroy both sides. We need a "cease-fire" long enough to turn off the doomsday weapon, together. Then we can fight back, and win.

[JackRiddler]

40. Sorry, I don't buy that...

If there was about to be a liquidity crash, tell me how it helps to bail out those who wittingly for years pursued a course bound to lead to such a crash in the first place? They will take this money and use it to cover other derivative bets and engage in other speculations. Or disappear it. This will only serve to delay and worsen the next liquidity crash.

There are so many other solutions that weren't chosen because of class war. $700 billion could have been made available directly to businesses that weren't getting credits. It could have been used to start a new, public lending bank. It could have been used to buy equity in banks. It could have even been lent to some of the failing institutions, instead of being used to reward them by taking the assets that remain toxic off their books and freeing them to speculate elsewhere.

[johnaries]

96. There wasn't "about to be" a liquidity crash, there WAS a liquidity crash.

Google "broke the buck". It was never supposed to happen. It did.

There may have been other solutions, but nobody could think of any that would actually work. At least not in time. It needed to be done much earlier. As it was, it may have been done too late.

[Two Americas]

63. right

We cease fire, they never do.

[Greyhound]

112. You and many others didn't know and, due to the M$M blackout, certainly never heard,

is that the Fed has had the power to guarantee the commercial paper at 0% and remove any obstacle to banking processes.

This law was all about getting one last dip while our money was still worth a little. The moment that law was signed, tens of billions started flying from the Fed to the central banks of Saudi Arabia, Japan, and China, that was it's only purpose, to buy off the creditors until Idiot Frat Boy could make a getaway.

[gopbuster]

41. Maybe off base here but.....

I'm wondering if your thesis may be discounting the effect of the depreciation or devaluation of the physical property asset over the past few years i.e. the devaluation in property prices which would have directly effected the declining value of the MBSs pools on top of the foreclosures themselves? I understand what you are saying regarding "reducing the toxicity but I'm wondering how a continued fall in housing prices effects the lock up not only in the residential market but the commercial end as well. Who wants to buy anything that, chances are, is going to continue to decline?

How could the Gov have stemmed the tide of an asset bubble bursting and declining real estate values which I would assume directly effect the pricing of the MBSs?

Also, as far as class warfare goes, I wouldn't be so sure that there won't be quite a few rich taking hits out of this. There is always a winner and always a loser in the game of monopoly.

I posted something earlier, just some broad thoughts on the subject:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4164694&mesg_id=4164694


Just some thoughts

[JackRiddler]

42. I think that's a good point...

Real estate, commercial and private, has declined and will continue to decline, and so it's not just foreclosures but real estate prices pressuring the mortgage derivatives. What we're learning is that these derivatives should have never been allowed and deregulated in the first place, because when a crisis hits they take a housing price decline that causes damage on its own and multiply that damage in the financial sector. It's insane that so much of the financial sector is now leveraged off these derivatives. It's possible that no bailout proposal is going to have a positive impact and things just won't turn around until the housing sector works itself out and rises again (in 10 years?). The upshot is that the overall crisis is probably going to run the same course regardless of any form of immediate bailout.

The government's focus instead should have been on straight-up new investments (in sectors like energy conversion and infrastructure) in the Keynesian mode, unburdened by all these failed instruments. This amounts to acknowledging system failure and rebooting on a different program altogether - a New Deal - which is ideologically unspeakable.

EDIT: As for your other point.

Yes, some rich will lose anyway. There is gambling among the rich, with winners and losers, but the point is to keep the casino running. The house money in this case comes out of the taxpayers.

[gopbuster]

48. "a New Deal - which is ideologically unspeakable"

"but the point is to keep the casino running"

Points well taken

I don't think they can keep it running though as I put it in the post I linked to:
One great big game of monopoly with the endgame including both winners & losers by way of controlled demolition to mitigate the damage caused by the great unwinding and to balance the system back out.

I think the bottom up policies will come over time because they know it has to happen. It's just that it may be too little too late in the short term and much can be attributed to Republican obstruction. This is why getting a larger majority in our electorate is so important with new faces to stand up and monitor the activities of the Democratic establishment as well.

It took them years to get us in to this mess, it is safe to assume it will take years to get out of it.

The rich players have already taken hits. Bondholders, shareholders of failed co's and other losers on the shadow side will continue to take hits. I have a feeling it will be that many are and will be just as pissed if not more about what has happenned.

The problem lies in the final consolidation whereas the power & concentration falls into the hands of fewer but I don't see how it can be stopped? I question this because I'm not sure how this actually will play out or just how bad it will really get.

[rhett o rick]

43. Forgive me if I over simplify. Aren't "bubbles" actually Ponzi schemes?

I am not saying that they necessarily are always bad, but seems to me that all bubbles burst and usually the lower class bites it. Yes some rich do also, but they lose less percentage wise. Seems to me this bail out just helped keep this huge Ponzi scheme running a little longer.

[gopbuster]

49. Not sure if they can keep it going...it may be THAT bad....

Here is what I think:

One great big game of monopoly with the endgame including both winners & losers by way of controlled demolition to mitigate the damage caused by the great unwinding and to balance the system back out.

[rhett o rick]

59. They will keep it going for a couple of months. During that time they will loot as much as they can

They are killing the goose (the middle class) that laid the gold egg.

[Fire Walk With Me]

45. Has been, since Reagan and perhaps before.

Kill the unions, deregulate, privatize...the rich get richer and the middle class vanishes. You get Imelda Marcos all over again, and the rest of us in poverty.

They're lovin' it.

[Trillo]

52. Yes it is. Class Warfare and leverage.

The sub-prime problems wouldn't have rippled to the extent they did without the extraordinary leverage the derivatives reportedly have (I've read up to 40:1). Bet wrong under that kind of leverage, and it falls apart instantaneously.

I find it quite curious that if people buy a home outright, they essentially have 1:1 leverage against market fluctuations at the point when they sell and realize the gain or loss, but these corporations can have 40:1 derivatives on the same properties when "protecting" against a mortgage default! Hmm. 40:1 versus 1:1. Not Fair!

If they fail, why they're "to big to fail", so our bought and paid for government, in a reverse Robin Hood scheme, insure these corporations' losses with our tax dollars. The hypocrisy of any "fairness" language that exists in any bailout bill under such realities is huge.

[JackRiddler]

53. There you go, the leverage also tells the story...

The bailout tries to work on the 40:1 end, instead of the 1:1 end. Sounds doomed from the start, no?

[mckara]

54. Ahem! It Has Been Class Warfare Since Reagan

[Another Joe]

70. IT GOES FAR BACK BEFORE THEN

and it is deeply ingrained - if you think the dem party is gonna change any of this, you ain't paying attention.

And obama - just another fast-talkin' liar, reads his lines well, but dances for the same masters.

[Connonym]

55. As someone who lost a house in foreclosure this year, I'm revolted

I had it on the market, I tried to sell it but nobody was buying. It eventually sold in auction for the value of my mortgage but resold for less than I paid for it 8 years ago, at 70k under the tax assessment value (what a joke). I feel offended when people out and out say that it's my fault for buying more than I could afford. My house was modest and within my means at the time I bought it. In my case I think the issue had more to do with wages not rising to cover the cost of inflation. I'm trying so hard not to be bitter but my American dream is gone and I can't see any way I'll ever be able to own a home again.

Analysts keep saying that this buyout will benefit the consumer by making credit available. I say fuck the companies that unwisely invested. Screw them, if the problem is a shortage on lending then maybe that 700 billion would be better spent by the government getting into the business of giving loans.

[tclambert]

78. But if the businesses fail, you hurt owners of stock, not the execs who made the decisions

The stock owners are largely retirees and people who one day hope to retire, through pension plans, IRAs, and 401Ks. The corporate executives who made it all happen will give themselves bonuses for dealing with such stress, and give themselves golden parachutes to make sure their retirements are comfortable, no, luxurious, even if they drive their companies into ruin. To discourage such behavior in the future, they have to suffer negative consequences. But they are heavily protected.

[Connonym]

79. true, but I also think that stockholders should put a stop to executive excess

Executive salaries, I think, are really excessive compared with the average US income but then when you add the bonuses and golden parachutes along with it, well I think it's obscene and they should be reined in.

[tclambert]

83. Something has happened to the power of stockholders

over the past several decades. It used to be executives and boards of directors feared the wrath of major stockholders. But now, the major stockholders are mutual funds and pension funds. The managers of these funds are generally just hirelings who tend to blindly support the executives.

[mojowork_n]

56. Bingo, you nailed it. n/t

[billyoc]

57. We've been losing for 350 years. But only WE can decide when it's over.

[rhett o rick]

61. Not sure I understand. It's over, whether we know it or not, it's over. Sorry to break it.

There is no way not only to stop this massive redistribution of wealth to the rich, but impossible to turn it around.
Congress is our only hope. In a class war between the lower classes and the ruling class, who's side will the rich Congress critters be? 95% will side with the rich. They have already shown it with this so called bail out. We are screwed, and the sooner we admit it the sooner we can fix it.

[billyoc]

65. If you really feel that "Congress is our only hope", then yes, it's over.

For you.

[rhett o rick]

67. Ok, tell me please, how are we going to turn this around??? Please!! nm

[billyoc]

68. Industrial action. That's why it pays to go with the Union card, every time.

[grasswire]

77. have you ever heard of a national strike?

That's what people of other countries do when their government displeases them.

[rhett o rick]

115. Yes I have heard. Have you heard of Blackwater? nm

[tclambert]

82. No, historically, there are two ways this can go.

One is that the greed and selfishness of the privileged class runs wild, they forget that their privilege exists only with the consent of the masses, and the masses rise up in revolution, as happened in France, and Russia, and many Latin American, Asian, and African countries.

The other is that the privileged class remembers there is an unwritten contract between them and the masses, that they are permitted certain privileges in return for certain obligations. If they remember their obligation to help everyone else, the class war can end peacefully, with the two sides making common cause, trying to raise the standard of living for everybody.

The path of revolution sounds satisfying at first, satisfying to the thirst for revenge. But it seldom ends well.

The path of working together for the greater good is where progress and prosperity come from. But it requires abandoning the cult of selfishness and embracing working for the greatest good for the greatest number. Part of this has actually been proven mathematically, in the field of game theory, by such people as Albert Tucker and John Nash (the subject of the movie A Beautiful Mind). But the argument has to be won not on the mathematical level (no one listens), but on the moral, philosophical, and political levels.

We need a helluva President to bring about such a change. I hope Barack Obama will be that good. I don't know, maybe can't know. I just have hope. But I have no hope John McCain will even try.

[Name removed]

72. Deleted message

Message removed by moderator. Click here to review the message board rules.

[billyoc]

76. I don't need Obama to change it. I have my Union brothers.

[Forkboy]

80. What should we do then?

[tclambert]

85. It might, if he has the vision

of a Kennedy, or either of the Roosevelts.

[Name removed]

88. Deleted message

Message removed by moderator. Click here to review the message board rules.

[unkachuck]

86. if you're correct....

....then everyone who voted to support the bailout-lie and the bailout-bill made a very, very big mistake, intentionally....would our elected officials do that to us?

[JackRiddler]

93. I don't know about intentionally in all cases...

Clearly they were railroaded. Let's just say some of those Congress chumps making excuses about their vote on the Iraq war resolution were honestly frightened and deluded by the propaganda force applied to them from above. I don't buy that for a guy like Kerry, but I do for at least a few Joe Congressmen.

But the elephant in the room is Obama, clearly. He's no chump, he's no fool. But he's perhaps the least able to buck the pro-bailout elite consensus, because he's not in power. Imagine what would have been done to him if he had gone against the bailout, by the media, by the superrich, by the markets. I don't like giving him that excuse, after all he's got Rubin and the like as advisers. But the game is hardball - he can still lose. The sick thing is, by playing the bankers' game, he gets in power, albeit almost certainly powerless to do anything once there, assuming he even wants to. Has it ever been different? Welcome to representative democracy in the US.

[pedo]

102. see iraq war resolution vote of 2002

to answer your question, yes.

[upi402]

94. Yes it is. It has made me sick to hear "Dems" say there isn't a class war

...since the early '80s.

They are corporatists or they are cowed. Either way, we have no representation and no party to oppose the moneyed elites. And so it goes, as Linda Elerby says.

[happygoluckytoyou]

95. GOP = CHEAP LABOR... and nothing else matters.. they would hump a gator if they thought it helped

[Window]

98. KICK!!!

[mdmc]

104. yup

and the working class is gettin double teamed

[greyghost]

105. Damn straight. eom

[WatchWhatISay]

107. Here is what makes it even worse

So, I'm thinking, OK this looks inevitable, Congress is determined to get this passed, no matter what ordinary people want. Maybe at least Obama can do something about re-regulating when he gets in.

But then I hear the first alarm yesterday on some TV talk show. How we can't really regulate the banks NOW, they are struggling as it is, and they need to find ways to make money and boost their earnings, and regulating would just shut that down.

I'm afraid we will hear this point of view more and more, as a part of "eductaion".

[JackRiddler]

116. Last kick.