Wall Street walked away fat and happy...

[WhiskeyGirl]

America’s Economic Crisis Back to Slices 

A New Paradigm For Those At The Top

Armstrong Williams December 29th 2008

In many ways, the actions and antics of Wall Street through the years have precipitated the unraveling of our economy and the financial well-being of millions of Americans. "Deliberating," they call it. Nice name, but it doesn’t soften the blow. Wall Street has always been at the heart of the financial or asset bubbles that inevitably pop. Wall Street has served as an enabler that pushes toxic financial instruments into the hands of the unknowing: those in awe of the Wall Street institution. This phenomenon is like drug lords who bring illegal substances to market but don’t use the drugs themselves. The motivation is always the same—money.

The only constant in this paradigm is that Wall Street walked away fat and happy or at worst slightly bruised. Wall Street was finally forced to open its kimono, and we got a disheartening view that there is not much to impress us and there probably never was. The reality is that Wall Street is home to one of the largest concentrations of the best and brightest financial minds. But the problem is they are not as smart as they think they are, which is evidenced by collapse after collapse of the most venerable financial institutions and the near failure of our financial system. When did it become okay for the titans of industry to walk away with tens of millions or hundreds of millions of dollars in compensation, while our investments get anemic returns? It doesn’t matter how smart you are if your moral compass fails you and your value system makes you succumb to greed.

Wall Street and the Big Three have failed the American public. They did what they do best—make money off unsustainable and broken business models and reap the rewards by convincing their Boards, regulators, and the American public that they have earned such extravagant and baseless compensation packages. Who can’t leverage their company and run it into the ground while getting paid tens of millions of dollars? It is insulting—not impressive—that a number of executives are willing to work for a salary of one dollar for the next year. Merrill Lynch, recently sold to Bank of America, posted a $20 billion loss and announced cutting bonuses by 50 percent. Why is anyone getting a bonus?

Who get's stuck holding the worthless stock?  Paying for unemployment?

...Congress and corporate boards need to stand up for the American public and their shareholders and demand reforms. It could be one of the best investments they make. As with any problem, if we put our heads in the sand the issues will only haunt us and come back to bite us elsewhere later. Congress has an unprecedented opportunity not only to prevent a meltdown of our financial system, but to seize this chance to demonstrate that it learned from its mistakes—that is, unless they too, succumb to their pride. Otherwise, it will be just a matter of time before Wall Street and corporate America misbehave again and Uncle Sam and the American Taxpayer will again have to step in—to save Wall Street and corporate executives from themselves.

Cutting Edge commentator and syndicated conservative columnist Armstrong Williams can be heard on the "The Armstrong Williams Show," broadcast on XM Satellite Power 169 and syndicated by Sinclair TV Network. He can be reached at www.armstrongwilliams.com.

http://www.thecuttingedgenews.com/index.php?article=997&pageid=44&pagename=Slices

It seems like taxpayers have been bailing everyone out for years.  The money comes from their paychecks, lack of prosperity, high price of housing due to speculation, from the losses to their 401k's. 

The nation is broke.  There is no way to pay for current and future entitlement programs, Social Security, Medicare, etc.  Shovel read pork projects are just jacking up the debt even higher, and there is no revenue stream.

jmho

[WhiskeyGirl]

When will bailouts end?
What the White House didn’t want to hear

Independence Institute, Colorado Libertarian Think Tank
Monday, December 29, 2008

I’ve participated in White House conference calls on a number of issues in recent years. While I have not always agreed with President Bush’s position, my views have always been treated with respect. Recently I participated in a conference call to discuss the “President’s Announcements on Auto Loans.” When I expressed opposition to this bailout of auto firms, my views were summarily dismissed, and I was cut off so that other participants sympathetic to the president’s plan could speak. President-elect Obama claims that only one “outside” economist has expressed opposition to the stimulus plan and bailouts.

Setting the record straight

It’s important to set the record straight on opposition to the stimulus plan and bailouts. I am not alone in my views. I spoke with more than a dozen economists attending a recent meeting of the American Legislative Exchange Council who oppose the stimulus plan.

Why not ask all the states to pass voter referendums for all this funding?  Take it to the common people?  Let state voters decide if the bailout debt bondage is necessary?

...the bailout creates additional uncertainty and shifts losses to taxpayers. The conditions the president has imposed as part of the bailout are not worth the paper on which they are written...auto manufacturers have an incentive to sign on to the bailout plan because it promises a better outcome than one that would result from bankruptcy proceedings. The initial bailout of auto firms is likely to be a down payment on a larger stream public subsidy to these firms at taxpayer’s expense. If conditions imposed on the bailout by the Bush administration are too onerous, auto firms can always renegotiate those conditions with the Obama administration.

This sounds like "privatize profits & socialize losses".  When do taxpayers come out ahead?  When do taxpayers get relief?  Is there a Rolaid big enough for the Obama Shovel?

No salvation/bailout/job/hope for the common worker, unemployed, working mother, recent graduate...

...This expenditure of taxpayer dollars for corporate welfare has not been lost on other interest groups. In fact, it has set off a feeding frenzy in which other interest groups are now scrambling to the public trough.

Is my check in the mail?

Failure to understand

What President Bush and President-elect Obama fail to understand is the difference between policies to provide liquidity in financial markets, and policies to prop up insolvent financial institutions. The solution to the current financial crises does not depend upon bailouts; financial markets will be on a sound footing only when insolvent financial institutions are restructured. The precedent for this solution to the financial crises is in the Resolution Trust Corporation established to restructure savings and loan institutions in that financial crises. Insolvent savings and loan institutions were restructured; while increased liquidity was extended to solvent institutions. The moral hazard created when insolvent institutions are propped up with bailout money only exacerbates and prolongs a financial crises.

What President Bush and President-elect Obama need to say to auto executives, state governors, university presidents, bankers, and other lobbyists for bailout money is the advice my swimming coach gave me when I was struggling: “SUCK IT UP.”

Barry Poulson is a professor of economics at the University of Colorado and a fiscal policy analyst for the Independence Institute, a Golden-based libertarian think tank.

http://www.thedenverdailynews.com/article.php?aID=2863

I think all these bailouts just push the national collapse down the road.  Pretend that they're working hard to stop the dominos...when they start falling, nothing stops them.

Just feather their own nests and those of their political friends and special interests.  I think that's why SOME allowed the abuse of Freddie/Fannie to continue.  It kept the auto and construction industries going when they should have slowed down and retracted. 

Now, the Obama administration is trying to start the dead elephant in the room by fueling the construction industry.  The elephant is past life support efforts.  Have to wait until it's dead a buried and a new one takes it's place.  Maybe twenty years from now?

jmho