2008 20
Robin Hood Bush?
Published by MartinVarsavsky.net in USA with No Comments
Yes, we all know that this is the administration that robbed from the poor and gave to the rich and there are countless examples of that. The most obvious one are the lucrative contracts given to friends of the Bush Administration in Iraq paid for by the US taxpayer. And this was generally true…. until the current financial bailouts. My view on what the Bush Administration is doing lately is that shock, shock, shock, they are stealing from the rich and giving to the poor.
I know most of you will think I am wrong. And I may be, as only time will tell. But allow me to make my point. My thinking here is that when confronting the property bubble, Wall Street analysts have underestimated the ability of the average US citizen to pay his/her mortgages. This has depressed the mortgage asset class beyond reason.
I believe that over the next 20 years, many of these “worthless” mortgages will turn out to be very valuable and partly or fully repaid. As a result, I think that by buying these mortgages on the cheap from Wall Street the US government will engage in a gigantic Robin Hood like effort and steal from the bankers and give to the average tax payer. Moreover, Paulson and the guys now at Treasury are bankers and they think like bankers. They are hired guns who make money for whoever they work for. And now they work for the US Treasury and they are making the deals of their lives, but, paradoxically, on behalf of the American people.
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Martin Varsavsky on September 21, 2008 ·
@ WIlliam:
William I don´t agree with your figures but I agree with your thinking that Paulson, Bush, do not want to transfer wealth from the rich to the poor. What I am saying is that unwillingly they are presiding over the biggest nationalization in US history. What is going on here will redefine the role of government. A party that was elected promoting small government is now making government´s role huge.
WIlliam on September 21, 2008 ·
Martin,
On May 30 2008, Richard W. Fisher, head of the Federal Reserve Bank of Dallas, spoke in front of the Commonwealth Club of California. In his speech at the club, Fisher remarked that the unfunded liabilities from Medicare and Social Security adds up to $99.2 trillion.
Please see http://intelstrike.com/?p=263,
As for CDSs, they were created by Wall Street almost ten years ago. They now total some $60-65 trillion and in aggregate are some multiple, and growing, greater than the combined net worth of the world. This is all over the net, you can easily do a Google search. Example:. http://seekingalpha.com/article/96332-activity-in-cds-market-works-in-the-fed-s-best-interest?source=feed
As for the propsoed measures by Mr. Paulson, it gives him complete control of all financial institutions in the US, with no accountability.
“Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.”
We can only hope that sanity will prevail in and Congress will rein in the Treasury Secretary.
Please read below the text of the proposed measure along with comments, as well as a video that explains it (I have nothing to do with this person).
http://market-ticker.denninger.net/
This has nothing to do with the poor ot giving back to the citizens, this has all to do with saving rich people. It is a sad history-changing day. By the way, the FED is a private, not public, entity.
ignacio on September 23, 2008 ·
Naomi Klein defends the opposite opinion in an article on the same newspaper: http://www.bit.ly/go
What do you think? I’m more in line with Ms Klein’s view, and don’t see a reason why Bush’s administration will change its conduct patterns: use crisis (9/11, Irak,…) to channel the taxpayer’s money to its friends.
Martin Varsavsky on September 23, 2008 ·
@ ignacio:
I am not saying that the Bush administration, who has consistently favored the priviledge is now trying to change. I am saying that they are failing at everything they tried to do including favoring the rich. Indeed many rich are quite worse off thanks to their mistakes. And now with this massive nationalization that is about to take place the Bush administration is reluctantly becoming extremely interventionist.
ignacio on September 23, 2008 ·
…they are failing at everything they tried to do including favoring the rich.
😀 LOL
Javier Mares Romero on September 24, 2008 ·
Hi all,
What do you all think about taking equity form the companies being bailed out? Or have them mark down the junk securities, and take loans from the treasury if they become illiquid or threatened? (ideas from Peter Defazio http://www.youtube.com/watch?v=ANGsBNMY1_c )
Can someone explain why Paulson requires all laws are waived, that there is no oversight, no conflict of interest rules, no court review? I don’t see any legitimate reasons for that. Maybe he’d claim that other people are not capable of seeing the right path so he has to force this through to save the economy.
Martin, I see how the bail-out could benefit the taxpayers, but how would Paulson fail at favouring the rich? Are you suggesting a win-win scenario?
Surely we all agree that there need to be consequences to this. How are these changes going to be incentivised or enforced? For example, Martin, in your other post you said “traders should have built their hedge funds and not gamble with the whole investment bank.” Do you think this and other changes will come by without the state taking equity assurance or extending loans to these banks?
PS. Defazio claims that with the Paulson plan, the taxpayers will, at best, break even.
Thank you,
Javier
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WIlliam on September 21, 2008 ·
Martin,
We are beyond the point of no return. These $700B won’t make a dent on the $65T of credit default swaps or on the $99T of unfunded liabilites of the US government.
BTW, these people you defend (Paulson et al) own many billions of dollars of stock of GS/MS/C/WB/etc. Do not for a minute think they are trying to give to the poor.
“And I want to thank you, Mr. Secretary, for working over the weekend. You’ve shown the country and the world that the United States is on top of the situation. Secondly, you’ve reaffirmed the fact that our financial institutions are strong and that our capital markets are functioning efficiently and effectively.” – George Bush 3/17/2008″