It’s 2014! How about that “Hope And Change” from Obama and his wonderful team? How is the Affordable Care Act treating you?
Just how amazing is this new law? Forbes is saying that individual premium rates will increase by almost 100%.
In Tennessee the rates appear to be going up even more than that.
In Alabama many residents are receiving notices that their insurance premiums will soon double.
Here’s a descriptive excerpt about how a single mother of 4 is being affected in the Alabama story:
Stay-at-home mother of four, Courtney Long, was shocked when she received a notice from Blue Cross Blue Shield of Alabama stating that come January her family’s individual health insurance policy premium would increase from $352 per month to $796.
“It’s devastating. I started crying,” said Long. “I mean, we have worked so hard to get out of credit card debt, get ahead on the car loan, transfer our mortgage to a 15 from a 30 year mortgage… and for what?”
Long’s story is not unique. Many have received this same letter – alerting them their premiums were set to double (anywhere from $290/mo-$599/mo up to $603/mo-$1060/mo). That’s quite a jump! So, the “Affordable Care Act” is affordable for whom?
I am interested in hearing from people both for and against the Affordable Care Act.
Charles Krauthammer says that Obamacare is a massive transfer of wealth from the Young to the Old in our nation. Here’s why.
Let me know — how is the Affordable Care Act affecting you?
I can only imagine how bad it is in Egypt. I certainly don’t claim to understand the situation on the ground. Widespread unemployment and poverty. What jobs do come up are handed to family members of those in power. People are closed out of their economic society and their economic future. And they are sick of it. Enough that they protest, march, take to the streets, blog, and do everything that they can — risking being shut down, beaten up, tear-gassed, shot, raped, imprisoned, and killed.
I can’t say what I would do if I lived in a similar situation, but I bet I would be protesting too.
I just hope that with all the talk of forcing Hosni Mubarak’s resignation, there are concrete ideas of what will replace the outgoing regime. I have read about groups taking advantage of the unrest to go around to the prisons and break out militants that were imprisoned. Citizens are banding together to protect themselves in the wake of organized police or military control. The National Democratic Party needs to be removed, but is there a plan for what will take its place?
There are many in America that are urging President Obama to seize this chance and oust Mubarak but it’s not that simple. Sometimes the resultant regime is not much better than the one it is replacing. It may buy you a decade or so, but that is not a long term solution.
I would like the US to understand the concrete plans and proposed solutions from groups like the April 6th Youth Movement and Mohammed ElBaradei’s team before we just throw our weight behind Whoever-Is-Next.
Just because this is the “start of a new era that cannot be reversed”, where are the checks and balances that give this new era a greater chance of survival and greater chance of freedoms for the Egyptian people?
From our friends at xtranormal. Definitely one of the best videos I have seen in a long long time.
Please post your thoughts or other links on the topic. After you quit laughing of course.
It’s the ECONOMY, Stupid!
Barack Obama’s White House has decided to back a Keynesian economic policy of “let’s get big government dollars to spend our way out of this economic crisis.”
Is it working? Absolutely Not.
Has Obama effectively lined his supporter’s pocket’s in the process? Absolutely.
When US Automaker General Motors was in financial trouble, the US Government effectively took GM over. As the US Gov’t reworked the company, it ditched the banks and creditors of GM, and transferred huge amounts of the “New GM Ownership” to Unions and other Obama supporters. It’s almost like when a new King started in England, and he decided to take enormous tracts of land from people he didn’t like, and bequeath enormous wealth to his new supporters. Basically it’s robbery, but legalized!
In the Federal Reserve minutes from their meeting last month, there were some very important words hidden near the back, in the small print: The Fed doesn’t think that the US Economy will recover for 5 to 6 years.
In other words, far from winding down the Great Recession and talking about the new Economic Gains that Obama has been touting this week, this shows that in the global economic crisis, the US is now becoming the problem.
The new Fed Reserve minutes show a complete change in policy, demonstrating how fast the recovery has lost steam. International Monetary Research says that the US authorities have “botched the policy response.” Oh really?
- New home sales at 300,000 in May, lowest since records began in 1963
- Outbound exports from Long Beach (major SoCal shipping port) dropped from 139,000 in May to 116,000 in June.
- Philadelphia’s new manufacturing orders index plunged to -4.3 in early July
So what will Barack Obama and his team of Economic Advisers do? According to Gabriel Stein of Lombard Street Research, they are “throwing in the towel.” Washington wants to start another round of government spending again — raising the debt level from $2.4 trillion, to a whopping $5 trillion.
Sound HOPEful and CHANGEful to you? Me either.
We need to get government deficit spending to stop before the dollar becomes totally worthless. Out of all the dollars ever created in the 234 years of USA’s history, over half has been created in the last 3 years.
We need to get the US Government out of the business of spending money on stimulus programs and bailouts. We have spent billions of dollars, and it hasn’t brought the economy out of the recession. Now we want to do it again?
The US Government needs to stop the bleeding. Reduce entitlement payments immediately. Reduce the size of the behemoth that has become our Federal Government, creating Czars of This and Czars of That, each with mandatory staff and spending budgets. We need to get out of the business of saving failing banks and businesses. Let the AIG’s of the world fail. Stop the bailout spending spree. And reduce the US Federal Income Tax.
The more money is in the hands of the individual consumers, the better. What, we won’t be able to afford all of the government programs? It’s okay. The individual cities and communities will pick up the slack, feeding the poor, helping them back onto their feet.
It’s what Americans do.
One evidence of a Ruling Class taking over a country is when the rulers go against the wishes of the people who have elected them.
Roughly 90% of Americans rejected the $700,000,000,000.00 ($700B) TARP bailout plan, but the Ruling Class pushed it through anyway.
We rejected the $40B bailout of AIG and trading partner Goldman Sachs – which subsequently grew to a $180B bailout – but the Ruling Class hid what they were doing and illegally used taxpayer monies to perform the bailout anyway. (The guy in charge of this one? Current Treasury Secretary Geithner. Nice.)
We the people also rejected a government take over of GM and Chrysler, but the Ruling Class went ahead and used billions of our dollars to do it anyway, paying preferred creditors pennies on the dollar, and transferred huge proportions of the newly formed companies into the hands of the United Auto Workers union. Yet another Chicago-style cronyism move by the current administration.
If this isn’t going against the will of the people, I don’t know what is. This is government taking power into its own hands and doing what it wants against the will of the people, making huge transfers of wealth and often – like Geithner – feathering his own bed in the process. I don’t know what you call this type of government, but it is not a democratic republic.
Can the US Government actually run a program without bankrupting it?
- Social Security ($17,500,000,000,000.00 underfunded; $17.5 trillion);
- Medicare Part A ($36,700,000,000,000.00 underfunded; $36.7 trillion);
- Medicare Part B ($37,000,000,000,000.00 underfunded; $37 trillion);
- Medicare Part D ($15,600,000,000,000 underfunded; $15.6 trillion),
- Government and military pensions ($2,000,000,000,000 underfunded; $2 trillion)
And we are going to let this same Government run Healthcare? Even the Office of Management and Budget is reporting that the United States government will experience massive, non-stop deficits for the next 70 (SEVENTY) years, requiring the issuance of tens of trillions of dollars of additional debt. The OMB does not project even one year of surplus during the entire seventy year budget period. Link HERE. (And don’t even get me started that these budget numbers are already including $646 Billion in tax revenues from 2012 to 2019 from Cap & Trade, which hasn’t even been passed yet!) Has your elected official talked to you about that? You don’t have to answer.
What is our Government’s response? Print more dollars. The US government has announced that during the fiscal years from 2010 through 2019, it will create an additional $9,000,000,000,000.00 ($9 trillion) in deficits, an amount that is almost certain to be understated by trillions given the country’s current economic trajectory. The government assumes that this vast additional deficit will be funded by others, such as the Chinese, as it is a statistical fact that the United States will be incapable of funding it. Link HERE.
What does this mean to you and me? That our wealth (if we have any) is being destroyed. Create enough dollars and they won’t be worth anything. It’s a simple truth: too much of something makes it worthless. The more our government creates money to cover their RECORD SPENDING, the less valuable your salary is, the less valuable your savings are, etc. Our government is bankrupting us through this spending policy. I know we sometimes think the United States is a blessed country and more immune to these problems than other nations, but let’s not be naive enough to think that somehow supply and demand doesn’t apply here! And that the value of our dollars won’t be adversely affected by the Government printing trillions and trillions more of them!
What can we do? Make a plan to protect yourself and your family. Don’t hold your assets only in dollars. Diversify into other things (land, gold, etc.) Even the Wall Street Journal is saying it’s a good idea to stockpile food. Link HERE.
And let’s get these big spenders out of Washington. I’m not talking Democrats vs. Republicans. Vote people into the House of Representatives that will work to put an end to this spending. The House is the easiest access we have to the Federal Machine. Find people you can support that will work to stop this spending madness. It won’t be easy to stand up to the current machine that is playing party politics as hard as anyone has in recent memory, but we might as well try while our dollars are still worth something.
Honestly, though, I’m not sure what kind of difference we can make at the Federal level until there is a massive reset (huge depression, market collapse, currency devaluation or failure, etc.) but this doesn’t mean we shouldn’t try. We can, however, make a difference at the local level. When our Federal government’s spending policies finally make it impossible to be the “be-all, end-all” throughout America — which it never should be trying to do — we will still need to make life work where we live. Getting involved at the local level will make a huge difference in how our communities adapt and move forward.
What are your thoughts? What are other ways we can prepare for the inevitable problems facing the dollar due to government monetary policy?
2) Stand there and we’ll take a guess about just how far the market can crash. But we’re being told it is as bad/worse than 1929.
If you are standing on principles, the speed of the decision doesn’t matter as much.
I think the scenario sort-of makes one point: Government gets involved with “A” in mind (in this case the S&L loans or Financial Bailout.) First blush is positive. But as with most if not all government involvement, it gets hijacked, and turned into something not intended. Go back (choose the years) and we will see the examples. Income tax; FDR’s programs; Welfare; The Great Society programs; etc. etc. I don’t know them all.
My opinion? Given the above scenario, the President should choose 2, and let Lehman Brothers collapse. And he should have pressured the Fed to not get involved in helping bail them out. (Or maybe he didn’t know cuz it was secretive, but he could have found out, and fired the guy for doing it.) Also, allowing the Fed to facilitate JP Morgan Chase’s purchase of Bear Stearns for pennies on the dollar. Yes these banks should have failed. There’s no way that a banking system performing the kinds of stunts that they have been performing should have been bailed out with taxpayers money. You think laissez faire is adversely affected by uncertainty (absence of full information)? Absolutely it is. What about Keynesianism and other interventionist policies? Are they immune to the ails of uncertainty? Absolutely not. And the market forces will correct for any uncertainty a LOT quicker than a poor government policy that has become LAW and may take generations to overcome. We’re still paying for the ones from 60-70 years ago. In fact, the government injects it’s own uncertainty into the system, but more on that below.
We appear to have changed topics from Bush vs. the Constitution, and maybe for good reason after listening to Paul, Jeff and Deon’s points. One of the best conservative minds — possibly ever — was Edmund Burke. I bring him into the Constitution discussion because he advocated gradual change, but at the same time not destroying the pillars of freedom with our experimental Acts. I’m equating his mentioning of Experimental Acts of his time to the Patriot Acts of our time. Yes we have to change with the times as Burke says (e.g. we have to deal with terrorists), but according to him, it’s not worth destroying the pillars of liberty that we have built our society on in order to accomplish that change. If we do so, we are destroying the foundation upon which our nation is built.
In terms of the banking issues, absolutely let Lehman Brothers and Bear Stearns fail. Don’t let the Fed get involved at all. The banks made bad business decisions. There is tons of evidence of corruption. Why inject loans into that? What is the economic principle that that decision is based on? In my opinion the decision was based on fear. Once again, we have a government trying — through their macro economic policies — to right the ship. “We can fix it. We can control the market forces.” And once again, the evidence is that they can’t. It might have stabilized some things for the time being, but anyone watching KNOWS with their gut that this glut of spending is going to have to be paid for at some point, and it’s going to be worse when it’s time to pay the piper. The Fear Move didn’t do anything but delay a market correction. Check out Karl Denninger if you’d like to read more.
AND, there are even some studies, like this one by the Stanford economist John Taylor, which purports to show (pdf) that the credit markets actually did not react all that badly to Lehman going under and that the crisis was really the product of market uncertainty about the effects of government action. So, the “market” reacted not all that badly to a market force of letting a bank go under, but the real market crisis started after the government decided to get involved to try to “control” the natural market forces? Add to this the fact that the bond market says it’s safer to lend to Warren Buffet than to Barak Obama, and I think we see what Keynesian fiscal policies bring to the table in terms of uncertainty.
See, now this makes sense to me.
At it’s most basic level, government is a willing agreement entered into by a group of people to give up some individual liberty for the preservation of the group in general. Cicero called it a “partnership in justice.”
For example, I have consented to be governed by the laws of my city, state and nation, even though that means I can’t do everything I may want to do whenever I want to. I may not agree with every law, but by not rebelling, it proves my tacit consent.
Naturally, then, in government leaders will emerge. We need to pick sheriffs, judges, mayors, presidents, legislators, etc. But does it really matter what kind of people they are? I think it does.
We have recently heard of all kinds of votes being “bought” in order to pass the healthcare bill. A Utah Congressman’s brother is getting appointed to a judgeship in exchange for the Congressman’s vote for Obamacare. The Hill newspaper reports on some of the goodies, including $300 million in extra funding for Sen. Landrieu’s home state of Louisiana, and millions in extra Medicaid dollars for Nebraska Sen. Ben Nelson. The public doesn’t want the bill to pass, so the Dems have to make these hidden deals in order to get it passed. Outside of Obamacare, the New Jersey government has been caught in corrupt contract scandals, awarding contracts and taking a cut of the money. Many state and national politicians are caught in sexual scandals. Our government leaders have been convicted of embezzlement, lying, and tax-fraud; implicated in the disappearance of interns, campaign fraud, and abuse of intelligence to rationalize war; and unconscionable waste of taxpayers money – basically robbing us, the citizens. It’s more like reading about pirates plundering a nation than its leaders preserving it!
Polybius, a Greek from around 200BC, watched the downfall of his native Greece and the emergence of Rome as the dominating power of the era. He wrote many books on Rome’s emergence and its history. He compares Rome to other contemporary nation-states like Greece, Carthage, etc. He says in The Histories, volume III that
“But the quality in which he Roman commonwealth is most distinctly superior is in my opinion the nature of their religious convictions. The consequence is that among the Greeks, (where belief in religion was deemed foolish) apart from other things, members of the government, if they are entrusted with no more than a talent, (a piece of money) though they have 10 copyists and as many seals and twice as many witnesses, cannot keep their faith; whereas among the Romans those who as magistrates and legates are dealing with large sums of money maintain correct conduct just because they have pledged their faith by oath. Whereas elsewhere it is a rare thing to find a man who keeps his hands off public money, and whose record is clean in this respect, among the Romans one rarely comes across a man who has been detected in such conduct.”
Whether the moral code you adhere to comes from organized religion or not, Polybius makes clear that moral people — people who believe in and live in accordance to the natural principles of right vs. wrong; honesty is good, dishonesty is bad; fidelity and integrity are good; etc. — these are the people that make the best public servants and leaders in government.
A generation later, the Roman Cicero said that leaders that follow these moral codes are the only ones fit to govern.
Another generation or two later, approximately 160AD, Marcus Aurelius was Emperor of Rome. In his Meditations he lauds a moral character that works for the public interest in a manner that befits a ruler.
My point is that the morality question has very little to do with the Religious Right of the current political landscape. Oh sure they get their boxers in a bunch about it nowadays, just in time for the next one to fall from within their own ranks due to yet another “indiscretion.” We don’t need to look to these punters for direction, or assume when they fall that the belief in a moral code is incorrect. We have the writings and lessons of history before us. Some Roman guys from a long time ago set-up a mixed government system with an Executive Branch, a Senate, a legislative (popular assembly) body, and judges. Sound familiar? They were the world’s super power for centuries, and their system worked for over 500 years. America, by paltry comparison, is just above the 200+ years mark.
So it’s not like we haven’t been pointed the way.
James Burgh, involved in the creation of this great nation, wrote in 1774 that,
“When we elect persons to represent us we must not be supposed to depart from the smallest right which we have deposited with them. We make a lodgment, not a gift; we entrust, but part with nothing. We have, therefore, a right to know what they are saying and doing. And should they contradict our sense, or swerve from our interests, we have a right to remonstrate, inform, and direct them. By which means, we become the regulators of our own conduct, and the institutors of our own laws, and nothing material can be done but by our authority and consent.”
Compare this with Speaker of the House Nancy Pelosi, and her behavior around the healthcare bill. Not only does the American public not know what is in this bill, she is deliberately trying to keep it this way as it says on her own website. The hidden deals, millions of dollars for buying votes, and strong-arm tactics is exactly the opposite of how the representative system is supposed to work!
Pelosi and politicians like her are bad for America. Watch CNN say so HERE.
We need a way to get career politicians back into the real world – like thru term limits for Congress. And we need to be as vocal and vigilant as ever against her and politicians like her. The right to govern ourselves is a real and unalienable right that we have. When our elected representatives abuse it and take power unto themselves like Pelosi is doing – hiding the contents of a bill from the public and doing back room deals to get it put into law – we need to use our natural rights and get her and her cronies out of our government. She and politicians like her are working toward the decline of America. The history is before us.
This is going to be a short one today. I have a couple of other posts partly written, but as we head toward the possible weekend vote on the ObamaCare national healthcare bill, I want to post a couple of ways that you can take action if you haven’t already. Personal contact from constituents can really influence how our representatives vote. And, since your congressmen and women are representing YOU in Washington D.C., you should let them know how you feel.
If you are for or against the federal government taking over the healthcare in this country, let them know. Let your representatives know how you would like them to vote in order to best represent you.
This is from Nancy Pelosi’s own website, speaking of the healthcare bill: “We have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”
Say what? Pass a piece of legislation into law so that (we) can find out what is in it? That is completely backwards, Ms. Speaker of the House! And it is completely wrong.
The people we have representing us in Congress (the House and Senate) should represent the will of the people. There are many, many polls that show Americans do not want this version of national healthcare passed…due to the trillions in costs and the fact that people haven’t even read it yet! We don’t know what is in the bill, and we don’t trust the politicians pushing it through “at all costs.” Whether you agree with me or not, take a stand and act on it.
Here are some places that you can go to send faxes to your congressional representatives. Jump in. Make your voice heard.
If you would prefer to phone your representatives, you can find their phone numbers on this website. Just call them up, and leave a message with the staffer that answers the phone. Tell them how you want them to vote on the healthcare bill, and wish them a nice day. It will make a difference, and you can do it.
Campaign Slogan: Restoring our Country’s Greatness
You know, there was a time, not very long ago, that “Made in America” meant something special. You would see it on labels of clothing; on the handles of tools; and on spare parts and toys you purchased at many different types of stores. It made us feel proud: proud to be part of this great nation; proud of the work that went into building the greatest nation on earth; proud of our heritage; hopeful for the possibilities of our future. But you don’t see the “Made in America” slogan these days as much….
We’ve shipped many of our jobs beyond our borders. We are increasingly dependent on other nations for our food supply. We have become massively in debt as we have adopted policies that mirror the social democracies of Europe with their massive entitlement payouts. Those countries are nearly bankrupt – is it any wonder that we are too?
And there is a growing feeling of negative anticipation in our nation. I’ve heard people say they are ‘hunkering down’, and ‘waiting for the end to come’. People just seem to sense that we cannot continue in this manner. But when will it change?
The time is Now. It is time for Restoring our Country’s Greatness. America has never shrunk from a challenge, and we will not do so this time. My plan, as outlined in my 6-point Party Platform, will Restore our Country’s Greatness. The first plan of attack is to get our economy turned around, and the American people working again. We must make it easier for small businesses to prosper in America. We also have plans to bring corporate manufacturing jobs back to America, but that will take some time. I strongly believe that our small businesses will lead us out of this economic recession.
The American people are the most ingenious, inventive, and hardworking people on the planet. I believe that federal government bureaucracies have grown to unduly tax and interfere with our economic progress.
For example, in 2010 the Obama administration passed legislation aimed at protecting us from dangerous goods from China. This is a commendable idea. But in the legislation that passed, crippling bureaucratic hurdles have been placed in the way of American businesses. Now, small business that produce and ship goods around our country will need to spend thousands of dollars to get each of their products tested and “certified” to sell by yet another new governmental department. This will harm many small American companies, the Mom & Pop stores barely scraping by. It will cripple their bottom lines, and cause many more to shut their doors completely. And it continues to grow the size of our ever-increasing government, adding more expenditures that we cannot afford.
I will work to help small businesses, not hinder. We will simplify the tax code, and reduce bureaucracy and regulation for the small business owners of America. We will get the government out of their way, and allow them the freedom to pursue life, liberty, and happiness. We will encourage investment in new technologies, US factories, and minimize government hurdles and costs for businesses of all sizes. We will also do away with farm subsidies to get America’s farmers working their farms again, bringing food production home where it belongs. For large corporations, corporate tax breaks for companies that manufacture in the United States, keeping our economic advantages on our own soil.
…And we need to keep our soil safe. When our country is safe and well protected, the American citizens feel safe and happy about our security. Our military forces have struggles for years to provide an opportunity for Iraq and Afghanistan to make better governments for themselves. After so many years, it is time to allow them to stand on their own. We have shown them the way. At this time of great worldwide economic struggle, the US military personnel need to be home with their families. Our own borders need to be better protected. We will always protect the United States from attacks, both foreign and domestic, but we need to get out of the business of nation building and the idealism of creating our “brand” of government around the world.
As we focus internally, let’s take a look at our country’s education system. The education of our current and rising generations is the key to our future. Therefore, I propose to gradually wean the Federal Government from managing the education process in America. This will be a big change for us, but it is necessary. The American people should be in charge of their own education at the family, community, and State levels. By removing federal monies and requirements, we will clear the path for education to become competitive, and for states to regulate education within their own borders. We will work with party members at the state and local levels to weaken union strangleholds in the education arena that are destroying the education process for millions of young Americans, provide tax credits to leave failing schools, and offer merit pay and other performance-based incentives to ensure our teachers and students are the best they can be.
And let me make this pledge to you this evening: I will work to create real reform and change in America’s government. By spending more money than we have as a country, the current administration has created a debt burden for future generations that will take many years to overcome. This is not fair for our future generations, and it is common sense that it cannot go on forever. Spending more than you have doesn’t work in your homes, and it does not work for our country. We will work for a balanced budget, eliminate deficit spending, and introduce greater oversight and transparency on the workings of the Federal Reserve System and other banking institutions. Clear steps will be taken to “follow the money” and measures will be put in place to put an end to reckless financial practices, like credit default swaps, as well as create a payback schedule for all bailout monies received by our financial institutions. We cannot continue to “print money” at record levels, like our current administration, and not expect to reap the consequences of high inflation and a valueless dollar.
Too much money gets spent and too many laws are created outside of the legislative process. Our government cannot continue to allow the executive branch to wield the power of the Executive Order to create binding laws outside of our checks-and-balances system. If given the chance I promise I will correct these and other corrupt practices currently taking place in Washington. I promise to reduce our spending year upon year until we can see an end to the uncontrollable deficits.
Why are we in this prolonged recession after some of the best growth decades our nation has ever seen? Some of the biggest reasons are right here in Washington: It’s called Politics as Usual. Bloated government. Spend, spend, spend. Miles of bureaucracies thwarting American business. You were promised Hope & Change. But let me ask: Is this the Hope & Change you were looking for? I don’t think so.
THE UNITED STATES of AMERICA has the HIGHEST levels of RESERVE ENERGY RESOURCES of any country in the world.* Yet we struggle with rising energy costs and energy dependence on countries with unstable leadership and that often have anti-American positions. This situation can be rectified by developing environmentally safe methods to extract the natural resources within our own country. We will work to encourage and provide incentives for private companies to help the USA attain energy independence, through the extraction of existing American oil reserves, as well as developing new sources of clean, renewable energy. These resources alone “represent tens of trillions of dollars in wealth and millions of American jobs.”*
If given the chance, my fellow Americans, we can make this dream a reality. If given the chance, you and I together will Restore our Country’s Greatness.
Thank you, and God Bless America.
*Congressional Research Report 2009 http://epw.senate.gov/public/index.cfm
There’s a new term in America’s lexicon: “bailout money”. A friend said to me last weekend, “Let’s not go to that restaurant, that place takes ‘bailout money’.” As in expensive. Very. One of my favorite dishes, spanakopita, usually isn’t very expensive. It usually doesn’t take “bailout money” to buy spanakopita. Usually.
Speaking of the $787bln bailout, what happened to (y)our bailout money? There is evidence now that some of the companies that received our bailout money – Goldman Sachs, French company Societe Generale, etc. – were associated with the mortgage bankers that offered the high risk loans in the first place. Mortgage companies associated with these investment banks were offering loans to people without even verifying employment and income claims. In other words, they knew these loans were very high risk. And when they tanked, they received our money to get bailed out of the very problem they created.
Here’s how it worked. In a bit of financial hocus-pocus, Goldman Sachs, SocGen, etc. rolled up these high risk loans into something that people could invest in called CDOs. They were basically bonds, which have a guaranteed return. The return to the investors was supposed to be provided by the interest payments that people make on their mortgages. And it would have worked if people kept paying their mortgages on time. Before it blew up, however, there was a bit more hocus pocus: Goldman Sachs, et al. knew these CDO investments were super high risk. So they bought insurance policies. AIG decided to insure the debt of these high risk home loans with something called credit default swaps. Bad move. Once the people – the same people that never should have been offered these home mortgages in the first place – started defaulting on their payments, Goldman’s and SocGen’s CDOs were not making their expected returns. So, they called their insurance company AIG for a payout. There were so many bad CDO bonds (based on high risk loans) made by these and other banks, and insured by AIG, that when it came time to pay the claims, AIG went bankrupt…..well almost. Instead, the US of A decided to step in and bail them out. Just to make sure this is clear: Goldman Sachs and friends – unethically, or at the very least with conflicting interests – made the bad loans to begin with, which created the problem. Next, they purchased insurance without disclosing the true nature of the assets they were insuring. Then they were bailed out of their poor business decisions with our money.
What did AIG do with the money? First, they were forced to pay out their insurance claims *at full value* to Goldman Sachs, Societe Generale, etc. although everyone already knew by this point that the mortgages they had insured were worthless. The Federal Reserve Bank of New York ordered http://www.bloomberg.com/apps/news?pid=20601087&sid=ax3yON_uNe7I AIG to pay them back at full value even though AIG was in the process of negotiating the payout at a large discount. The Federal Reserve of NY then hid this fact for more than a year from Congress and other oversight committees even though AIG wanted to publish the information. Conflicting interests, anyone? A year later, Goldman Sachs is paying out $23 billion in bonuses to it’s employees. Yes, that’s with a “b” for billion. That’s enough money to send 460,000 people to Harvard or buy health insurance for 1.7 million families. I wonder what the NY Fed Chair is getting. Oh, and in case you aren’t following, that’s your money they are paying out as bonuses to their employees.
AIG received more than $182bln of our money. And this is only one example. The list goes on. A lot has been – and will be – said about the lying, cheating and cover-up in this bail-out scandal. I don’t have the space or inclination to delve further right now. Maybe later. I hope people like Darrell Issa www.darrellissa.com get to the bottom of this.
But my question is: why the slimy and secret cover-up from the Administration? Why cover up what happened to our $787bln if there’s nothing to hide Mr. Treasury Secretary Geithner? What happened to the transparency that was promised on the campaign trail? Where are the healthcare debates on C-Span that were promised on the stump? Where are all my friends that drank the kook-aid and insisted Obama would be different? Instead, we have his particular brand of Chicago politics at the national level. As US News & World Report claims, the stimulus program and healthcare are loaded with hidden political pork: Pelosi and Co. receiving $54M in earmarks to relocate a wine train in California; Reid and Co. arranging an earmark for a Los Angeles-to-Vegas high-speed train. The healthcare bill, specifically, was another fiasco of political corruption, with millions of dollars allocated to buy votes, such as those of Louisiana Sen. Mary Landrieu and Nebraska Sen. Ben Nelson. Anger with that process and the bill it produced helped fuel the stunning election of Republican Scott Brown in Massachusetts. http://www.usnews.com/articles/opinion/mzuckerman/2010/01/21/mort-zuckerman-the-incredible-deflation-of-barack-obama.html?PageNr=1
Is this the Hope and Change we were promised?
But back to AIG and the spanakopita. Due to the bailout, the USA (that’s you and me) owns 80% of AIG. Now it’s coming out that – according to a German newspaper – AIG sold the same kind of credit default swap insurance policies on Greece’s national debt. http://www.nakedcapitalism.com/2010/02/german-paper-says-aig-may-have-sold-cds-on-greece.html Greece is currently floundering in debt and is in danger of going bankrupt. The EU has already imposed austerity measures on Greece to ensure that they are able to pay back their mounting debts and keep their status in the European Union. Suddenly it appears that it is in the USA’s – I mean AIG’s – I mean the USA’s interest to keep Greece from defaulting. How? Well, remember that European vacation/home in Greece you have fantasized about? Well, it may very well be that the USA will be purchasing a whole bunch of mortgages & homes in Greece — with your money — but there’s a catch: the Greeks get to keep living in them, not you.
Speaking of Greece, Aristotle made a point in 350BC that still rings true today. Legislators and politicians that get paid a lot of money and can stay in office for a long time are a danger to the Society. Not only do they receive the honor of the State, they will soon start taking the people’s money. And this makes the people doubly angry. Not only do the politicians have the honor, but they make themselves rich off the work of the people. Aristotle also saw how it gets resolved: The people will not stand for this for very long before they revolt and change the government. It was true back in 350BC and it’s true today. We the People will not stand for this type of slimy highway robbery bailout, secretive behind-closed-doors healthcare legislation process, and cover-up much longer. This should not be taken lightly, but it might just be the hope and change we are looking for in America.