We Still Have To Pay The Bill

I am not convinced the recession is over in the slightest. Obama and the Democrats pumped billions of tax dollars into banks and even a private auto industry that is still falling into bankruptcy. People who go to work every day and businesses who employ them will foot the bill with higher taxes. I don’t see government giving any real tax breaks to consumers-$8 a week?? PLEASE. And corporations not only pay the highest corporate tax rates, Obama and the Democrats want to shove some more down their throat.

Lets look at why this happened. Acorn intimidated banks into giving mortgages to people who had no business having one and had no intention of paying for them. The banks should have simply said NO,they don’t meet the credit criteria. The auto industry is bankrupt because of greedy unions and workers.

Until society expects accountability and responsibility from people, this will not really be over. Because there is “no free lunch”. The rest of us will suffer greatly for it.

No we don’t. Our children will pay the bill and our children’s children.

I think it is very possible that we will see a year or two of stable markets and a rebound of consumer confidence but where will the economical activity that will lead us to recovery come from. There is just nothing out there. The green jobs everybody is talking about is such a niche market that it will never lead to full employment. Of course some one could invent something that will get the economy going again.

But I am certain that borrowing money from everybody around the globe just so we can buy their stuff will eventually come to an end and that will be a bitter pill to swallow.

Larry, I’m sorry but you clearly have no idea of the ramifications of your so called “we should take this with an immediate loss idea! I’m no fan of Obama or the way things that have gone down with some of these bailouts…. but that idea just flat out sucks! I guess you didn’t realize that the whole World was destined for immediate financial collapse on a day back in September? What were people supposed to do… just let it and then just wallow in misery for the next decade? I just don’t think people who spout this sort of crap have any idea of what that “other shoe” would have been like… I’m no fan of all the borrowing but in the situation we got ourselves in we really have very limited options now! Things have to be corrected in stages to keep the economy a float… if you think 9% unemployment is bad just think of that number had we done things your way… LOL Double or triple it!
I’m a finance man myself / own and run a multi million dollar international investment business so I understand some things too!

That’s why a new openness to new factories and production units in cities and towns all across the USA is required.
Today, the taxes and high cost of even establishing a new production is often prohibitve, not to mention the outcry of the local public and the attendant special interest groups.
This leaves the “green friendly” idea – where now endemic special interest groups for environmental, city beauty, eye sore, nimby in general activism, not to mention “those types of working class” people attitudes are extremely difficult prospects to overcome.
Even a giant with enough massive pressure can be stopped, as Jesse Jackson did to Wal Mart in Southern O land, Chicago. It was a disaster, and it went in just adjacent, with overwhelming job applications from the banned area – a case in point how the politics of special interest pressure wins.
So what we have is a populace on the one hand screaming for “factories and production” – at the same time – the controlling half or even more – blocking it in their own communities for a panopoly of reasons – coupled with the higher and higher demands of the legal (building for instance) codes.
Add in waste (landfill) issues, federally mandated environment concerns, water and sewer, power requirements, the list goes on and on.
So as the public screams for the past glory, with an increasingly powerful and fervent bent, with more than plenty predjudice, they keep out the growth, and the “factory riff raff”. Cars are not “the only thing produced” – imagine a plastic toy factory… or one of a thousand implements at big box stores, or indeed the chemical and environmental dangers of computer parts productions, only recently carrying an ROHS green smiley.
In the end, the only thing that can possibly overcome is a GREEN product. Any complaints will be crushed in the face of “we need to get off the oil addiction” and ” this can save the earth, the world, and all our lives from global warming”.
There really isn’t any activist mantra larger than that.
Hence, the “solution”. A political ploy and gain, with any former complainers working for the party team in other areas against new production, instantly silenced, or absolutely acquired with a pro-bent fervor.
“Repairing the crumbling infrastructure” falls under a similar mindset, although not as powerful in acquiring allies, it still works and is not often nor widely considered a “hidden danger with immense health consequence potential”.

My last will and testament:
To my son I leave a mortgage that is now more than the home is worth.
To any and all grandchildren I may have I leave my share of the national debt along with its implied servitude.
To future generations I leave my sympathies for being burdened by debts and laws they had no say in and yet will be bound to honor.
To our executive and legislative branches I leave a curse – a pox upon your houses.

Scott,

I would have proposed managed liquidations of a number of banks in which the FDIC would have created good banks and bad banks, a la the RTC of the early 90s.

The costs should have been largely borne by those who took the risks. The moral hazards that have been violated will have enormous costs for a long time.

I respect your opinion, but beg to differ.

The worst thing is the matter of cleaning the ethical and criminal misconduct from the system – that without the pain required to move the slugs on the hill in the proper direction, it just won’t happen.
Instead, a wink, a nod, and a crime spree of immense proportion has been chosen – and that is has, is already starkly clear.

Allow me to put it another way – as Blagojevich dreamed of his conspiracy over a telephone, and was accused by the disturbed Fitzgerald of “being on a never before seen crime spree” ( with 3 years prior of secret taping ) and resultantly being unable to produce evidence of a crime without at least an additional 90 days (if that doesn’t make you look twice nothing will)… those engaged in a very special sort of secretly devised yet publicly announced Blagojevich on toxic steriod hulked out monstruous crime spree, moved forward with rapacious speed – IN SECRET – and we are told, even now, most canot be known.
So in one case we have 3 years of wiretapping producing as we have heard a THOUGHT and SPEECH crime, and of course we should all be aware that’s how things are handled yet more sublty…. and on the other hand, an open money laundering express of such vast proportion, openly condoned, and excused by same claming ignorance of it’s machinations, at the very highest levels, far above even Fitzies failed and ridiculous so far 3 year “investigation”.
That’s the difference between a talker and doers.

http://www.theonion.com/content/news/nation_ready_to_be_lied_to_about?utm_source=a-section

I have this sinking feeling that the worse criminals are the ones running our country. They are the ones who are still living in the lap of luxury. When all the smoke clears they will still be living in the lap of luxury while the thousands of new jobless and homeless try to survive.

I am becoming somewhat concerned that Bernanke is wondering if they have put too many chips on the table.

A bit of snark so obvious it pretty much writes itself: Why should Bernanke worry? He’s got all the machinery for manufacturing more “chips” in the back rooms of the casino . . .

Hey Portia, that looks just like my last will and testament! Just think of how much everyone is saving on attorney’s fees with such a simple document!

Obama’s economic team needs to be put in quarantine — and replaced by people willing to put the public interest ahead of the interests of Wall Street.

Let’s see–who wrote that? Why that would be Arianna Huffington in her current post. I feel this compulsion to add something snarky, but I think I’ll just leave it at that.

I agree with portions of both opinions but I am concerned, Larry that the FDIC cannot cover the failing of so many banks at once and this may be a reason for extending the process.

But the arrogance of the banks makes me want to kick someone in the pants.

LD, I’ve asked you before about TARP funds and other taxpayer resources finding their way to prop up the stock market in blatant market manipulation. Your opinion, as I recall, is that you were doubtful such a thing is occurring. I wonder if you still hold this opinion? I read lots of comments from traders on Market Watch and other sites pertaining to this subject, and Goldman Sachs seems to be at the center of the manipulation “conspiracy” theories. This remark from “Law97″ on MW is typical:

This is not a classic suckers rally, this time it is different. The Fed is printing and the treasury is handing over trillions to GS and the like with the back room understanding that after all the bonus payouts, they must use some of the taxpayer money to prop up the stock market. The side benefit is that the SEC will continue to look the other way as the TARP recipients make insider trading profits when they put the money to work.

Do you still think that such possibilities of market manipulation are remote? I don’t have a financial dog in this fight–I’m just very curious.

While the news is grim it’s a beautifully written post, LD. You should send this in as an OpEd to a MSM paper somewhere.

“Acorn intimidated banks into giving mortgages to people who had no business having one and had no intention of paying for them.”

No. What happened was that unknown people in the financial industries made astonishingly fast and vast profits by deliberately making unsafe loans and transfering the attendant risk onto other unsuspecting parties. They did this from the level of individual loan origination all the way up the chain, cunningly bundling bad loans with the good in a manner calculated to conceal the actual risk level. Investment instruments were sold and resold with false risk ratings; derivative instruments were created to give an illusion of safety and deeper concealment of bad bets. These were themselves sold and resold as if they had actual value.

Somewhere along the line we seem to have forgotten that the national and global economy were raided by pirates, who for the most part have gotten away with their loot unnoticed. It serves their ends if we blame politicians, ACORN, people who have lost their homes, etc.

Both happened. Plenty of people in both groups were doing credible and professional work and plenty were real slime/buzzards feeding on the same carcass.

I’m not planning on dying anytime soon, sorry. That means I’m paying. And I don’t have any children.

Well, the Almighty Spam Filter rejected the above comment, and so I reposted it on LD’s Sense on Cents site, and Larry was so kind as to answer. Here is his response:

Wow….I will say that I have been increasingly bewildered by the equity market price action. In fact, I said to somebody just the other day that I have begun to discount the price action in the equity market as not being in sync with the economy.

In my opinion, if the equity markets are truly reflective of the health of the economy, then the bond market should be a LOT lower than it is currently even with the Fed’s purchasing program.

One of these two markets is out of sync and potentially both.

If the govt is using GS or anybody else to prop the market, the losses involved in foreclosures and defaults are very real and can not be avoided. That is the real economy and that has my focus.

If the equity markets rally and I miss it, c’est la vie. I’m not playing. I’m writing and looking to help people “navigate the economic landscape.”

One final point, as I mentioned in my post Water Finds Its Own Level, markets which are manipulated work their way lower to find their natural level over time.

Write your representatives to co-sponsor and support this important
legislative bill.

HR 1207 Audit the Federal Reserve, now has 124 co-sponsors in the House of Representatives.

http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/