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Monday, November 24, 2008

Read em and weep: Bloomberg Tells It Like It is

Once again, our Treasury Secretary, former Goldman Sachs CEO and our Fed Chariman, Ben Bernanke have opened the flood gates with billions of dollars flowing towards Bank Street. The theory again and again is if they are too big they are too big for us to allow them to fail.

Is that not how the free market works? If you fail you fail and there is always someone there to pick up the pieces and move forward with them. If these large bankgrupt banks such as Citi, Wachovia, Washington Mutual, Bank of America and probably J.P. Morgan Chase would fail, then the hundreds and hundreds of smaller regional and local banks be there to pick up the slack, allowing them to grow and profit? That is how Capitalism and Free Markets work.

But speaking of "too big to fail", small business in this country as a total group would be "too big to fail" and therefore should be bailed out. It would make more economic sense, with trillions of fewer dollars spent to bail out mom and pop. This would allow them to grow, prosper, spend and employ. Money on the street at the street level is where the bailout and solution should be.

Here are some interesting lines taken from todays report on titled, "U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit (Update2)
By Mark Pittman and Bob Ivry. Please take the time to read it in full.

"The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers..."

"The pledges, amounting to half the value of everything produced in the nation last year..."

"The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis."

"When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and

"William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said."

"Most of the spending programs are run out of the New
York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary."

FORUM Editors Note: Does this mean that the same policies that we have had will continue? If most of these bailouts have come from the N.Y. Fed, and most have on these late Sunday meetings, then it appears we will have more of the same. Does Obama realize this or is he now a member of the elite Round Table?

FORUM EDITOR: The following excerpt is very eye opening.

"The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off
more than half the country’s mortgages.

EDITOR'S Note Continued: Paying off half of the country's mortgages could go a
long way to a recovered economy. But doing so would not be fair as to the other half, so why not pay off one half of everyones mortgage.

"Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral."

FORUM Editor: The Feds and Treasury are refusing to disclose what they not only agreed to do but were mandated by Congress to do. Bloomberg is not sitting still for this blatant violation of law and most of all trust. Hoorah Bloomberg, we need a large recognized voice like yours to be on the side of the people against blatant misuse of power and trust by both elected and appointed officials of "our" government.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the
second half of the TARP money."

FORUM Editor: I highlighted in bold and italicised part of Frank's comment He is so absolutely right. He and Congress need to insure that the funds are used as they were meant to be used. How do they - Congress - as elected officials representing the people not have power over two politically appointed positions, Treasury and Federal Reserve Chairmanship.

This begs the question, "Who Really Runs Our Government"?

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