Patricia Nell Warren

The $700 Billion: Hand Over Your Chickens

Filed By Patricia Nell Warren | September 25, 2008 7:00 PM | comments

Filed in: Living, Politics, Politics, Politics
Tags: bad mortgages, protest, Wall Street

As the $700 billion bailout moves towards approval by Congress, there are enough rumblings of citizen anger that I started wondering why a 7-million-person march on Washington D.C. wasn't developing. Last night, as I watched President Bush tell us in his usual robot style that we taxpayers are going to shoulder the load on the bad-mortgage bailout, I wondered what it would take to get a record turnout of protesting Americans at the White House gates with a sea of placards and TV cameras.

We Americans are quirky that way, about what gets us going. Tell us that a child has been raped and murdered, and we will swamp the country with emails and phone calls demanding action. When I was working at the Reader's Digest in the 1970s, the magazine published an article about saving wild horses from slaughter and suggested that readers write their Congressmembers. Well, more letters got sent to Congress about that wild-horse bill than about the entire Vietnam War. Strange but true. Even today, these outpourings of mail can win their victories -- like the other day, when a mass of write-ins persuaded the Georgia Board of Clemency to stay the execution of Troy Davis.

But tell Americans that they're going to buy the now-famous trainload of bad mortgages whether they like it or not, and the country is strangely quiet. Despite Democratic politicians and commentators who clamor that the bail-out plan won't work, the citizens are not saying much this morning -- saving a few local rallies and lots of grumbling on blogs.

So what's going on? Are people being slow on the uptake? Have we grown so cynical about government that we felt this development was inevitable? Is it because most of us aren't experts on Wall Street so we're not sure what the real problem is, or whether this proposed legislation will fix it? Or is it because many of us are simply getting more and more stupefied at the growing inability to pay our bills?

Bear in mind that the $700 billion is only PART of the load being put on our backs. In each state facing a budget crisis, taxpayers are being asked to shoulder additional burdens. In California where I live, governor Schwarzenegger signed off on $15.2 billion in 2008 budget cuts, which includes cutting salaries of 200,000 state employees to minimum wage. Fierce battles are developing around state payouts in Medicaid. For vulnerable low-income citizens, this means that they must either pay for lost medical services themselves...or do without. In California, for instance, the legislature went to slash Medi-Cal by 10 percent, but a court decision blocked it temporarily, because of the deaths that it might cause. So the legislators simply took it out of people's hides somewhere else.

Similar extra burdens are piled on us by borderline-bankrupt cities. In New York City, mayor Bloomberg is looking for $1.5 billion in budget cuts, and a 7-percent hike in property taxes.

Personally, I think that most of us -- far from being ready to stand on the Capitol Mall in D.C. to shout slogans (peaceably, of course) and risk being tasered by police -- are feeling monumentally stupefied at all these developments. It's coming at us from all sides.

The present moment reminds me of similar historical moments in the Middle Ages, when the rulers have nearly bankrupted the kingdom in order to finance their endless dynastic wars and lavish lifestyle. So they go back to their groaning subjects to levy one more round of blood-sucking taxes. And the royal tax collector shows up at your little farm to take your chickens.

Last night Bush told us he wanted our chickens. And so far, it looks like we're going to hand them over without a fight.

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Great post, Patricia.

The past two weeks have been really mind blowing. I don't know what to think. What really gets me is that the government keeps saying that we might be able to avoid a recession. Uh, hello?

listen, this isn't about recession or depression, this is about a government takeover.

washington mutual has been taken over by the government.

is anyone listening?

are we so fucking scared we can't hear?

all I can say is save your money, stay in cash and have a plan.

I'm not an alarmist. I have sat through the dot com bust, I have sat through the credit crisis and I have calmly recommended to stay the course.

the course has changed forever.

wake up people. it really is time to storm the streets.

do we have the guts?

From what I understand, people are calling their represenatives and telling them in no uncertain terms to take the bailout and stuff it.

People are sick and tired of the bull that this administration has pulled on the American public. they realize now that Bush's "compassionate conservatism" only applies to his corporate cronies who have spawned this mess by wallowing in the greed that Bush and the neocons have told them "good business" is all about.

If Joe shmoe has been conned into buying a house with an ARM he can't afford, then it is his fualt for trying to live beyond his means and he should face his responsibility for getting himself in such a mess.

If Brad the banker makes questionable investments in sub-prime mortgages and other iffy securities, well that was just a business decision that turned sour, it can't be His fault for making a poor decision, after all, he does have an MBA from Harvard or some other ivy league school.

Perhaps Brad and Bush should share a cell somewhere for the the outright fraud and corruption that they have foisted on the country for the past eight years.

Maybe it should be wall street who has to take up the collection to correct this mess, rather than the American people. I mean with what those people were making in the "boom times" 700 billion should be a drop in the bucket if they all chip in.

No matter what we do, we are going to have a depression. Whether it happens next week, next month, or put it off for awhile by this misguided bail out, it doesn't matter. This country is going down, and there are plenty of people in this world who will celebrate our demise as a world power thanks to the Bush Doctrine.

Quite a legacy your'e building there Shrub, keep up the good work.

Patricia Nell Warren said: "I wondered what it would take to get a record turnout of protesting Americans at the White House gates with a sea of placards and TV cameras."

Perhaps gasoline at $1.89 per gallon so we could all drive to D.C.

To hell with this bailout, let these bad debts be allowed to liquidate back into the market for a market value, instead of a bureaucratic estimated guess of some arbitrary value as assigned by the FED and Departments of Treasury whilst making the entire nation culpable for these poorly crafted ponzai security schemes.

Let the criminals who created this debt have their companies liquidated.

After all, not passing this "bailout" will most assuredly lead to recession.

However, this bailout whereby the FED literally prints money our of thin air will lead to hyper-inflation and thus a collapse of the Dollar, therbey taking out every individuals saving's account.

To hell with criminal bankers, their crooked lobbyists, and their puppet, Secretary Hank Paulson.

Robert Ganshorn Robert Ganshorn | September 26, 2008 2:11 AM

Alli, we need a working bank system that is strongly federally regulated. We need a stock market that can provide capital for growth for industry foreign and domestic.

If anything needs to be fricasseed it is "Brad the Banker," the educated man, who presented "Joe & Jill Schmo" with what they thought were the keys to the kingdom.

We have to reorganize to keep people in their homes at an affordable monthly payment. It is too disgusting to imagine (those who are able to wait) buying up tracts of homes at depressed prices to profit from what we could have preserved as a family's dream.

So, there is going to be a recession. It is not our first one you know! And we should approach it with good humor. We will learn from it to put things in perspective. We are spending 16 billion a year on dog and cat food in America. As most know I live in Thailand where 60 million people share a GDP of about 325 billion. Do the math on that and remember how well off we are just being Americans.

So, there is going to be a recession. It is not our first one you know! And we should approach it with good humor. We will learn from it to put things in perspective.

I love these cheery comforting words. They’re like a lullaby to soothe the downtrodden. Soothing, so soothing…

I can almost ignore that fact that Washington Mutual went into receivership today and that GM, Chrysler, Ford and CitiGroup have ‘Domino” written all over them.

It almost makes me forget that the CEO of the bankrupt AIG sold off 40 million shares for $126 million before the company tanked.

It takes away the pain of knowing that our economy is facing what may become an extinction event.

These kindly pearls of wisdom could have been uttered by President Hoover or President Bush or even Bush’s Treasury Secretary Henry Paulson, who earned $35 million in 2005 and is worth almost $700 million total. Or by Clintons Treasury Secretary and Obama’s chief economic advisor, Robert E. Rubin, the primary mover and shaker behind deregulation who amassed a huge fortune before taking over CitiGroup. (The wealth of those two misbegotten thieves and everyone like them should be confiscated to bail out working people.)

And as for the real author of this worthy little homily, I say, never fear; the unions will show you some perspective.

Robert Ganshorn Robert Ganshorn | September 27, 2008 4:03 AM

Perhaps you would like to tell everyone again Mr. Perdue how it is not about me at all.

Robert Ganshorn said: So, there is going to be a recession. It is not our first one you know! And we should approach it with good humor. We will learn from it to put things in perspective. We are spending 16 billion a year on dog and cat food in America. As most know I live in Thailand where 60 million people share a GDP of about 325 billion. Do the math on that and remember how well off we are just being Americans."

When this banker bailout occurs, we will sink into Depression not a "happy recession".

The problem in laypeople terms is debt a.k.a. "credit".

The FED simply "printing" more money before Treasury even has the chance to monetize the debt via T-Bonds, effectively means "worthless paper money"

Please tell me how much confidence you would have as a foreign investor in buying up another 700 billion dollars of American IOU when the country is leveraged to the max, much like those who refinanced their homes over and over and over until there was no more. Debt only leads to more debt.

Once this bailout is law, simply take a napkin and write a $100.00 because it will have effectively the same value as "Federal Reserve Note" Period.

Yes everything will be hunky dory until about February 09 once the credit cards, commercial real estate sectors, and local banks collapse to the degree deemed news worthy.

What is the solution then?

Oh hey, I know, lets print up some more paper money! - yeah

What has occurred is not Capitalism, as bailing out bankers by bilking taxpayers with their toxic-worthless-assets just so said bankers can shove off more credit/debt to consumers while the bankers walk away with severance packages is nothing resembling capitalism.

And why is it that the slime ball bankers will not go to jail for fraud and no "golden parachute"?

Because the regulators are bankers.

Yes so lets have more former bankers become regulators, because that model has worked so well.

If this was not such a serious situation, it would be laughable.

Unfortunately, the die has been cast. This economy will collapse.

Robert Ganshorn Robert Ganshorn | September 27, 2008 4:32 AM

Hello Alli,

Is your breathing normal now? You got a lot off your chest I know. There is no need to print more money. We are not Zimbabwe! We are the largest economy in the world by a factor of two times our nearest competitor. Is it not time we acted like it Chicken Little? (I borrow that from Patricia)

There will be countries around the world standing in line to buy American assets on the cheap if we talk ourselves into this mentality. Guess what? Those new owners will still pay taxes on the businesses they acquire from us. Whether they are from Dubai or Japan, China or Great Britain.

The "bailout" you fear? If it were due in one year would be oppressive. But it is not due in one year and with proper stewardship will yield a profit to the treasury and the American people.

In due course, unless "W" gives them a pardon on the way out of office, I expect to see a number of Bankers gray suits hanging in the "check in" areas at Federal prisons. Some may recall I expressed that the Texas Sidewinder will give himself an executive pardon on the way out of office, so why not a group of bankers and the Vice President? After all, once you have lost faith in your own innocence it is easy to suspect no one else is innocent.

If anything, these bankers should worry about their legal fees and fines for betraying the public trust.

Alli, the economy is not "going down" it is suffering from exhaustion caused by too many dance marathons around the housing markets. Give it a sit down, a glass of water, and a new set of shoes and watch the miracle. Thanks Patricia!

I'm so tired of the language of fear that this administration constantly substitutes for logic so that they might use whatever situation that arises to their own benefit.

Frankly, I think my chicken is fricasseed.

Good post, Patricia. It's very informative, and information is what we need most of all. Keep it coming.

This is a lose lose situation for Wall Street, for the Democrats who service them and for the Republicans.

First of all it’s the conjunction of an unwinnable but must-win war with a sharp economic decline that might lead to a resumption of the Great Depression. It’s virtually certain that the US is going to get it’s ass kicked by the Iraqis, Afghans and by the Pakistanis and Iranians if they’re next on DCs victim list.

Second, the bailout is absolutely necessary because the US is now a debtor nation, like Argentina or Egypt. That means that the bailout, which will cost trillions in whatever form it takes will be tremendously destabilizing;

o - It can’t be implemented without the imposition of a ham-fisted assault on our standard of living; an imposed austerity program that could last for decades.

o - It’ll cause a decided shift towards rightwing oppression when people react to the dramatic new drop in their standard of living.

o - It’ll mean the end of any chance of renewing any of the social programs eliminated by Clinton, it’ll intensify the degradation of our infrastructure in a period when ecological disasters are on the rise and cause even more debasing of our already backward educational and medical systems.

Third it opens up a whole new discussion on the role of government, one the Democrats and Republicans have tried to stop of decades. They’re nationalizing private debt and making us pay it off while privatizing the profits of the very speculators to got us into this mess. The Democrats will put a fig leaf on it and wring their hands but they’ll follow the Republicans right of the cliff just like they did with NAFTA, deregulaion, Iraq, and DOMA. They have no choice. Otherwise the economy will crumble, and it may anyway.

It’s political suicide for them because working people will begin, as they did in 1929, to seriously question the system, and begin serious struggles to change it. The impetus of those struggles will lead inevitably to the question of who should rule, the speculators and their lapdogs in DC or working people. And that will happen whether the Great Depression resumes or not.

I do not consider myself knowledgeable in any way about economics, but my parents lived through the Great Depression. It took WWII to get us out of it.
Right now we are already in the midst of an undeclared war in which a precedent was set because we weren't responding to a direct threat. Rather we were making unsupported assumptions.
I remember a time when most Americans worked together for a common purpose. I have also lived in a foreign country for a period of time where it was every person for him/herself. In recent decades, we have become like the foreign country I lived in and far too many of us are now motivated by selfish greed.
I see ongoing attacks on what has been the backbone of our country - The Middle Class.
People who have a million dollars seek to have ten million dollars. Those with ten million need a hundred million, etc. Where does it end?
In all of our major cities, there are increasing populations of homeless persons. How many of these persons had good lifestyles eight years ago?
I remember WWII, and I am now more afraid for the future of this country that any time in my lifetime. I hope I'm wrong, but I'm afraid we may be teetering on the brink of a calamity that will make the Great Depression look like good times. And it will make us vulnerable to an attack from another nation.
The irresponsible greedy people who caused this problem need to be held accountable for the mess they created, including the people who allowed it to happen. If banking laws allowed this to happen, the laws need to be changed. If banking laws prohibited what has happened, why weren't they enforced?
Presidential political posturing should not be a part of this. The only way a solution can be find is for both political parties to find a solution for the good of the American people. To do otherwise will lead to devastating consequences none of us really want to consider.
I believe it could happen.

Robert Ganshorn Robert Ganshorn | September 27, 2008 4:42 AM

Shakay, you remember America at her best. I think this time was directly before Eva Gabor became famous "for being famous." Americans now are so in love with celebrity that they have no connection to when people shared, sacrificed and pulled together to help one another. Greed and fear are now all we seem to be able to respond to.

Wait until folks realize they may not be able to buy fast food every day and even the McDonald's employees will be out of work. Americans will riot over Mickey D's... *sigh*

You poor easterners, you don't have In 'n Out Burgers. What a shame, that a burger worth a riot or two.

Robert Ganshorn Robert Ganshorn | September 27, 2008 4:46 AM

Ah, but Bil, it will do your cholesterol a lot of good!

Patricia, I think it's going to take a lot to get people to rise up against this government. Because no matter how corrupt this system is, people are so separated from their neighbors and communities that it would take a miracle to get people to start working together to fight for a common cause. Do we need to riot? Absolutely. But when you can't even get people on the Left to agree to cooperate amongst themselves (do we have consensus, or do we vote; should we allow property damage, or are we total pacifists . . . . I know, let's make a committee to talk about that . . .), I am really skeptical that they'll get their shit together. And it's unfortunate, because you know how well organized and will to move the Right is.

Quite honestly, if shit goes down in America I'm jumping ship and going to Holland. This country's not worth fighting for in my opinion. I'll go back to my family's place of origin (I'm first generation) and kick it with the Dutch. 'Cuz they know a thing or two about how to keep the banks running, and they don't give a shit if you're queer.

Curtis Morton | September 26, 2008 1:42 PM

I was originally against the bailout because I didn't feel that it was the responsibility of every taxpaying citizen to bail out the companies and individuals who made poor financial decisions; however, I think that our economy is so close to collapsing if something isn't done that some form of bailout needs to take place. I don't know what exactly (I'm not an economic guru), but something!

That "something" that has to take place is called letting this bad debt liquidate down to fair market price, thus leaving the companies with toxic balance sheet assets to go out of business or be taken over.

Yes it will cause a recession

However, putting these toxic assets onto the balance sheet of the "taxpayers" while rewarding the actions of the fraudulant hedge fund managers and investment bankers will lead to Depression.

The "bailout" is a band-aid. You cannot fix a debt problem by creating more debt, ergo "credit".

You know, it all started with the politicians not being held accountable for their messes, and now it has devolved to wall street and the high rollers being able to skip out on their responsibilities.

All in the name of "Saving" an economy that is going to go down the tubes anyway due to a federal deficit that hangs like an albatross around the neck of every man, woman, child and even those not yet born.

And what do the politicians and the wall street fat cats care, they have theirs. Bush is going to spend the rest of his life safe and sound, on the taxpayers dime, while the rest of the country has to deal with his legacy of debt and ruination.

He just keeps adding to the list, a war criminal, responsible for the greatest swindle and fraud in the history of the world, the gross violation of human rights in the name of the war on terror.

Yeah, we could sure use some more of that compassionate conservatism of yours Shrub.

this time though, could you use just a little lube?

Robert Ganshorn Robert Ganshorn | September 27, 2008 4:55 AM

I think we have to remember the wealthy, the truly wealthy, to not want to see the value of the dollar decline. This "bailout," which will likely be a long term profit, may well pay part of your social security someday.

Patricia, I am reminded of the ancient Chinese saying: "May you not live in interesting times."

Serena makes a good point. The American people have been inundated with materialism for more than 6 decades so they won't possibly ban together and do something about rich folks taking too much money. They just don't know how to work together anymore.

A brilliant, scheme, I suppose, by junk dealers after the second world war to get us to value ourselves based on what we buy, instead of our ability to actually accomplish anything.

I'm finding it a little difficult to assemble my thoughts. I'm no economist, nor am I a politician or lawyer. But I try to pay attention to the world. And while I find myself 'reeling', along with my American Brothers and Sisters (of all persuasions, not just GLBT family), I try to pay heed to the fact that there is more than just the American economy at stake here.

Unfortunately, America finds itself in the proverbial "Catch-22"; damned if they do/damned if they don't. There is probably no 'right' solution to the issue and the real problem is deciding which solution is the 'best' one.

Patricia is right though...the "kingdom" is falling apart and all the king's people are out to get your chickens in an effort to save it. Maybe even more, because once they've got the chickens, they'll also have the eggs. Then they could be back for the roosters, if you follow the drift.

Perhaps the most important thing to do is examine how all of this began and take steps to prevent it from happening again. While free enterprise is a wonderful concept, rampant greed and mismanangement of other people's money is something that warrants close public scrutiny. Yet it seems that the various public 'watchdogs' may have not been paying sufficient attention to schemes like sub-prime lending. An obviously successful marketing tool, perhaps, but what business sense does it hold? Even a budding entrepreneur understands the need to sell a product or service for more than it cost him. But was 'sub-prime' the beginning? Probably not.

The beginning is somewhere just after 9/11/2001. Don't misunderstand, please. I was as distraught at the events of that day as any American was. But I have to wonder if the actions taken to remedy that situation didn't contribute heavily to what has happened 'at home' since. All of a sudden, the leader's become tunnel-visioned in the 'war on terrorism'. Beefing up Homeland Defense--best part of the plan. Making an attempt to get the perpetrators, with a little help from your friends...that's ok. But does it make sense to keep spending money to to maintain a 'war' that has become futile? Does it make sense to focus on one issue outside of home to, what seems to be, the exclusion of all the problems at home?

Perhaps if the 'watchdogs' had 'some' of their eyes focused at home, some of what has now come as a major economic crisis could have been averted. Just maybe, if some of the trillions spent on waging futile battles abroad was spent on homeland issues, like health care and homelessness and joblessness and vigilance in what senseless business practices were developing...things might not have mushroomed into what has become a devastating economic disaster.

What it boils down to, I think--and like I said, I'm no expert--, is that it doesn't really matter what action is taken, the people of America will wind up paying for the mistakes of the greed-mongers regardless. And not just the American people...subsidary companies, investors, investment firms, banks, you name it, around the globe are feeling this.