Forum Post: Secret and Lies of the Bailout
Posted 11 years ago on Jan. 7, 2013, 5:58 a.m. EST by quantumystic
(1710)
from Memphis, TN
This content is user submitted and not an official statement
The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come
It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you'd think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we've been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?
Wrong.
It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.-----Matt Taibbi
Read more: http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104#ixzz2HHpCOty9
26 trillion in secret bailouts between 2007 and 2008. We need another audit to expose the rest.
Great post!
Matt Taibbi's Griftopia is next on my book list.
Favorite Taibbi quote - "Occupy Wall Street... a long-overdue middle finger to the financial elite."
Now, if we could only get mainstream America to understand all of this.....
"With an apparently endless stream of free or almost-free money available to banks – coupled with a well-founded feeling among bankers that the government will back them up if anything goes wrong – banks have made a dramatic move into riskier and more speculative investments, including everything from high-risk corporate bonds to mortgagebacked securities to payday loans, the sleaziest and most disreputable end of the financial system. In 2011, banks increased their investments in junk-rated companies by 74 percent, and began systematically easing their lending standards in search of more high-yield customers to lend to.
"This is a virtual repeat of the financial crisis, in which a wave of greed caused bankers to recklessly chase yield everywhere, to the point where lowering lending standards became the norm. Now the government, with its Implicit Guarantee, is causing exactly the same behavior – meaning the bailouts have brought us right back to where we started. "Government intervention," says Klaus Schaeck, an expert on bailouts who has served as a World Bank consultant, "has definitely resulted in increased risk."
"And while the economy still mostly sucks overall, there's never been a better time to be a Too Big to Fail bank. Wells Fargo reported a third-quarter profit of nearly $5 billion last year, while JP Morgan Chase pocketed $5.3 billion – roughly double what both banks earned in the third quarter of 2006, at the height of the mortgage bubble. As the driver of their success, both banks cite strong performance in – you guessed it – the mortgage market.
"So what exactly did the bailout accomplish? It built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Failier, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors. The bailout has also made lying on behalf of our biggest and most corrupt banks the official policy of the United States government. And if any one of those banks fails, it will cause another financial crisis, meaning we're essentially wedded to that policy for the rest of eternity – or at least until the markets call our bluff, which could happen any minute now."
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I excerpt the above from this brilliant article by the constantly clear minded Matt Taibbi. Thanx for this excellent forum-post and linked article. I'm in a hurry but got caught up reading this. Like all of Taibbi's work, this in depth article really is a 'must read', which we all need to read and digest and disseminate.
There has been a de facto, 'coup d'etat' carried out by The Banksters and their lackeys under the guise of the demoCRAZY deMOCKERYcy in The U$A and The People need to WTFU !!!
veritas vos liberabit ...
Barofsky, the TARP inspector, asked Treasury to include a requirement forcing recipients to explain what they did with the taxpayer money. He was stunned when TARP administrator Kashkari rejected his proposal, telling him lenders would walk away from the program if they had to deal with too many conditions. "The banks won't participate," Kashkari said.
That is some funny ass shit right there I am laughing so hard tears are running down my cheeks whilst my fists are clenched and my teeth grind.
It would be funny if it wasn't sad.
This is clearly the best evidence that the Wall st corp plutocrats run the govt.
So since the pols are serving the banksters & not us, we the people must force change.
Agitate all pols,and protest for all money out of politics, then replace pro corp conservatives w/ pro 99% progressives.
we may need to cut off the head of the dragon at this point.
Yeah, I wouldn't disagree.
killing dragons is not easy. they will devour you whole, rip you limb from limb, turn you to ash. many will die trying to slay a dragon.
Embrace all success no matter how small, expect slow progress, and serious setbacks. Some will be lost along the way, but we must stay strong and keep out eyes on the prize.
slow progress is not an option we are on the verge of disaster.
I suppose we could reject the small successes and slow progress. Doesn't seem smart but if you think that is better.
What exactly are you suggesting is the alternative.
wink, nod, you know.
I'm sure I do not know. Why can't you say? 'sok. no need to be embarrassed, I've heard it all.
fbi
What is "fbi"?
alphabet boys
Still don't know what you mean.