Upholding the Horrendous Business Practices of US Financial Institutions: "Thank You, Ladies and Gentlemen"
By Richard C. Cook
Global Research, September 22, 2008
The purpose of this brief statement is publicly to express my admiration and amazement at the way the Chairman of the Federal Reserve, The Honorable Ben Shalom Bernanke, the President of the Federal Reserve Bank of New York, The Honorable Timothy F. Geithner, and the Secretary of the Treasury, The Honorable Henry M. Paulson, have come together so effectively to solve the financial problems of the United States of America.
After intense deliberation, and with the help of thousands of highly paid economists, accountants, and other professionals on their staffs, these three high officials of our leading financial agencies have devised a plan that is breathtaking in its simplicity, broad in its scope, and non-partisan in its appeal to our worthy representatives in Congress.
They have also served well the President of the United States , The Honorable George W. Bush, and the Vice-President, The Honorable Richard B. Cheney, those two dedicated and hard-working public servants to whom we have entrusted the spirit, the integrity, and the prosperity of our republic.
The three fine men mentioned above have decided to recommend a plan whereby several trillion dollars of bad loans will be subtracted from the books of any number of financial institutions threatened with further bankruptcy, including foreign-owned institutions, and will be added to the books as liabilities or potential liabilities of the United States government.
Even though these debts were incurred by the said financial institutions through horrendous business practices and frequent outright fraud, making them the responsibility of myself, my fellow citizens, our children and grandchildren, and our other posterity in perpetuity, has a devilish touch of whimsical genius about it.
I am sure that our Congress, consisting of men and women who removed all the regulatory safeguards that might have prevented such a debacle, and often were elected to office through campaign contributions made by executives of the financial institutions now in danger of collapse, will immediately ascertain the wisdom of these proposed measures and speedily approve them.
To all those who have so boldly stepped forward in our country’s hour of need, what more can I say, but “thank you ladies and gentlemen.”
Richard C. Cook is a former U.S. federal government analyst, whose career included service with the U.S. Civil Service Commission, the Food and Drug Administration, the Carter White House, NASA, and the U.S. Treasury Department.
We Can Stop Paulson's Plunder
By David Swanson
Global Research, September 22, 2008
There does not seem to be any way we are going to avoid shelling out a major amount of money to save banks from the unregulated greed of bankers. Dean Baker and Doug Henwood and every person with any economic expertise whom I find credible predicts disaster if we don't.
But, as Baker pointed out on Democracy Now! this morning, the bailout can punish those responsible rather than rewarding them. It can also be done without creating new dictatorial powers for the executive branch of our government.
Congress must reject Paulson's Plunder and enact a plan with these progressive principles from the Backbone Campaign:
A. The people who caused the problem or profited most should pay for it
1. Highly compensated executives total compensation should be capped or taxed heavily as a condition for being bailed out.
2. Tobin tax on all transactions in Finance, Insurance and Real Estate including currency transactions.
3. Government takes an equity stake, proportionate to the size of the bailout
4. Tax hedge fund managers' income
5. Accountability - fire executives of failed companies as done in the UK, and abrogate their severance packages.
6. Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers.
B. Re-regulate to prevent this from happening again
1. Direct the Federal Reserve to intervene to prevent asset bubbles.
2. Extend reserve requirements to new security categories
3. Regulate the packaging of loans so they can be evaluated, rated, and priced rationally.
4. Regulate hedge funds and private equity funds in a way comparable to banks
C. Include Main Street in the bailout and invest in a new productive economy
1. Establish a moratorium on foreclosures, renegotiating mortgages or institute a rent-to-own plan to keep people in homes.
2. Create a major economic recovery package which puts Americans to work at decent wages, in productive jobs that add value to homes and communities.
3. Invest the taxes on speculation, executive compensation, and the surtax on the wealthy in clean energy, infrastructure, education, and health care.
You can send this proposal to Congress by clicking here:
http://democrats.com/stop-paulsons-plunder
