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Who Caused the Great Crash of 2008?


US Politics & Gov't  (tags: bush, bushadministration, dishonesty, ethics )

Pastor Ti
- 2151 days ago - socialistworker.org
In 1880, Marx's collaborator Frederick Engels described capitalism's periodic crises in words that could have been written last week: Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are....



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Comments

Pastor Tim Redfern (581)
Monday January 26, 2009, 12:55 pm
This is not so much about pointing fingers as it
is about understanding the mess we're in, and how
we got here......as well as who should be held accountable.

Many thanks to all who will note, comment and forward!

Peace and Love to you all!
 

Cher Away Moving (1470)
Monday January 26, 2009, 1:09 pm


Thnx Tim!!
 

Morgan Griffith (225)
Monday January 26, 2009, 1:19 pm
The list goes on and on and of course Americans have to point the finger of blame back on themselves--we could have said NO
 

Brandy Ramos (235)
Monday January 26, 2009, 1:44 pm
History repeats itself. Every Thirty years there is a recession or depression. The only way to stop it is to change history. It might be eaaier said than done because we have to disappline ourselves into not living beyond our means. With the introduction of credit cards and high interest loans we were able to do things we normally cannot afford. But in the end the banks are the ones that have the last laugh when they start raising the interest on you so you cannot pay off the credit card or loan. We have to change this so that in thirty years (if we make it through this one) we can change our history.
 

Pete Conrads (91)
Monday January 26, 2009, 2:01 pm
Out of the chaos of a broken system will come a more evolved system that will be able to handle even more... Not saying though, that tough times "aint a comin" this is different then anything I have ever experienced......

Best wishes and warm regards to all.
 

Barb Knight (1680)
Monday January 26, 2009, 2:09 pm
Thanks Tim!
 

Marion Y. (322)
Monday January 26, 2009, 2:27 pm
From the article:

" Commerce is at a standstill, the markets are glutted, products accumulate, as multitudinous as they are unsaleable, hard cash disappears, credit vanishes, factories are closed, the mass of the workers are in want of the means of subsistence, because they have produced too much of the means of subsistence; bankruptcy follows upon bankruptcy, execution upon execution.

The stagnation lasts for years; productive forces and products are wasted and destroyed wholesale, until the accumulated mass of commodities finally filter off, more or less depreciated in value, until production and exchange gradually begin to move again.

Little by little, the pace quickens. It becomes a trot. The industrial trot breaks into a canter, the canter in turn grows into the headlong gallop of a perfect steeplechase of industry, commercial credit and speculation, which finally, after breakneck leaps, ends where it began--in the ditch of a crisis. And so over and over again. "

~ ~ ~ ~ ~

This is a great read! First, blame must be made so we don't repeat it. Bush, Bernanke, Paulson, Greenspan and all other economists before them knew EXACTLY how to crash the system...and they did it!! The media tells us we're in uncharted waters...know one has an answer because so many made "mistakes" is insulting to our intelligence. These are the greatest economic minds who have studied Marx and all other systems. They need to be held accountable.

Second, I agree with the Marx assessment that capitalism would fail. Capitalism is a pyramid scheme in a game played like the game, Musical Chairs. When the music stops, someone else is left standing without a chair. As the game continues and chairs are removed, only one chair remains for one person. In the children's game, the last person sitting wins the game. In the real world, if the final chair is pulled, we all lose.

Whatever system we end up using, Capitalism should be put in the graveyard. Thank you, Tim. Great article!
 

Rod Gesner (66)
Monday January 26, 2009, 3:49 pm
While as an Artist and Home Crafter;
I can't Say I am in favour of Totalitairianism/Communism;
But a Shift To Local Production For Foods Sake;
Giving Displaced Worker Small organic Farms;
Growing HEMP/POT for Food Fuel and Medical Uses...
Goverment Rewards For Clean Energy, Conservation Both of Limited Comercial Resourses, and Wild Lands and All Other Enviournmentaly Fragile Areas..
"Socialist" Policies Governing Food; Medical care and Housing; With NO Government Controll of Peasant Built Homes(Just Supplying The Tools and basic Safe Electric and Heating/Cooking equipt) While encouraging Alternatives of Recycleing and Other Creative Building Solutions;
Strict Controlls on overseas investment; (only for the betterment of The Locals) Not Thier Exploitation.
Labour Unions as Partners in BIZ; Giving Power and Responsibility to the Workers By Paying any Profits in Excess of thier New Lowered Negotiated Wages; In Shares; and Holding Managment Wages To Similar Standards.
Convert Electronic TOY Factories and Other Products based on Exploiting Children and Limiting thier Time To Enjoy the outdoors, Do Productive Work or Learning Skills; That Lead To Usefull Production; and Futures That Give Them Something To Live. For Instead of Teaching Them TO KIL KILL KILLL;
and Be a Button Pusher For The Automated Military.
We All Need To Do With Less Consumtion of THINGS;
JUST for Measuring Self Value....
We All Need To Find Way's To Reach out to Those less Fortunate;
We as the Citizens of the World;
Need To Take Responsibilty For The future of The Planet;
While Keeping Our Sense of Humour and Love of Life.
 

Elle J. (276)
Monday January 26, 2009, 4:04 pm
Noted! Thanks Tim.
 

. (0)
Monday January 26, 2009, 4:06 pm
Great job Tim :) noted,and forwarded......thanx much
 

Pastor Tim Redfern (581)
Monday January 26, 2009, 4:20 pm
Marion, my dear friend,
thanks for re-printing those
paragraphs.
I only wanted to mention that those paragraphs
were written by Frederick Engels in 1880......
129 years ago, yet doesn't it sound familiar?

Wonderful comments, folks,
and we've got a good discussion going here!
Thanks so much, everyone! :-))
 

Marion Y. (322)
Monday January 26, 2009, 4:26 pm
Rod ~ I like your solutions. Growing one's own food and/or buying locally is a must in the currently situation. Many of us need to start actively working some innovative methods into our lifestyle now for food and income. Not to cause anxiety, but we need to come to terms with reality as there are issues we are going to be dealing with shortly (in the US) that I will list here (according to Martin Weiss):

> The current Depression started in 4Q08 or 1Q09 (now) when historians look back on this time

> Unemployment will quickly rise to 10% (16% if all unemployed are included)

> Will see unstoppable chain reaction of bankruptcies

> Companies likely to fail...Automakers (GM, Chrysler, Ford), Air Transport (Jet Blue, Air Tran, US Airways, Air Canada), Retailers (Claire's, Loehmann's, Holdings, Duane Reade, Finlay Enterprises, Bon-Ton Stores, Gottschalk's, Saks Fifth Avenue, Talbots, Gap, Sears, Kmart, Best Buy, Macy's)

> Government will have to give up saving most of these "too big to fail" companies

Now, Congress members are cringing that they approved TARP. If they approve any other bailouts, they fear they'll be thrown out of office.

> The government is going to run out of resources because of difficulties in financing the federal deficit

> Federal deficit will balloon to at least $2 trillion (you knew this)

> All government is doing is replacing one debt crisis on Wall Street with another debt crisis in Washington.

> Interest rates will go back up

> The Dow will plunge to 5500

> The real estate collapse will enter a new, more advanced phase

> 2009 will be the year of the Great Financial Dustbowl, striking all forms of income. America will suffer a great money famine. It's going to be very ugly.

We all need to brace ourselves and start planning. This Depression may last for years. However, those who act now, reduce their expectations for living as usual, remain flexible and resourceful, will fare better than most. I believe we will survive this. And keep in mind, this is the system righting itself.

However, just as in the 1932 Depression, those responsible should have been held accountable so this would not happen again. It has happened again, worse than before, and was an intentional economic collapse so the thieves could run away with our money.
 

Susan M. (239)
Monday January 26, 2009, 4:48 pm
NOTED THANK-YOU
 

Lynn Christy (128)
Monday January 26, 2009, 5:00 pm
thanks tim, this is great stuff... you can bet i am going to have a garden this summer...:)
 

Joycey B. (750)
Monday January 26, 2009, 5:31 pm
Great article. Noted with big thanks Tim.
 

Sir Walk F. (124)
Monday January 26, 2009, 6:45 pm
I blame Jane Fonda.

And IKEA.
 

. (0)
Monday January 26, 2009, 7:44 pm
So many things that have to change but it has to start with one own self and say no. Its not that hard to do when your set at a budget and have too. Its going to get a lot owrst before it get better this I hear on the radio today. I thought to my self for pity sakes its bad enough. With gas prices creeping back up, food your paying more for less.. Here we pay almost $9.00 in food tax thats pretty steep. I guess you just hang on and hope and pray for the best. Thanks Tim
 

. (0)
Monday January 26, 2009, 8:36 pm
The difficulty we face in this current situation of capitalist disaster,is that the progressive forces are too small,and there is no serious challenge to capitalism as a whole.We place faith in Obama,who is the best of the alternatives on offer, I place faith in Obama for the same reasons.
All alternatives are based on humanising, and shoring up a rotten system.
Analytically I still share Marxist ideas,my prescriptions however are more social democrat-a bit of Marx,and a socialised market place,with participative democracy,involving a displacement of the elites,and a change towards locallised democracy,with human needs always placed above greed,and with capital restrained by tough social regulations.
Marx has been totally demonised,by those who fear Marxism the most-by the phrase "dictatorship of the proletariat" he meant the opposite of what we understand by the word "dictatorship" he meant rule by the overwhelming numerical masses-by "religion is the opium of the masses" he expressed a sympathy with those who have nothing,except religion for comfort.
Certainly Marx's theory of surplus value is indisputable-ie that workers are a commodity,and wages must be pushed down to the lowest possible level,to acheive maximum surplus value for those who own the means of production-that is a universal truth,and in America can be seen by relocation of business to China etc,Walmart workers having to claim benefits,a minimum wage that is below the poverty line,particularly when "the executive arm of the ruling class" ie the Republican's are in power.
The Bush years are an object lesson, in naked, undiluted class war politics, at their rawest.
 

Past Member (0)
Monday January 26, 2009, 8:54 pm
Good article Tim.

Overconsumption, corporate welfare, I could go on and on.

No one governmental system is the answer but Socialism has a lot going for it.

Capitalism in itself is doomed to fail if the workers don't have jobs or money to infuse into the economy!

Our swan song has been credit! My personal rule is if I can't pay it off in three to six months then I don't buy it.

Credit is the worst thing that ever happened to this country; I'll say this until the very end.

The American empire will fall one day. Not because I want it too but it's simple history. All empires fall eventually. It's not a matter of if but when. We are victims of our own greed and overconsumption. Who will buy us out on that day? Stay tuned true believers.....
 

serge vrabec (280)
Monday January 26, 2009, 9:37 pm
I thought i would through this in Tim, somebody sent it to me, hope you don't mind. I love the idea of money, its just the corruption and fraud it causes by the greedy that ruin the beauty of money and cause these economic "crises" . I guess the greedy and corrupt still think this system can go on as is, lol., that is laughable . I believe WE can fix it easily once the timing is right, It is a process. thx for the post Tim.


The Money System is a Confidence Trick
by Arian Forrest Nevin, J.D., citizen journalist


(NaturalNews) Banks loan us money they create out of nothing. Not only is this a scam, but it is outlawed by the Constitution, although our government allows this criminal activity. This activity is at the heart of our unsound money system, which is the direct cause of our nation`s current economic collapse. To reverse our economic decline we must have a sound and constitutional money system.

"I thought that, as a scientific man, I ought to know something about economics. So I studied the money system for two years and could make nothing of it. Then, one day, the truth dawned on me. What I was studying was not a system, but a confidence trick." The conclusion that the money system is a confidence trick comes from "the father of nuclear fission" Nobel Prize winning chemist Frederick Soddy.

A confidence trick is a scam, a racket, a rip off, a con. What makes the money system a confidence trick? Put most simply, money is created for private profit by banks rather than created for the common good by the government. Only the government of a nation should create money. The confidence trick that is the money system takes two forms.

First, rather than simply print money, the government, when it wants more money than it has obtained through taxation, issues bonds. The Federal Reserve then creates new money that did not exist before and uses this money to purchase the bonds. Then the populace, through taxation, is forced to pay the interest on these bonds. This is how the National Debt was created. Rather than impoverishing the populace by forcing them to pay interest on bonds, the government could simply create money instead of having the Federal Reserve create money to purchase government issued bonds.

Second, banks devised a subtle way to counterfeit money. Banks invented a separate and distinct form of money other than cash. Banks invented a kind of money which exists solely as entries in their computers. Over 99% of money exists in this form. Anytime a check, credit card, debit card, or money order is used, electronic bank money is being used. Whenever someone gets a loan from a bank the bank is in fact creating entirely new electronic money that did not exist before. Through this subtle form of counterfeiting banks have been able to take control of the money system. This confidence trick is played not only by US banks but by all banks the world over. The money system is the world`s longest running and most successful confidence trick.

Not only is allowing banks to create money and charge us interest a confidence trick, but it is also illegal! The Constitution explicitly gives the power to create money to Congress and to Congress alone. It does not authorize Congress to allow private corporations to create money. Article I, Section 8, Part 5 of the Constitution of the United States gives Congress the power, "To coin money, regulate the value thereof, and of foreign coin." The Constitution is the highest law in the United States of America. No law passed by Congress can override the Constitution. It is illegal for banks to create money, and it is illegal for Congress to allow banks to create money. The only way banks could legally create money would be if an amendment to the Constitution authorizing money creation by banks were passed. There is no such amendment. Sadly the Constitution is not a self-enforcing document, and if the people do not force the government to follow its dictates the government is free to ignore the law without consequence.

President Garfield stated, "He who controls the money supply of a nation controls the nation." Is it any wonder that against the will of the great majority of Americans the banks and Wall Street were able to get the bailout bill passed? The so-called bailout was nothing other than a massive transfer of purchasing power from the people to the banks and the acquisition of worthless debt and stock by the government at high prices from the banks. Banks were able to force this bill through because of the enormous power they wield from controlling the money system. The Secretary of the Treasury, Henry Paulson, is a banker. He is the former CEO of Goldman Sachs, and he conducts government policy in accord with the interests of banks and not of the American people.

The truth of the monetary system has long been withheld from the American people. We have been kept in the dark by the twin commandments put into effect through the influence and power of banks: we shall not have an honest money system, and we shall not examine the money system except under their direction. An honest, constitutional money system is the one thing banks will not stand for. The workings of the money system and the economy are always discussed in mysterious terms. People feel that it is something too complicated for them to understand. In fact, only falsehoods and false principles need to be discussed in mysterious terms. Any person of average intelligence can understand how the money system works. However, banks do everything in their power to keep people from understanding how the money system works, because if the majority of Americans ever did understand, then there would soon be a great call for the abolition of the unsound and dishonest monetary system and a call for its replacement with an honest and constitutional one.

Never on television, radio, in newspapers, or in magazines is the truth of the money system discussed. The people are to be kept in the dark and ignorant. Only on the internet and in a few books is the truth of the monetary system discussed. Those who literally create money can certainly afford to direct the discourse regarding the money system in a direction favorable to their interests. Economists prophesize nothing but economic doom and gloom for us upon the horizon. This is true so long as we have a dishonest money system. As soon as it is replaced with an honest money system the way will be open to much greater prosperity than ever before.

The worldwide economic crisis we face today is caused directly by the dishonest and unsound money system. There can be no liberty without economic freedom. There can be no economic freedom without an honest money system. The people must demand an honest money system. We must put such pressure on the government that they have no alternative but to execute the will of the people. Either we continue to pay billions and trillions yearly to be kept artificially poor or we demand honest US constitutional money. The choice is clear.
 

Blue Bunting (855)
Monday January 26, 2009, 9:49 pm
Sorry, that should read SILVERADO
 

Blue Bunting (855)
Monday January 26, 2009, 9:50 pm
How did we get here? Anyone else remember $ILVERAFO, the greatest bank robbery in hi$tory orchestrated by the Bu$h fmily?
 

Carol W. (119)
Monday January 26, 2009, 9:55 pm
Our Leaders all went to the same schools and they have all studied Marx. Remember when Bush said, "I don't mind Dictatorship so long as Im the Dictator". Marxism is NO answer but several good observations.

This collaspe is more about corruption at the highest levels, hoping to implement a Totalitarian System, a class system.

They knew Enron was bankrupt in Clinton's last years in office. When he didn't bomb the hell of of Afghanistan for their pipe line, they brought up the Lewinsky scandal to get rid of him.

(Not defending Clinton, but I do believe he knew where to draw the line)

Mortgages Comps swarmed and offered alluring deals.
(sub prime) No Income, No Job. No Assets – Ninja Loan
Very different than the 30 yr. Loans of the pass.
Why didn't lender's worry about defaults on payments. And the key to the sub prime crisis
Instead of putting their own money at risk . Immediately sold the loans on to banks and wall street.
SECURITIZATION... immediately sold the loans to Wall Street, and sold to investors 1,000 miles away from Detroit. Who were happy to pay a fraction in interest.

George Soros explains: At the same time mkts were deregulated and innovation was allowed and you created new synthetic instruments. CDOs & CSOs

The key to SECURITIZATION was the DISTANCE between the Mortgage borrowers in Detroit and the people who ended up receiving their interest payments.
In 2006 alone Sub Prime Lenders injected more than a Billion Dollars into areas of the city where home values were falling and prices were rising.

Ken Leigh had friends in High places.
Bush pushed through legislation that deregulated Energy Industry. Riding a Global Wave of PRIVATIZATION..ENRON snapped up assets all over the world. In Latin America alone, the company had interest in, Columbia, Ecuador , Peru, & Bolivia, where they laid a huge pipe line across the continent o Brazil.
And THANKS TO THE PERSONAL INTERVENTION OF HIS PERSONAL FRIEND GEORGE W. BUSH, ENRON was able to acquire a controlling stake in the largest natural gas pipe line Net-Work in the world.

THIS BULL MARKET WAS PROPELLED UPWARD BY; the Chairman of the US. Fed. Reserve Allan Greenspan ...As in John Laws time a stock market bubble could only happen if money was abundant. And by raising interest rates only once between Feb. 1995 and June 1999 GREENSPAN made sure it was...........THE REWARDS 4 INVESTORS were immense, and ALSO for the MANAGERS here at the Companies Houston HQ. In as little as 3 YEARS after 1997 the Enron stock rose by a factor of 5 from below $20 dollars a share to above 90 dollars. IT WAS THE MISSISSIPPI BUBBLE ALL OVER AGAIN. Top ENRON Executives earned 5.5 million each.

Nov 15, 2001 Allan Greenspan, The Chairman of The Federal Reserve; received the 'ENRON PRIZE FOR DISTINGUISHED PUBLIC SERVICE' adding his name to a roll of honor that included; McKail Gorbachev & Nelson Mandela.

Greespan deserved it, because without his monetary policies in the late 90's the ENRON bubble and the DOT COM BUBBLE that coincided with it, would have been impossible. Just a 2 weeks after the award ceremony. ENRON declared bankruptcy.

n many respects the ENRON PROBLEM has been a petri dish..
The fraudulent practices the led to ENRON'S rise and fall didn't end with K. Leigh. On the contrary the habit of hiding debt off balance sheet that ENRON pioneered has been a KEY component of the current crisis.
The ENRON problem comes from ENRON folks gainfully employed at banks and energy trading houses. So that rot is every where in the trading houses.


 

Carol W. (119)
Monday January 26, 2009, 10:19 pm
Even after the onset of this crisis the amount of money floating around planet finance boggles the mind. By one measure the sum of U.S. Money is now 8.7 Trillion Dollars/ up 12% since last year. And some people are still pocketing that cash.
In spite the onset of the biggest financial crisis since the depression, Last Year George SORO's Hedge Fund paid him, 2.4 Billion (last year 2008) 41,000 Xs more than the avg family will earned.
BUT WHAT IS MONEY ANYWAY, Tangible expression of relationship between borrower and lender. = money, Creditor and Debtor. A relationship built on trust, and whether money takes the form of silver coins, sea shells, bars of gold or clay.
In ancient Mesopotamia, S.W. Of Baghdad, nearly 4,000 years ago people used Clay Tablets to commit their selves to financial transactions. A debt of 4 measures of barley should repay the bearer of this tablet.
THE IDEA OF A 'BEARER' is what fascinates me.

There was one huge possibility created by the emergence of money as a system of mutual trust. A possibility that would revolutionize World History.
It was the idea you can rely on people to borrow money from you and pay it back at some future date. Thats why the root of 'Credit' is “Crado”, The Latin for, “I believe”.
Without the invention of Credit , the entire economic history of our world would have been impossible.
**BECAUSE we take it for granted we tend to underestimate the extent on which our entire civilization is based on the borrowing and lending of money. No, it doesn't literally make the world go round, but it does make vast quantities of people goods and services go around the world. From Babylon to Bolivia.***The provision of credit has underpinned the transformation of a planet of subsistence farmers into a Globalized Economy worth Tens of Trillions of Dollars.
THE IDEA HAS BEEN WITH US FOR CENTURIES. But no where was the credit business further advanced by the 16th Century than Venice. And the home of literature's most notorious money lender,;
'Shylock' in Wm. Shake sphere's ,...'The Merchant of Venice”

With any loan things can go wrong, Ships can sink, and that is why any who loans money needs to be compensated. ** We usually call the compensation “interest”, the amount paid to the lender over and above the sum lent. Or Principal. **
Over Seas trade of the sort Venice depended on could not operate without such transactions. And they remain the foundation of International Trade to this day.

But, why does Shylock turn out to be such a Villon.? Demanding literally a pound of flesh in effect Antonio's death, if he can't fulfill his obligations? Why is Shake sphere's money lender so heartless, the original of that financier who recurs time and again in Western Literature?
*********
One clue is that Shylock is one of the many Jewish Money Lenders in History. Jews who stayed in Venice for more than 2 weeks were suppose to wear a yellow 'O' on their backs or a yellow hat. And they were confined to a special area which became known as the Ghetto rever. The Jewish Ghetto in Venice were obliged to live and confined at night. Jews were tolerated in Venice, but for a reason. THE REASON The key was that Jews could provide a service that Christian Merchants were forbidden to do.

It was in another Italian City State, Florence that the key financial service of providing Credit moved out of the Ghetto and away from the gates of Hell to become the legitimate preserve of Banks. It was a transition symbolized by one family, the MetaGee'. With their ascent Credit came of age. Money Lending ceased to be disreputable. It became Glorious. And the foundation of a new kind of power. The dazzling legacy of the Metagee Families power still surrounds you in Florence today.

Nothing could better illustrate the extraordinary ascent of money. For what the Metagee achieved was the nothing less than the birth of modern banking. For 500 years few things in economic life have mattered more than the ability of individuals, companies, and governments to borrow from banks. As we are discovering today the banking system things can go very wrong indeed. You could say that the U.S. Has been built on borrowed money. Banks would give almost anyone a loan. Blue Suede Shoes, Barb Q Ribs, ...Tax Advisor help claim low income credits. A shop to loan money on equity of car. An advance on next pay check. Finally a pawn shop. Then when you have nothing left to sell..or to pawn..... There is PLZ Plasma Where you can sell your own blood for $25. a pop......
Talk about, ...being bled dry.” Imagine an entire economic sector based on people who are broke.*****

Am Banks even solved the problem “how to make money when so many low income debtors remain on their obligations.” ......REPO Business...In the bankruptcy capital of America repossing cars is a routine matter. Each week United Auto Recovery auctions off 500 reposed cars. The cars end up in the same car lots and sold much to the same people. And resold again. Relative ease which the bad debts are round up. When the house has been stripped bear you end up in bankruptcy court. Hammer out deals with Creditors. Even a fast – track lane. Its a mortgage and 2 cars.

In mid evil Italy bankruptcy was seen as a awful. Debtors prisons.
Since 1898 every Am. can file for Chapter 7 or Chap 13. Has become a right.

American law exist to promote entrepreneur ship.. Today's bankrupt may be tomorrow billionaire.
Mark Twain, the Comedian Buster Keaton, the Great Industrialist Henry Ford himself.... All of these men eventually flourished not lease because they were given a chance to try, fail and start over.

The sector preying on the poor is what makes me most ill.
Then Securitization made Banks think it would all be a windfall of wealth.
Again, preying on the poor making loans where they set the high interest rates that rose in a couple of years.

It is corruption and of course greed.

I heard again today that Citi Bank used a portion of their 'Bail Out' money to buy a new private jet at a cost of $55 Million.
And now the banks are also saying; " We were never told we had to loan money. This was to help us shore-up our short falls"..
What fricken nerve. But Paulson & Bush did exactly that. No strings attached, no rules, no demands, nothing.. Just a hand out of 350 billion.

But they want the auto makers to crush the union and are making all kinds of assanine demands with money that will actually help the working class.

And screaming bloody murder at Obama.
Bloody corruption and cronyism.
 

Electra Cy (1005)
Monday January 26, 2009, 11:51 pm
State Regulators tried to stop the Mortgage Fraud that started all of this, and they took it to the Supreme Court.
The Supreme Court allowed for this to happen by ruling against them in favor of the Federal Regulators that did not want the State Regulators filing charges and holding these Companies responsible. No Liability was set because of the Supreme Court Ruling!
 

Rod Gesner (66)
Tuesday January 27, 2009, 12:34 am
2 Governors Got Setup By the FBI; For Thier Part in Opposing Corrupt Banking Practices; Yes They appeared to have Broken the Law But Like They Weren't For Years Before;
it Just Became Expedient To Use Legal Blackmail instead of Having Them Killed...
However Rod Blagojavic Knows What the Feds Went after him For; isn't His True Crime.
This May Be a Long Court Battle that Should drag out Alot of the Hidden Details; if He Sticks By his Strong Defense; Not Slinking off to Let The Banksters Win By Default....
 

Marion Y. (322)
Tuesday January 27, 2009, 4:28 am
Serge ~ Excellent article on the money system is a confidence trick. We've been scammed!!!

Carol ~ Many Thanks for filling in the details of a massive corruption scheme at the top. Lending with interest is called "usury"...the very reason the usury villains were thrown out of China, Russia and other countries hundreds of years ago...For good reason: look what usury has done to our economic system today. These ancient civilizations knew something we are just now learning today: a banking system built on sand and usury is a scam. I agree...blaming Obama for the corruption that he may not be able to resolve is wrong. I say we lock up the crooks and get what money we can back. However, most of Congress would have to be locked up, and that is why they are fighting exposure of the truth and prosecuting Bush.

People have died to keep this information from public knowledge. It is time the masses learned the truth.

 

Pamylle G. (462)
Tuesday January 27, 2009, 6:34 am
We need to remember that totalitarianism is not the same as socialism or communism. A totalitarian state can use any ideology as an excuse to justify oppression, sadly enough. This article shows why socialism has been made into a dirty word in this country - because it provides the insight the wealthy elite don't want people to have.

Great info, Carol, and some very insightful comments here. Electra, this Supreme Court is well worth mentioning. It's a shamefully regressive Court in many respects. Scalia is a real piece of work.

Excellent article, Tim.

 

Tsandi Crew (95)
Tuesday January 27, 2009, 6:40 am
The up side is that this pushes us to do something about changing how we operate so we can save our planet. If we can't breathe or stand the heat, there will be no point in what we use for money.
 

Terrie Williams (773)
Tuesday January 27, 2009, 9:55 am
Thanks Tim. :)
 

Jim Phillips (3201)
Tuesday January 27, 2009, 12:04 pm
IMO. I put the blame on Phil Gramm for his role in suppressing regulation laws governing banks and other corporate power-money brokers. Unfettered capitalism. Anti-regulation people. And members of Congress who didn't pay attention.

Here is a story about Phil Gramm from Mother Jones: July/August 2008 Issue LINK:

http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

for those of you too tired to copy & paste, here is the story:

Foreclosure Phil

NEWS: Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped create today's subprime meltdown.

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America? Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.
Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee, he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more money to police Wall Street; during this period, the SEC's workload shot up 80 percent, but its staff grew only 20 percent. Gramm also opposed an SEC rule that would have prohibited accounting firms from getting too close to the companies they audited—at one point, according to Levitt's memoir, he warned the SEC chairman that if the commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania.
But Gramm's most cunning coup on behalf of his friends in the financial services industry—friends who gave him millions over his 24-year congressional career—came on December 15, 2000. It was an especially tense time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered dead—even by Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted. "Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional aide familiar with the bill's history.
It's not exactly like Gramm hid his handiwork—far from it. The balding and bespectacled Texan strode onto the Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could have followed what Gramm was saying. The act, he declared, would ensure that neither the SEC nor the Commodity Futures Trading Commission (CFTC) got into the business of regulating newfangled financial products called swaps—and would thus "protect financial institutions from overregulation" and "position our financial services industries to be world leaders into the new century."
Subprime 1-2-3
Don't understand credit default swaps? Don't worry—neither does Congress. Herewith, a step-by-step outline of the subprime risk betting game. —Casey Miner
Subprime borrower: Has a few overdue credit card bills; goes to a storefront lender owned by major bank; takes out a $100,000 home-equity loan at 11 percent interest
Lending bank: Assuming housing prices will only go up, and that investors will want to buy mortgage loan packages, makes as many subprime loans as it can
Investment bank: Packages subprime mortgages into bundles called collateralized debt obligations, or CDOS, then sells those CDOS to eager investors. Goes to insurer to get protection for those investors, thus passing the default risk to the insurer through a "credit default swap."
Insurer: Thinking that default risk is low, agrees to cover more money than it can pay out, in exchange for a premium
Rating agency: On basis of original quality of loans and insurance policy they are "wrapped" in, issues a rating signaling certain slices of the cdo are low risk (AAA), medium risk (BBB), or high risk (CCC)
Investor: Borrows more money from investment bank to load up on cdo slices; makes money from interest payments made to the "pool" of loans. No one loses—as long as no one tries to cash in on the insurance.
It didn't quite work out that way. For starters, the legislation contained a provision—lobbied for by Enron, a generous contributor to Gramm—that exempted energy trading from regulatory oversight, allowing Enron to run rampant, wreck the California electricity market, and cost consumers billions before it collapsed. (For Gramm, Enron was a family affair. Eight years earlier, his wife, Wendy Gramm, as CFTC chairwoman, had pushed through a rule excluding Enron's energy futures contracts from government oversight. Wendy later joined the Houston-based company's board, and in the following years her Enron salary and stock income brought between $915,000 and $1.8 million into the Gramm household.)
But the Enron loophole was small potatoes compared to the devastation that unregulated swaps would unleash. Credit default swaps are essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill—which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers—a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.
In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens of trillions of dollars of transactions were done in the dark," says University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing." Betting on the risk of any given transaction became more important—and more lucrative—than the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed the CFTC's division of trading and markets in the late 1990s, "were betting the subprimes would pay off and they would not need the capital to support their bets."
These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or had thought of the cataclysm it would cause." In 1998, Greenberger's division at the CFTC proposed applying regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."
Now, belatedly, the feds are swooping in—but not to regulate the industry, only to bail it out, as they did in engineering the March takeover of investment banking giant Bear Stearns by JPMorgan Chase, fearing the firm's collapse could trigger a dominoes-like crash of the entire credit derivatives market.
No one in Washington apologizes for anything, so it's no surprise that Gramm has failed to issue any mea culpa. Post-Enron, says Greenberger, the senator even called him to say, "You're going around saying this was my fault—and it's not my fault. I didn't intend this."
Whether or not Gramm had bothered to ponder the potential downsides of his commodities legislation, having helped set off an industry free-for-all, he reaped the rewards. In 2003, he left the Senate to take a highly lucrative job at UBS, Switzerland's largest bank, which had been able to acquire investment house PaineWebber due to his banking deregulation bill. He would soon be lobbying Congress, the Fed, and the Treasury Department for UBS on banking and mortgage matters. There was a moment of poetic justice when UBS became one of the subprime crisis' top losers, writing down $37 billion as of this spring—an amount equal to its previous four years of profits combined. In a report explaining how it had managed to mess up so grandly, UBS noted that two-thirds of its losses were the fault of collateralized debt obligations—securities backed largely by subprime instruments—and that credit default swaps had been "key to the growth" of its out-of-control CDO business. (Gramm declined to comment for this article.)
Gramm's record as a reckless deregulator has not affected his rating as a Republican economic expert. Sen. John McCain has relied on him for policy advice, especially, according to the campaign, on housing matters. The two have been buddies ever since they served together in the House in the 1980s; in 1996, McCain chaired Gramm's flop of a presidential campaign. (Gramm spent $21 million and earned only 10 delegates during the GOP primaries.) In 2005, McCain told a Wall Street Journal columnist that Gramm was his economic guru. Two years later, Gramm wrote a piece for the Journal extolling McCain as a modern-day Abraham Lincoln, and he's hailed McCain's love of tax cuts and free trade. Media accounts have identified Gramm as a contender for the top slot at the Treasury Department if McCain reaches the White House. "If McCain gets in," frets Lynn Turner, a former chief SEC accountant, "we'll have more of the same deregulatory mess. I like John McCain, but given what I know about Phil Gramm, I wouldn't vote for McCain."
As a thriving bank exec and presidential adviser, Gramm has defied a prime economic principle: Bad products are driven out of the market. In John McCain, he has gained an important customer, so his stock has gone up in value. And there's no telling when the Gramm bubble will burst.

TY, Tim.
 

Suzanna van der Voort (271)
Tuesday January 27, 2009, 12:16 pm
I think we can blame ourselves for a part, but the most to blame is No transparancy at all. When even banks admit, that they don't understand their own concepts any more and the commission who should keep an eye on the banks don't understand neither and did not do their jobs in a proper way...how could we prevent this from happening.
Most of the measures will be taken when the calf is already drowned, just what happenend now.
I hope this will never happen again.
Thanks Tim, a very interesting article
 

Michelle Lell (255)
Tuesday January 27, 2009, 3:15 pm
Great News Story Bro Tim...I totally agree!!!
 

Sir Walk F. (124)
Tuesday January 27, 2009, 4:59 pm
edit: "resources of the Commons *isn't* missed".
 

Sir Walk F. (124)
Tuesday January 27, 2009, 4:59 pm
So many great comments, everyone!

Its nice to see some dialogue about the average American's complicity in the larger credit issue.

I truly hope this opportunity for us to re-evaluate our relationship to the game of so-called Capitalism and its dependence upon squandering the resources of the Commons is missed.

I know that myself and many folks I know have been working tirelessly to position ourselves in a positive, constructive place so that when "these times" finally came to pass, we would not be caught community-less and in-debt to a system that can no longer afford to keep us alive.

This is an economic "thinning", and only the very strong will survive, i suspect. That means only major international corporations, and small pockets of communities who are not tied to the system by debt and wage-slavery.

I only hope that some of those who have been duped into believing the myth of everlasting prosperity will also take their resources they still have access to, and learn to share them for the public good instead of hoarding and wasting out of fear.
 

Electra Cy (1005)
Tuesday January 27, 2009, 9:51 pm
At the risk of upsetting peoples sensibilities I must add, Stop Buying 'Made in China, Taiwan, Mexico,' etc...
Buy Local, any buy American.
Help the small Businesses at every chance. They are our hope for future jobs!

China's poisoning us anyways..! :(
 

William Mosely (306)
Tuesday January 27, 2009, 10:21 pm
When I hear the truth, I don't care where it came from. There is only truth. These greedy "capitalists" deserve what every human deserves -- The Truth. Screw Bush; screw the GOP; screw the greedy bastards that have almost forced this once great country into bankruptcy.

We should be entitled to the truth, not more lies hiding the truth. And the entire world already knows that the Bush administration peddled lies for eight-long years. It is time we as a nation, start demanding the truth from our elected officials. If we don't, we deserved everything that comes down the pike!!! Do enjoy, America.
 

Marion Y. (322)
Wednesday January 28, 2009, 5:22 am
Wow!!! Such great comments ~ Pamylle...Jim...Sir Walkadelic...William!!! And some practical solutions that says we need to get in gear for what is to come.

~ ~ ~ ~ ~

If it's to be, it's up to me...
 

Pastor Tim Redfern (581)
Wednesday January 28, 2009, 11:31 am
I totally agree with Sir Walk:
Everyone of us who are Americans have a part
in the cause of this. I was forced to default
on a mortage two years ago, so there's MY contribution.

Those of us who are above a certain age were raised
to hear "socialism" and "Karl Marx", and automatically
think of negative and evil things.
I would submit to you that we were lied to, when we were
told and taught that Capitalism reigned supreme.
These days, I consider myself a Democratic Socialist.
When John McCain was denouncing President Obama as a
socialist last year, I was saying, "Good damned deal if he
is, because this country needs a large dose of socialism,
NOW!".
We need to re-examine what we've been taught about Democratic
Socialism, and I believe most people woild discover how we've
been lied to all our lives. Look at Europe: Free health care,
cradle-to-grave, free education, up to and including Doctorates.
Yes, the taxes in European countries are quite high, but take a look
at what it pays for. We need the same kind of set-up in the U.S.,
as quickly as it can be put together!

My deepest thanks to everyone for a terrific conversation here!
Bless you all!
 

Kathy Chadwell (365)
Thursday January 29, 2009, 1:34 am
I'll be blunt:)
The bush administration has made the millionaires into billionaires while wiping out the middle class.
 

Carol W. (119)
Thursday January 29, 2009, 6:32 pm
Yesterday I noticed an incredible sale at one of my favorite children's resale shops....Sadly the reason is they are going out of business due to a new law that takes effect in February. Remember that law that attempts to get to lead out of children's products by requiring (after Feb 9, 2009) anything intended for sale to children 12 and under, be third party tested for Lead? Many have argued that this law was very poorly written and was so broad as to impact thrift stores, rummage sales and garage sales. When I called the office of the senator who had written and sponsored the bill, they assured me that the Consumer Products Safety Commission would write the regs to enforce the law in a way that prevented these unintended consequences....

Well this store's owners told me that no matter how the regs are written, it will not protect them from the legal exposure that they will face after Feb 9 -- so they are folding.

And I am finding myself wondering if in fact these were the (privately) intended consquences of supporters who pushed this law through. (For example I'd expect Walmart to benefit from this law) It would have been just as protective of children and not damaging of the resale industry to write this law to apply only to imports or brand new products.

After Feb 9, now it appears that if you have children's clothing or toys you don't want, your only options will be to put them in the trash, or give them for free to others -- it is possible that Goodwill might not even take them....I am waiting to see what they will do.....I am hoping that at least if they feel it is too risky to sell them, they will simply put them in a "for free" spot for people to grab.

Think of the small businesses around the country that will fold now. Think of the increase in stuff going to our landills. This was the wrong law at the wrong time.
 

Marion Y. (322)
Friday January 30, 2009, 10:56 am
"And I am finding myself wondering if in fact these were the (privately) intended consquences of supporters who pushed this law through."

Good catch, Carol. There should have been a clause to exclude these thrift stores from that regulation, being that we all know the items are old, used and subject to having lead.
 

Monika D. (104)
Sunday February 1, 2009, 6:44 am
that article is interesting not only for US citizens...in each country similar mistakes been made and in each country we have mess now......seems like the same mistakes been made over centuries of our civilizations and always behind are greed, politics, interest small groups of people....I am just wondering when we will start learn from failure of past generations
 

Fred Hoekstra (6546)
Sunday February 1, 2009, 7:17 am
Tim,

Along the way, we also have to thank Lyndon Baines Johnson for his Great Society, which is another fancy word for Socialism. Remember, he is the President who stole Social Security Money to fund some of his Bankrupt Programs. We also have Jimmy Carter to blame, because he signed into Law new Regulations that forced banks to offer High-risk Loans. Yahoo had a story in regards to those Regulations a few weeks ago and my Brother-in-law who is in Risk Management with a Bank has confirmed this. Imagine, making it Mandatory for Banks and other Lending Institutions to give loans to people who cannot afford to pay the money back. No wonder the Economy went down like a House of Cards. Lastly, no one seems to understand that Congress is just as much to blame for creating so many nonsensical Laws that oftentimes do nothing to help the Economy, but rather to give them an excuse to give themselves a 30-40% raise. The Elderly and those who are Disabled should receive the same percentage of a Cost of Living Raise as they get.....But, that's another story.....
 
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