By Ellis Baxter
It was the best of times and it was the worst of times....so penned Charles Dickens. I say it was the worst day on Wall Street in decades, but the sorriest day is yet to come. Why? For the first time in history, the US credit rating has been downgraded. The once giant of the world in all things financial now lags behind Switzerland in its credit score. How this happened and who is to blame is a complex tale of greed, avarice and arrogance.
The hallowed halls of the banking houses on Wall Street are populated with men who gave themselves salaries in the hundreds of millions of dollars. These same individuals concocted a game of high stakes poker using the mortgage market as their betting chips. Changing the language of Las Vegas to pleasing sounding terms such as "triple A rated derivative swaps" allowed them to bet a stratospheric amount....$70 trillion on a mere $7 trillion of underlying mortgages. To do this required a few changes in the law. So outcome the checkbooks and in comes a stable of compliant representatives in Congress. This group of bought-and-paid-for puppets repealed the Glass-Stegal Act which had created a wall of separation between banks and investors. With nothing holding them back now, they were free to plunder the assets of the American people. In other words they were looking for a rube and the just met YOU!
If you want to talk about the financial mess we're in, Warren and I will be hashing this out on the Mason Dixon Line on Blogtalk Radio Sunday night at 9:30 p.m. Arizona Time and we'd love to have you join the conversation. You can call in at 949-266-6727.
Saturday, August 6, 2011
Monday, August 1, 2011
I'm the other guy and I'm madder than hell!
by Ellis Baxter
Ouch, my leg is caught in a shark's mouth. The issue is how to get my leg out of the shark's mouth or at least to get him to lighten up. It should be obvious to any intelligent individual that he should be concerned with the whole shark and not just his pearly whites. The basic reality is the shark takes two bites with a little tenderizing in between and down you go! The solution to the current debt crisis as presented by the President is to do it in two bites with a little tenderizing in between (that being "the committee") but in the end, down the economy goes.
The national debt should really be called the treasury debt for it is singularly only the debt outstanding to the US Treasury. It does not cover the account balances of dollars outside the country ($10 trillion) nor the debts owed by the US agencies such as Ginnie Mae, Fannie Mae, Freddie Mac, and Sallie Mae estimated to be something on the order $15 trillion. Nor does the so-called national debt include the balance sheet from the Federal Reserve. While not trying to be esoteric, it does not include the deficit spending for the next 12 months let alone as it should the next 10 years. So approximately-- in a real form debt analysis-- the Government is in debt some $52 trillion. If for perspective we include all non-federal government debt that would place the entire country--all 311 million people---in debt to the tune of $80 trillion.
Dealing with 15% of that number as if it were significant without any leadership whatsoever to address the total is in fact senseless. Until the country is willing to address the entire issue including the single most massive transfer of wealth from the public to Wall Street, nothing will be accomplished. To put it in perspective, we have been witnesses to the neoliberal presidencies of Carter, Bush I and II, Clinton and Obama....all in a head long charge to transfer the bulk of the wealth of the country to a handful of Wall street bankers, managers and crooks.
With my ears I heard Barack Obama say he did not run for president to bail out a bunch of Wall Street bankers, when in fact that is just what he did. Until these issues are addressed, comment on a minor debate such as that which stands before Congress today in an attempt to confuse the public about the debt crisis is nothing more than redundant. I would be remiss if I did not raise my cup to salute the 22 valiant members of the Tea Party Caucus that voted "no" in the House. As I see it, there are only a few winners in this debacle: those brave 22 patriots standing as if they were at Lexington and Concord in the people's House and Marco Rubio and Rand Paul. As these two patriots stood firm and unflappable on the Senate floor, I was reminded of James Madison and George Washington.
Ouch, my leg is caught in a shark's mouth. The issue is how to get my leg out of the shark's mouth or at least to get him to lighten up. It should be obvious to any intelligent individual that he should be concerned with the whole shark and not just his pearly whites. The basic reality is the shark takes two bites with a little tenderizing in between and down you go! The solution to the current debt crisis as presented by the President is to do it in two bites with a little tenderizing in between (that being "the committee") but in the end, down the economy goes.
The national debt should really be called the treasury debt for it is singularly only the debt outstanding to the US Treasury. It does not cover the account balances of dollars outside the country ($10 trillion) nor the debts owed by the US agencies such as Ginnie Mae, Fannie Mae, Freddie Mac, and Sallie Mae estimated to be something on the order $15 trillion. Nor does the so-called national debt include the balance sheet from the Federal Reserve. While not trying to be esoteric, it does not include the deficit spending for the next 12 months let alone as it should the next 10 years. So approximately-- in a real form debt analysis-- the Government is in debt some $52 trillion. If for perspective we include all non-federal government debt that would place the entire country--all 311 million people---in debt to the tune of $80 trillion.
Dealing with 15% of that number as if it were significant without any leadership whatsoever to address the total is in fact senseless. Until the country is willing to address the entire issue including the single most massive transfer of wealth from the public to Wall Street, nothing will be accomplished. To put it in perspective, we have been witnesses to the neoliberal presidencies of Carter, Bush I and II, Clinton and Obama....all in a head long charge to transfer the bulk of the wealth of the country to a handful of Wall street bankers, managers and crooks.
With my ears I heard Barack Obama say he did not run for president to bail out a bunch of Wall Street bankers, when in fact that is just what he did. Until these issues are addressed, comment on a minor debate such as that which stands before Congress today in an attempt to confuse the public about the debt crisis is nothing more than redundant. I would be remiss if I did not raise my cup to salute the 22 valiant members of the Tea Party Caucus that voted "no" in the House. As I see it, there are only a few winners in this debacle: those brave 22 patriots standing as if they were at Lexington and Concord in the people's House and Marco Rubio and Rand Paul. As these two patriots stood firm and unflappable on the Senate floor, I was reminded of James Madison and George Washington.
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