"My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub."
Grover Norquist
It’s time to retire your old trusty tin-foil hats. There's no need for it anymore. This is no longer a theory. The motive of intent to bankrupt America is on the record!
We now have a pretty good idea what Grover Norquist was plotting in his "Wednesday Meetings". They wanted to bankrupt the U.S. Government so that he and his fellow sycophants could "...drown it in a bathtub". This was partially accomplished in New Orleans. And now they are poised to finish the job.
To make my point, I will call on three essential Dairies from recent days.
First I will call on Inky99's "Ben Stein almost lets out the Big Secret" When I read this, I almost choked on my short ribs.
The crisis occurred (to greatly oversimplify) because the financial system allowed entities to place bets on whether or not those mortgages would ever be paid. You didn't have to own a mortgage to make the bets. These bets, called Credit Default Swaps, are complex. But in a nutshell, they allow someone to profit immensely - staggeringly - if large numbers of sub-prime mortgages are not paid off and go into default.
The profit can be wildly out of proportion to the real amount of defaults, because speculators can push down the price of instruments tied to the sub-prime mortgages far beyond what the real rates of loss have been. As I said, the profits here can be beyond imagining. (In fact, they can be so large that one might well wonder if the whole sub-prime fiasco was not set up just to allow speculators to profit wildly on its collapse...)
These Credit Default Swaps have been written (as insurance is written) as private contracts. There is nil government regulation of them. Who writes these policies? Banks. Investment banks. Insurance companies. They now owe the buyers of these Credit Default Swaps on junk mortgage debt trillions of dollars. It is this liability that is the bottomless pit of liability for the financial institutions of America.
If you smell fish, your not alone.
Now let's do the math.
If Grover Norquist said "My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.", I have to ask. Do you believe he means what he says?
Who does Grover Norquist hold meetings with at his famous "Wednesday Meetings"? Are they not the same Faux-Conservatives who are either directly involved with the deregulation agenda that led to this crisis, or their political and financial supporters? And then, when deregulation leads to melt-down, the same Faux-Conservatives try to force-feed the U.S. Government it's only way out. I smell bullshit! Oh yeah, and fish.
And for those history buffs out there, I have a curious little link to some early 20th Century shenanigans. Remember "The Business Plot"? The attempted coup against FDR led by JP Morgan, Remington Arms and the Du Ponts. And now it seems that Morgan Stanley and Goldman Sachs will be the biggest winners of the bailout.
And if anyone wants to flame me as a "conspiracy nut" or recommend me for the dungeon, I have a quote for y'all:
"Fool me once, shame on... shame on me. Fool me twice... I... I won't be fooled again".
George W (illful Traitor) Bush
It is now my belief that this administration is compatible to a cornered rat. They now want to hold this over our heads in an attempt to blackmail the Democrats in Congress and Barack Obama. If they can't have the country, they will burn it to the ground, leaving Barack Obama and his campaign with the morbid task of being the pole-bearers of a dead economy, and a failed state.
Now, for the up side of this OP. We have tools at our disposal. I will let these nest two posts explain:
Dr Squid, in Solution: Cancel all Credit Default Swaps offers what seems to be a workable idea with an assist from Moon over Alabama.
* all financial exchanges and markets of the world close for a week
* CDS are declared null and void and new CDS creation is forbidden until new regulation is in place
* the publicly dealt financial entities have seven days to figure out and publicly restate the value of their liabilities and assets excluding all CDS
* a onetime windfall tax will be created that socializes overt advantages some entities will have from this
* the proceed of that tax shall be used to prop up the capital of the big losers in a program comparable to the Reconstruction Finance Corporation of 1932.
It has to be done. Cancel these swaps that on paper pay more than anything that's connected to reality on this planet. Then let the old regulated mortgage insurance pay what is supposed to be paid, or let bankruptcy judges change the terms of the loan so the holders of Mortgage Backed Securities can get a little bit more than they would get in case of foreclosure.
You don't get what you say you were promised when you bought a contract that says to pay $2 million in case of a $200,000 default? Tough tuchus. Buyer beware applies to you too.
Limit all CDS's to one policy per mortgage holder. Simple. Elegant.
Then there's the solution that the Swedes came up with as portrayed by smckenzie23's "How Sweden solved thier financial crisis", in a great catch from the NY Times.
It does to Sweden. The country was so far in the hole in 1992 — after years of imprudent regulation, short-sighted economic policy and the end of its property boom — that its banking system was, for all practical purposes, insolvent.
But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.
Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
Now we know, or at least, we should have known. There is no excuse for our party to fold on this "Bailout Ponzi Scheme".
We have remedies. It will be painful, I know. But sacrifice is an American Ideal, no matter what McCain and the Republicans think.
Now if these actions that lead us to the brink, do not rise to the level of treason for all involved in the "Wednesday Meetings" and the "Starve the Beast" strategy of the Bush/Norquist/Fascists in Conservative clothing zealots in the eyes of our leaders, then our country will not last through the next few years.
God be with us.