NEVER before has any sovereign government asked it’s citizens to bail-out foreign speculators who took a bath in the markets. (Over 50% of the financial toxic waste is in the hands of foreign investors.) We are talking well beyond a trillion dollars here.
It amounts to a great plan for a worldwide hyperinflationary blowout through the destruction of the currency used for international trade.
Section 8 (appropriately named) of the "Draft Bill We Wanted You Congresscritters to Rubberstamp" would have made the Secretary of the Treasury, for at least the next two years virtual omnipotent dictator over the economy of the United States, with ramifications worldwide. Shades of Mussolini’s Finance Minister, Volpe di Misurata, and his corporatist federations who ran things while Musso got the headlines.
Bush's Secretary of the Treasury proposed nothing less than a corporatist-fascist takeover of the United States of America with the rubber-stamp approval of the scared bunnies on Capital Hill and a frightened public.
Plan B is below...
There is a phenomenon I'll call here "the American conscience." Bottom-line, deep-down, we just don’t do that shit. We draw the line. The stink gives it away, even if our history classes were less than we deserved. The system irretrievably died 14 months ago; finally the "news" confirms to the public, via ex-CEO of Goldman-Sachs, now Bush Secretary of the Treasury, that it’s actually happened, and he has a proposal...
Uh-huh. Our blood for the transfusion to this corpse, you said? We The People politely informed the bunnies this was not acceptable, maneuverings of Barney, Chris and Nancy be damned. George Bush and his idiot son and their parasitical looting friends be damned.
We find ourselves at an interesting point in world history, a singularity, if you will. The time has come for us to pass through the barrier to the other side, where constraints formerly operative no longer exist. (In physics, use passing through the "sound barrier" as an example.) New possibilities open before us.
We don’t need to waste money bailing them out. We have an excellent solution in place: bankruptcy law. Shut them down and let’s use our resources to rebuild our economy.
How? Freeze the toxic financial waste to deal with later (most of it will be written off, as would gambling chips from a failed casino.) Pass the Homeowners and Bank Protection Act, keeping people in their residences, and protecting necessary banking functions, a firewall preventing social chaos. Take over the banking system, as FDR did, pull out the banking functions from Frankensteins like J.P. Morgan-Chase, reorganize them as properly-regulated chartered state and federal banks and thrifts, and use them with government generated credit to pump federal credit--money--back into rebuilding our productive economy and infrastructure. We build ourselves out of this mess. We have to grow ourselves out of this problem.
Has anyone noticed... There are no more free-standing investment banks in the USA! Poof! Collapsed, bought-out, or fleeing into the commercial banking sector to protect themselves.
The ever-so-trustworthy Bush administration wants to use the proposed bailout money to reorganize the banking system for the benefit of the few--to fund the big banks so they can eat the little banks while the FDIC and taxpayers absorb the losses! Massive consolidation of the banking system. Massive control of the parasites over the economy. – This is their proposal.
Until the whole thing blows up in a hyperinflationary bloody mess... We all become billionaires fighting over scarce food and fuel, while the transcontinental nation of our great founders is transformed into a looting-ground for the mega-financiers with their expensive shoes grinding into our faces.
There are writers already celebrating the demise of the United States. They are too damn stupid to realize they are riding a great wave that will collapse an all-too fragile thing called civilization they take for granted.
"It can’t happen here" and "there are too many protective safeguards in place" are bullshit.
Civilization IS fragile. Most Americans can’t see that at all. Which is odd, come to think of it, because many envision a similar fragility when contemplating global warming. (One hell of an irony beyond the scope of this diary.)
A worldwide hyperinflationary blowout through the destruction of the currency the global system is dependent upon for international trade will put us, via hyperinflation, in back-to-the-lander’s-survivalist utopia.
It will put us in condition’s not unlike those endured by Senator McCain and other U.S servicepeople endured while prisoners: constantly under threat of death, sparse food, weak health, little or no medical services, death and madness all around, propaganda as education, and longing for what once was and wasn’t appreciated when we had it. Not for "4 More Years," but for well more than a generation.
"A republic, if you can keep it," said Benjamin Franklin.
I say we work to keep it. I’m not trying to scare people into action. I am speaking the truth. I’m sorry it’s too scary to contemplate – or almost so – but it is the truth.
There IS a Viable Plan B!
Amidst the reality of banks collapsing at an accelerating pace, the bailout scheme, being insisted upon by Hank Paulson, Barney Frank, Chris Dodd, et al. is doomed to fail. If the bailout, even with lipstick, is passed, not only can it not solve anything, it will trigger Weimar-type hyperinflation immediately. It will bring down the banking system upon which we depend for civilization as we know it.
As many people inside Washington and on Wall Street perfectly well know, there is a Plan B: a three-step solution, which begins with bankruptcy reorganization, rather than hyperinflationary bailout.
First, pass the Homeowners and Bank Protection Act (HBPA). This viable proposal has been in the offices of Congressional staff and leading economists since Sept. 2007, and everyone serious, who has studied it, knows it will work. Had Congress shown the guts to pass the HBPA in 2007, this crisis would have been averted, and we would have already been on the road to constructing a new viable international financial system.
Second, Congress, in coordination with the Fed, must establish a two-tiered credit system. The Fed must immediately increase short-term rates to 4 percent, to send a clear signal that the U.S. government is behind a strong dollar. At the same time, Congress, using its Constitutional authority, must issue trillions of dollars in low-interest (1-2%) credit for long-term infrastructure projects, in the vital interest of the nation. We need high-speed rail and maglev, fourth-generation nuclear power, water management, new hospitals, repairs on our bridges and roads. These kinds of projects should be financed through capital budgeting, authorized by Congress at 1-2 percent interest, and distributed through viable (meaning separate from gambling activities, a la Glass-Steagall) state and federal chartered banks.
At the same time, the United States, Russia, China, India and Brazil must take the lead in convening a treaty conference to establish a new international financial system based on fixed exchange rates, along the conceptual lines of what Franklin Roosevelt did in 1944 with the original (not monetarist) Bretton Woods System. We can and must put the bankrupt current international financial system through reorganization, and launch, on a global scale, domestic capital investment in infrastructure.
Prominent Italian officials have voiced their support for the convening of such a conference, and Russian leaders, including President Medvedev and Prime Minister Putin, have voiced similar support, particularly if the United States takes the lead. Japan, Korea and others would join in short order.
No one in good faith can honestly claim that the current bailout scheme on the lips of Paulson, Frank and Dodd is the only option. It is not the only option. It is the option of a ruination of societies and nations. Plan B is available, is known and is viable, and can and must be acted upon now. What is stopping it is that elected and appointed officials, for one selfish reason or another, find it unacceptable.
They took an oath of office. It is up to us to hold them to it. Now.