Playing Bait and Switch with our Economy

What part of the words “Troubled Asset Relief Program” does Henry Paulson not understand? The taxpayers of the United States just gave the most powerful financial companies in the country more than $700 billion in order to prevent the rest of our economy from slipping into a depression.

However, the Treasury Secretary said that he simply changed his mind and will not use those funds to purchase the troubled assets that lawmakers gave him permission and instructions to buy. Instead, he’ll use the money to purchase the precious “preferred stock”.

Therefore, the tangible relief that was sought won’t happen. The toxic assets are still on the books. They banks already got the money but they are not lending. Wall Street still recognizes the problem and continues to devalue these companies. There has been no tangible progress since the bail-out was announced. However, the taxpayers of the country are light in the wallet to the tune of $700billion.

In order to fix our economy, serious steps need to be made in order to turn this situation around. I believe our first action is to look at our energy policy and the way it has affected our country.

According to the Dept of Energy, in January 2000, the average price of gas was $1.35/ gallon. By June of 2008, the average price was up to $4.13 per gallon. Although our consumption increased by less than 2% during that period, the price went up by almost 400%. The projected usage of India and China 10-15 years from now was always their justification for raising the price. Existing consumption and supply patterns didn’t matter.

The first victims of this increase were the transportation companies. Operational expenses went through the roof as they tried to move people and products from point A to point B. To my understanding, for every penny that the price of gas increases, the airlines lose $25 million.

There was no way our economy could sustain such an increase outside of normal supply and demand tendencies. Many companies initially tried to simply handle doing business with lower profit margins; but, later had to pass on their own price increases to their customers. It became increasingly difficult for businesses to function under their existing pricing and payroll structures. Therefore, many businesses were faced with raising prices, employee layoffs, or both.

Obviously, it became much more expensive for Americans to fuel their vehicles and get back and forth to work. But during this period, the price for everything went up. The price of eggs, milk and cheese all doubled. General Mills and Kellogg were reducing the sizes of their packaging and still raising their prices. Customers were getting far less for much more.

The price to heat your home in the winter and cool it down in the summers also increased. Many regulated power companies lobbied their state PUCs for price increases to make up for their increased delivery costs.

The only thing that didn’t go up during this period was Americans’ salaries. The American consumer was now forced to attempt to operate their homes on the same income but with much higher expenses. The sales of luxury and other non-essential items declined substantially. The automobile manufactures started to announce significant decreases in sales figures. Retailers began to report 20, 25 and sometimes even 40% decreases in sales.

Americans were broke and were not spending their money on new fancy items that they could live without. Disposable income became non-existent.

As more companies went out of business, others continued their lay-offs. More victims were created out of this recession. An obvious victim was the housing market. Not only could Americans no longer afford any new gadgets and cars, they could no longer afford the homes that they worked their lives to purchase, maintain and leave to their children.

Although some Americans fell prey to some punitive loan structures and adjustable rate mortgages that always went up and never went down; many others could simply no longer afford the monthly payment that was no problem for them just a few months ago.

It’s easy to simply blame the foreclosure crisis on our country’s economic woes. However, until we diagnose what created the foreclosure crisis, we’ll be forced to repeat this cycle. We cannot allow any industry to manipulate the delicate balance of supply and demand that we have in this country.

American capitalism has been successful because of its win/win premise. In order to make business sustainable, it has to be good for both the buyer and the seller.

Israeli Farming, Pilfering the Treasury and Destroying the Constitution

In their second invasion of Gaza in two weeks, Israeli tanks go into Gaza and wipe out those dangerous Palestinian crops and farmland. Gotta wipe out those threatening crops. Public safety hazard. Does anyone else find it peculiar that Israel has decided to escalate the violence since Barack Obama was elected?

Henry Paulson and Ben Bernanke face Congressional panel about their complete mismanagement of taxpayer funds along with their trial and error approach to saving our economy while further enriching their Wall Street cronies. Meanwhile, in an attempt to be as contradictory as possible, they announce their disapproval of bailing out U.S. automakers. They just need to say "Screw you suckers! We've taken the money, gave it to our boys and there's nothing you can do about it!"

The U.S. government has been asking foreign countries to hold Americans indefinitely without charges because of their inability to do so here in the states (legally). The sooner this administration is gone the better. They have absolutely NO regard for our Constitution or the laws that have governed this land for centuries.

Mark Cuban fights back against the insider trading charges levied by the SEC.

What year is it? 1400? What's with this new emergence of pirates? Now, they're asking for a $10M ransom. Tell you what, if these guys continue to steal oil, Bush himself will come and get them.
Michael Steele gets some love for his desire to be RNC chair.

Ignoring Pink Elephants

Talk about penny wise but dollar foolish!!!!!

The SEC has charged Dallas Mavericks owner Mark Cuban with insider trading. Apparently, Cuban withdrew his $750,000 investment after he became aware they were obtaining other private funding.

Now, I don't really care too much if/how Mr. Cuban sold that stock. However, I find it very peculiar that this is the case that the Feds seem to have to prosecute. After going after Martha Stewart for avoiding a loss of less than $50,000, Mark Cuban's $750k looks to be gigantic.

Meanwhile, Exxon Mobile has posted world-record quarterly profits once again. Over the last 6 years, the oil industry has consolidated more wealth than any other in American financial history. Regardless the cold, hard figures of supply and demand, they've strong-armed and "speculated" themselves to their profits, while leaving the rest of our economy in shambles.

They need to be ashamed of themselves. To blindly hurdle billions while targeting thousands speaks to their credibility.

Nothing there to see, I guess.

Finding a Long Lost American Friend

Wow!! Look at what we have here! President Bush has once again found capitalism! Man, I wonder what took him so long to begin looking for it. Why didn't he look for it when his boys at the oil companies and their cronies at the hedge funds were bilking the American consumer of hundreds of billions of dollars through their collective manipulation of gas prices? Surely, they didn't use supply and demand to justify the rates that made American consumers pay American-record gas prices for over 7 years and therefore give them world-record profits.

Since Paulson just arranged to give his friends at the other financial companies more than $700 billion of taxpayer dollars, why didn't anyone mention capitalism then? Surely that move was closer to Chinese communism than American capitalism.

Now that others outside of his little clique are in line to benefit, he pulls out his maginifying glass and starts looking for capitalistic priniciples in the haystack that is the U.S. economy. Hopefully, he'll find our Constitution under there as well.

Gifts to the Wall Street Boys, Corupt Senators and the best Foreclosure Story you'll Read

The American taxpayer bails out some of the largest financial instutions in the country to the tune of $700 billion. They in turn, rapidly secure $150 billion to grease the pockets of their executives.

What better sign do we have of global warming than the record LOW temperatures that we've been seeing?

Feds prepare to cut interest rates to 1%. This means almost nothing to the American consumer. It's just another gift to the Wall Street. The interest rates on our credit cards and ARM mortgages will either remain the same or increase.

Charles Barkeley is not the biggest fan of Fox News. Hey, join the club!!!

Pretty interesting blog post on Michelle Obama. It's entitled "Fear of a Black First Lady". The title speaks for itself.......Doesn't matter though. Her hubby is ahead in almost every battleground state.

Military brass decide that it would step aside in case an Iraqi civil war begins. WTF??!! This couldn't be because we're pissed about their changes to the security agreement?

A Catholic priest in Australia angers the masses by saying that Jesus is not God. That should go over well in the Christian community. Personally, I think that it's relatively easy to distinguish between crea-TION and the Crea-TOR.

Massachusetts State Senator caught on tape putting bribe money in her bra. Doh!!!!

Convicted felon Ted Stevens is still running for office despite being convicted for corruption. Hey, just a thought. Can he cast his votes from his jail cell?

This has to be one of the best stories that I've read that has come from the foreclosure crisis.

Good for the Goose. Good for the Gander

On April 20th 2005, President Bush signed into law a new bankruptcy bill that would change the way consumer debt is handled in this country. For most Americans, bankruptcy would no longer be a vehicle to get a fresh start away from heavy financial pressure and inability to pay current obligations for hospital bills, divorce, job loss etc. Even confirmed victims of identity theft would be subject to the new reform guidelines. Those going through bankruptcy would have a much greater burden of proof and far more rigorous standards to prove financial hardship and inability to pay off their overwhelming debt. Credit card debt would be the toughest item to get included in their bankruptcy package.

Obviously, the signage of this bill was widely recognized as a win to banks, credit card companies and auto manufacturers who many times finance the autos they sell. The banks and credit card companies can now be guaranteed a far greater return of the debt they are owed by forcing the debtor to undergo a gauntlet of judicial hurdles before relieving themselves of any debt. According to the proponents of the bill, these “dead-beat” borrowers needed to be accountable for their bad financial decisions.

Those who opposed the deal argued that the new standards were completely one-sided and favored the banks without any consumer protection balance measures. Several legislators proposed provisions that would limit excessive interest rates and the lending practices that would lead to unaffordable monthly payments. However, these provisions didn’t make it onto the final bill.

Fast forward two and a half years.

Recently, the United States Congress approved giving around $700 billion of taxpayer money to some of the most prominent banks and financial institutions in our country. This bail-out will be used to eliminate debt and provide an influx of cash that would help restore confidence in today’s financial system. Where’s the accountability that they promoted so vehemently for consumers?

This plan has been heavily supported and promoted by President Bush, Treasury Secretary Ron Paulson and anxious Wall Street investors who are scrambling like mad in order to prevent additional heavy losses created by defaults on the loans they provided

The same companies that provided or insured these loans are the same ones now seeking to be bailed out by the American taxpayer. The same companies that forced the bankruptcy bill down the throats of the American public are the ones that hope to be left unaccountable for their own actions and bad decisions. Clearly, if consumers are at fault for signing for loans that they could not afford, these banks need to be equally at fault for giving it to them. However, now they seek to be “bailed-out” while the consumer on the other end loses their home. Well, if that’s the case, they should lose their businesses.

Surely, to see this coming didn’t require the reincarnation of Nostradamus. The writing on the wall was as clear as Michelangelo’s “Creation” painting at the Sistine Chapel. The banks knew this was coming, but still made the loans.

However, they do not want to be subjected to the same humiliating bankruptcy process that they strongly advocated for their troubled customers. Smarter banks that did not provide these risky loans will now have to compete with other financial institutions that are subsidized by the federal government. Certainly, it would be tougher for their businesses to compete. Although their competitors have shown severe operational deficiencies and make questionable decisions, they are financed by taxpayer dollars that guarantee their existence. What’s American about that?

In the vast history of business in the United States, many companies have failed. It would be nearly impossible to determine exactly how many companies have gone out of business. When most companies fail to make smart business decisions, they end up in front of the bankruptcy judge; likewise for the consumers who cannot properly manage their finances. However, Federal Reserve Chair Ben Bernanke says these companies are simply “too large to fail”, so they aren’t subjected to the same process and procedures as the rest of us.

It is against the equal-protection provision of the U.S. Constitution to allow some companies to fail while the well-connected companies are given taxpayer dollars in order to forgive them for their mismanaged funds. Large companies fail all of the time. However, the solution is never to nationalize the companies. Usually, they are auctioned off to preserve the free-market system and the American way of doing business.

If these companies cannot manage their finances, they need to be subjected to the same procedures as they promoted for their consumers. What’s good for the goose is good for the gander.

Taxes, Militants and Cities on Fire

Government forces nationalization on the banks. However, Bush says that government's involvement would be "limited and temporary". Yeah right. How many times have we heard that about ANY government program. Anybody remember how long it took to get rid of the Spanish-American war tax???

Not all banks are thrilled about the prospect about competing with government subsidized financial institutions. The ones that have handled their businesses properly are even more pissed.

Poor people caused the crisis?

Israelis believe that occupying Jerusalem's Muslim sector and bringing a heavy influx of Jews will bring peace. Well, that's their story. However, according to Jesse Jackson, the Zionists influence on our country would be minimal under an Obama administration. WTF??!! Is the dude working for the McCain campaign?

Rush Limbaugh says blacks are taught at an early age to hate this country.

Radio talk-show host Bill Cunningham says that 100 cities will burn if Obama loses. He also says Flavor Flav, 50 Cent and Puff Daddy are in charge of the inaugural ball. Nothing racial there I guess.

Debate Night, Financial Crisis and War Drums

The election is getting closer. The second Presidential debate is tonight. It could be the last time John McCain has to get the momentum back into his campaign. From the recent polls, it looks like it will an uphill fight.

Bringing up McCain's role in the Keating 5 scandal doesn't help his case at all. Neither does his past affiliations with groups like the Council of World Freedom.

Russia is sending nuclear warships to Venezuela for joint military exercises. I guess this isn't very important. Meanwhile, Iran forces down Western plane flying over its airpace. Of course the Pentagon denies.

More sad stories from the recent American financial crisis. Man in upscale neighborhood kills his family, then himself over financial difficulties and not being able to find a job.

CEO of Lehman Bros punched out at health club after testifying before Congress. Everybody isn't buying his bullshit.This administration continues to play cronyism with our government. As the former CEO of Goldman Sachs, Paulson now surrounds himself with all Goldman people to handle the bailout.

Speaking of the bailout; will we now need to bail-out our retirement and pension funds that have lost $2 trillion??

Barney Frank says the Republicans are using racial overtones while blaming the housing crisis on blacks and the poor. Yeah, like those churches, fitness centers and those with good credit getting screwed by bad deals don't count. Not to mention people like Ed McMahon and White House Press Secretary Dana Perino.

Negotiations continue between the U.S. and the Iraqis over our troop presence in their country. We're pushing for more bases. They are pushing to get us out of there. Why they have to "negotiate" foreign presence in their country is beyond me.

Virginians focus on race in the upcoming election. They say you can't be for an African-American "if you believe in the Bible". What????

Wednesday's Tidbits

This communist-style bail-out is driving me crazy. Never in the history of our country has anything like this happened. Of course, we've had other bailouts. But, nothing even close to this proportion.

Warren Buffet buys $5 Billion dollars of Goldman Sachs preferred stock. He just financed his own little private bailout.

I wish he could finance the rest of them instead of us having to do it. Of course, there's a tax increase heading our way because of the bail-out. Even after it's done, what are the chances that we'll ever see our money back?

BTW, what's the urgency in having this bill rushed through Congress without reviewing the details and fine print? Neil Cavuto also says that these companies should have known better than to loan money to minorities. WHAT???

McCain dropping quickly in the polls because of the recent financial crisis. Now, he wants to suspend his campaign and cancel the debates so he can concentrate on the economy. Yeah right. He's trying to prevent himself from drowning!! It can't help that his campaign manager, Rick Davis, has taken $15k a month from Freddie Mac up to last month! BTW, Obama says the debate is on. Can't weasel out that one so easily.

Obama making up ground in Indiana. I know one mother of a blogger that deserves some recognition for her leg-work.

More Proof that We're Being Ripped Off

Yesterday, the EIA announced that oil consumption for the first half of 2008 dropped by the largest percentage in 26 years. Demand for oil decreased by an average of 800,000 barrels per day compared to this time last year.

Also according to the EIA, oil supplies increased by over 100,000 barrels. However, the price of gasoline went from $3.07/gallon to $4.11/gallon.

Supplies are up. Demand is WAY down. But, the price increases by over 33%?? What gives?

The speculators control the market. They are allowed to ignore supply/demand and charge whatever they want.

Until we get them out of the market, it doesn't matter how much we drill.

Monday's Musings

The United States spends $51M to fly illegals back to Mexico. All of this money and they still will not use an American carrier.

R.I.P. Isaac Hayes. Man, the musical world will not be the same without you. Also, R.I.P to Bernie Mac. You represented Chicago well. This one really hurts. The world and the 'hood just lost one of its favorite funny men.

OPEC income hits record. Who would've guessed???

China overcomes the U.S. as the world's largest manufacturer. Given our obsession with outsourcing American jobs, this comes as no surprise. We're becoming a consumer nation that produces little.

Wednesday's Tastings

Looks like Congress is finally stepping up its actions to reign in the oil speculators that have been manipulating the prices and destroying our economy. Of course Senate Republicans and the White House is against the measure. They don't see a problem in the least. All is well in their eyes. Their guys have made billions under the current system.

Condi Rice is in Singapore trying to convince the North Koreans that they really need to dismantle their nuclear program. If we still have to convince them, it means that they haven't stopped. Looks like we once again fell for their games.

Bobby Jindal removes his name from consideration to be McCain's VP.

Feds drop case into Al Sharpton's finances.

Michael Savage is in deep trouble for saying 99% of autistic kids are simply brats that lack parental discipline.

Obamamania hits Europeans. One German newspaper is calling him the black JFK.

The Dems are starting another push for openly gay service in the military. "Don't ask-don't tell" is about to be revisited. I'm sure that's going to really motivate and inspire the troops.

Nigerian militants are once again threatening the oil pipeline. I'm sure that the speculators will raise the price of oil because of this. Now, it doesn't mean that they'll actually attack the pipeline or really hurt supplies. But, the threat alone is enough to raise the price. In their world "hypothetical" supply and demand is more important than "actual" supply and demand.

On a personal note.....Nas' new CD comes in at #1, dropping Lil' Wayne's "Tha Carter 3" down to #2. Screw that Soulja Boy mess. This is true hip hop at its finest.

Also on a personal note DA BEARS start camp today. Oh yeah!!! Football is here!!!

Mexican Salmonella Pt. 2

Check the blog. I called this a while back. However, we still aren't going to see much news on it. The recent salmonella outbreak has been isolated to a single strain from jalapenos peppers that have been imported from Mexico. This is just another side-effect of NAFTA and the recent agreement that allows Mexican truckers more distribution access in the states.

It's actually pretty simple, if you think about it. Mexican produce is washed and cleaned by Mexican water. Although Mexicans have developed a tolerance for the water, most Americans will get sick if they drank it. These products that have been cleaned with tainted water eventually make it to grocery stores in the United States.

This administration has an obsession with non-American products and labor. Even though it's very clear that these products are making us sick, they'll never really give it enough attention or thoroughness to cause any disruption in the flow of Mexican products. Surely, they'll never do anything to jeopardize the relationship.

We all need to make sure we have ample supply of Pepto-Bismol on hand.