Let Wall Street crack

There's one thing I really wonder about in american politics:

That's how come the rightwing come to the conclusion spending 700 billion dollars to keep the capitalist philosophy from falling apart are named "SOCIALISM"???

Why is it rightwingers who are against it and "leftwingers" who are for it.
United States of America is indeed an upside-down land, I guess!

IMO it's true leftwing to reject the bill at 700 billion, keeping huge financial speculants, bankers, and other non-productive capitalists alive.

The socialist movement must realize that the financial market must crack before we can establish a world made for people instead of a world made to feet Frankensteins Monster of Capitalism.

And as poverty & unemployment will spread, the poor and unemployed should point out who stole their welfare. Point the capitalist out & take back what belong to us.

To give away 700 billion dollars to some of the richest assholes in America HAS ABSOLUTELY NOTHING TO DO WITH SOCIALISM - it's capitalist corporative when it's worst, and it's a scorn to common americans who'd had better need for just a bit of these money to improve their welfare insurance...

Let Wall Street crack
& emancipate the people

 

this "bailout" of corporations is not "socialist" in any god damn way! it is fascism! read the thread i just started here at hip fourms in the fascism section.

your quite right about wall street. it is the Corporate monster, that if it reaches it's logical ends, will most likely destory ALL life here on planet Earth. we the people, have the power to destory the monster!

 

i say if it doesn't work, let it burn. let something else rise from the ashes. Don't make the rest of us suffer and pay for it.

 

Now I don't want to rain on your parade or anything, but there's something called a small investor. 63 year old Aunt Kate (or 61 year old Uncle David) who has his/her life savings invested in mutual funds. Aunt Kate saved for years, but the bank doesn't pay interest on saving accounts any more, so she invested in a mutual fund. The mutual fund loaned to banks, and the banks loaned to mortgage holders, and now lots of mortgage holders can't pay the bank back, and the bank can't pay the mutual fund investor back dollar for dollar when redemption is asked.

Market value falls below book value on Kate's shares. The dollar she invested is now worth seventy cents.

This isn't Bill Gates or Oprah Winfrey or Mick Jagger or some hockey player losing money. This is Aunt Kate, or Uncle David who worked and saved for years and now are seeing their savings erased.

"If you're cold, don't expect sympathy from someone who's warm." -- Solzhenitsyn

 

Aunt Kate should have used a savings account like everyone else?
The law requires banks to store enough money for everyone to withdraw their funds, and the money is comparatively safe.

The sad truth is that investment is a risk you know that when you make the investment.
You can't use small investors as a human-shield, it isn't the public's responsibility to bail-out people who make bad investments.
If you want to help Aunt Kate, you would be better off using the tax-money to fund decent pensions.

Why should hard working Cousin Joe have to lose over half his paycheck in tax to bail out other people that can't look after their money?

 

As I understand it, the so called bailout is an investment, not an expenditure. The government is assuming a risk and taking over mortgages from banks, so that banks will continue to be able to lend to businesses and individuals. If banks don't have money to lend, businesses like the one that provides Cousin Joe's paycheque will go belly up.

Using tax money to fund decent pensions would be an expenditure, just like maintaining the world's most expensive standing army is an expenditure.

If you're being overtaxed, I suggest getting your next President to de-commission a whole lot of frigates, nuclear subs, bombers and ICBM bases, and retire a million grunts and sailors. While you're at it, you can talk Congress into shortening prison terms and closing prisons (starting with Guantanamo) that were obsolete the day they were built, thus saving more billions yet.

In the meantime, Cousin Joe won't have to 'bail-out' me, because I sold my mutual funds when market value dropped to book value. That makes me and millions of other dis-investors around the world part of the problem, but I've got to look after myself first when the game isn't funny any more.

 

So Cousin Joe should just have to bail-out the people that weren't smart enough to withdraw their funds, or put them somewhere secure?

If the government is removing the risk from investment by offering bail-outs, people will always make stupid investments.
We shouldn't be funding a safety net for these people, they need to feel the bite of their mistakes.

We're rewarding the people who got us into the mess, and doing it with the money of the people who are suffering from their mistakes.

Essentially rewarding the perpetrators and punishing the victims.

A lot of money has been lost at the top of the tower, and they're trying to compensate by taking wealth from the bottom of the tower.

It's like Jenga, it might work for a while, but sooner or later it will crumble.

If the banks want the peoples hard earned money, they should come to us directly like we would have to come to them when we need a loan.
Simply "taking" the cash they need through tax is gross injustice

 

How does a bank "come to [you] directly"?
Banks get money in several ways:
1) - by payments from debtors, with interest.
2) - by sale of foreclosed property
3) - by obtaining a deposit from someone who wants a secure place to keep money
4) - by loans from other banks
5) - by institutional investment
6) - by sale of assets.
As I understand, the subprime mortgage problem is lessening source (1).
Source (2) is available, but sale of a foreclosure is always at a loss.
Source (3) should be improving as sources (4) and (5) fail.
Source (6) will be more available if the governments (world-wide) buy mortgages from the banks.

As for victims, the major victims so far are investors who are forced by personal circumstances to redeem funds at less than book value. Taxpayers will only be victims to the extent that the government in its new role as mortgage lender loses on sale of foreclosures. This type of loss will only be a small fraction of the government investment.

 

Thing is the market isn't a secure place. But some poliiticians try to sell us on the idea that we'd be better off privatizing social security through it.

And some still are spouting trinkle down economic theories. I wonder about those trying to protect capital gains profits. My question is who right now is making any profit? I really feel those speculators profitting from this grave situation should be paying their fair share.

History has shown us capital gains are not a magic bullet:

http://www.huffingtonpost.com/jeff-madrick/the-abc-debate-enough-cap_b_97730.html

 

Well for starters, they already have a good deal of my money, stored in my current account.
But if they need a loan then they should be made to jump through the same hoops we do. If there is no easy way for that to happen, they should go without.

Hundreds of people are turned away for loans, and yet will be forced to give the bank some of their money through tax, without choice.
Not because of any mistake we have made, but because of mistakes that banks and investors have made.

Investors are not victims, because you invest at a risk, your own risk. It is their own fault and problem and we have no responsibility to protect them.

Forcing people that never made the financial mistakes to foot the bill is a warped conception of justice.

These people have no right to our money, and would just as quickly decline us the same support if we needed money from them.
They landed themselves in this, if we bail them out, then they will make the same mistakes again and again and again, because they are at liberty to make risky investments without the risk.

Robbing the poor and giving to the rich is not good national policy

 

the only safe way to keep your money is in a lock box under your bed protected with a shotgun ):

 

That's not even true anymore, not if the dollars starts to slide..

 

Thanks to all for good debate & for awesome comments...
That can all be said so simple as in this letter to the editor of my paper by Pelle Dragsted*:

"Den Usynlige Hånd
Efter den seneste tids skatteyderbetalte redningsplaner for bankerne, må det konkluderes, at markedets famøse usynlige hånd, åbenbart kun virker når den har fingrene langt nede i statskassen."


Translated to English:


The Invisible Hand
Since the latest taxpayer-payed rescue plans for the banks, that must be concluded that the famous Invisible Hand of the Market obviously is only working when it's digging its fingers deeply into the Treasury.

Love,
-wolf-

*(newspaper) Information, Weekend 25.26.oct., p.19

 

The problem with that claim is that its just a populist fiction. Taxes are paid by the rich, and this bailout - which is not a gift, it is a loan - and which will not (and has not) resulted in investors recovering their losses - benefits everyone (assuming it works). You cannot have a healthy economy and a failed banking system.
Taxes paid by highest incomes

• The top 1% pay 22.7% of taxes.
• The top 10% pay 50% of taxes.
• The top 20% pay 65.3% of taxes.
• The top 40% pay 84.3% of taxes.

Taxes paid by lowest incomes

• The bottom 20% pay 1.1% of taxes.
• The bottom 40% pay 6.1% of taxes.

 

The problem here is by reducing input to percentages, you veil how heavy a tax burden actually is on a person.
My income is low, I can assure you that the the amount which comes out of my taxes (an amount which is now guaranteed to rise exponentially to cover this bail-out) is going to hit me a lot harder than it will hit the top 50% of tax-payers.

Some rich guy will have to go without an extra bottle of wine at the weekend or a holiday. If I can't earn enough, I risk going without somewhere to live.

We say it is a loan, but will I personally receive back the money given? No, of course not, it will go into government coffers and pay to employ more rich people.

We will never have a healthy banking system if we let investors off the hook. An economy is a natural system, and this crisis is that system shedding off those incapable of working in it.
These cycles keep repeating, because every time the economy stabilises again people think "great we can start making risky investments and building up debt again".

The only way we will end that is if we give investors something to remember. something other than "it's ok, if the worst comes to the worst the government will intervene, we have carte blanche!"

What the government needs to do if anything is starting implementing radical measures to take the burdens off small businesses (something better than a mildly deferred VAT payment) which are the backbone of a strong economy.

I would sooner see the tax mnoney going into loans for them, to cover what they lose from the banks, than covering the banks.
The banks already have my frigging money, free of charge of from me, I keep it in their accounts.

 

Also, this is the Anarchy forum, it is worth bearing in mind that we don't accept the premise that tax-money is legitimate.

An equivalent for a non-anarchist would be the boss of a crime syndicate bailing out the banks, and announcing that he will have to increase robberies as a result.

 

All investments have risk to them, the condo in Florida, the antique car, the rental home all of it.

Why should stocks be special? If they protect people who lose value in stocks what about people who lose value in homes, cars, time-shares, vacation to Vegas, stamp collections?

Why did these people play the casino stock market instead of a treasury bond, CD, or a safe box full of cash of gold? Because they wanted to win more money,
Why do you win money? Because you take a risk.

 

No, the problem is that you just changed the argument.

Why are your taxes "guaranteed" to rise "exponentially"? Where do you get that from?

No, you won't personally get it back because you didn't personally loan it. How else could it work?

I think the investors that lost 100% of their investment in Lehman will remember.The ones that lose 85% in Bear Stearns and similar percentages in Freddie Mac, Fannie Mae, etc. This is the big myth: because of this $700bn program, investors have/will get their money back. B they won't. They haven't. Stocks have gone down hard since the programme was announced.

Again, I think people have a certain populist interpretation that they want to believe but unfortunately it isn't true.

I don't get this, you are against government intervention but you want government favoritism towards certain businesses?

You want a government bank to loan to small businesses?

And what's the connection between you making a deposit and a bank losing money? Do you wish you had lost all your deposits as the entire banking system collapsed so that people would learn not to deposit their money with banks? Are you against deposit insurance?

 

Again - you keep trying to imply that the government has stopped the stock market from going down. It hasn't. It isn't even trying to. The banking system isn't something that exists in abstract, it isn't wall streeters speculating. Its the financial system that every business large or small uses to make payments, to hold cash, to borrow money for investment and working capital. This is the function the government wants to keep working. They don't care if Citibank does it with a share price of $1 or $100, so long as the banks are still there to keep the economy functioning.

 

How have I changed the argument exactly? The poor carry a heavy tax burdern regardless of their overall contribution as rendered in a percentage.
You can't magic away the personal cost to a tax payer that way

I get it from the UK government, who have bailed out the banks, and said that taxes will need to be heavily raised as a result.
Or do you not consider the people funding the bail out an authority on what it will cost them?
The overall UK cost of the bailout is estimated at 500 billion pounds, and our entire yearly tax revenue is barely 580 billion, so yes, I think I can quite reasonably expect a high tax rise as a result

So that money that comes out of my paycheque each month isn't mine? wasn't earnt by me?
What a novel theory.

that's like saying it's ok for a mugger to spend your money, because you didn't personally loan it.

The money is taken from me as much as it is anyone else, and it is me that will feel the loss when I'm trying to pay my heating bills in the winter, not the government.

And yet banks in England are still offering big yearly bonuses to their employees, while my job isn't even guaranteed past christmas, as a direct result of their actions.
Where is the government money protecting me if I lose my job?
the £40 a week jobseeker allowance won't even pay my rent, let alone my food or utility bills.
Whilst government corporate-welfare is protecting the jobs of the people that did this to me.

I didn't take risks, I didn't make bad investments, I didn't put in money I don't have.
I just work hard every day.

If you read my post I actually said "I would sooner see"
The government has said they are giving money to the banks, because otherwise the banks will stop loaning to businesses... well why don't we just loan directly to those businesses?

The reason is that the small businessman doesn't have the government in his pocket, and the banks do.

This bail out is the rich protecting the rich, and nothing less.

I'm saying if MY money is being used to protect my own deposits, I would be just as well off simply being exempted from tax payments, and being allowed to stash what I save under the bed. I would make back my paltry deposits in a matter of weeks.

Using the peoples own money to protect their own deposits is circular logic.