Financial coup d’etat in U.S. – Part 2 – Pay, pay and pay again
By Peter Ewart
Tuesday, September 23, 2008 03:45 AM
By Peter Ewart
Sometimes in history, events can go by so slowly it seems as if we are on a train chug-chugging up a long and steep hill. But inevitably the train, puffing smoke and steam, labours its way to the crest, and then … the wild ride down begins.
We are on such a wild ride now, both politically and economically, and, as the old saying goes, “everyone better hold onto their hats” - events are developing very fast.
Since I wrote the first part of this series of articles two days ago, The American people, and people around the world have had time to learn about the brazen coup d’etat that the Bush government is trying to pull off. This coup will grant sweeping, dictatorial powers to the Secretary of the Treasury and his Wall Street backers, and will foist $700 billion dollars of bad debt, like heavy sacks of coal, onto every man, woman and child living in the United States.
All of this, of course, is in addition to the hundreds of billions of dollars that the U.S. government has spent on bailing out or propping up other financial institutions, like Freddie Mac, Fannie Mae, and AIG Insurance, as well as the taking on of potentially trillions of dollars of debt from these same institutions.
Over the weekend, the American people were told by both the Republican and Democratic leadership, as well as various big media and Wall Street pundits that there is no alternative to this massive bailout, that the financial system will collapse unless the big financial institutions are paid off, that workers will lose their jobs, pensioners their savings, and so on. In short, like the story of Chicken Little, the sky itself will “fall in” unless the moneybags are rescued.
Is there any truth to the allegation that the financial system will collapse if the big financial institutions are not bailed out with taxpayer’s money? Such scare tactics have been typical of the Bush regime, which, as the entire world now knows, used a similar method to justify the invasion of Iraq.
The fact of the matter is that the U.S. financial system is already in a state of collapse and, many analysts believe a severe recession is almost certain to happen. The attempted “coup” by the Wall Street bankers and the Bush government is not so much aimed at staving off the inevitable downturn that is coming, but rather to make a grab for taxpayer cash while they still can.
To put it another way, in the coming economic storm, the Wall Street financiers want to be sheltered, all dry and comfortable, in their taxpayer-funded limousines, while everyone else is on foot trudging through the rain, getting soaked to the bone. One thing for sure – When the moneybags get those limousines, don’t count on them picking up any hitchhikers.
If this financial “coup d’etat” by the Bush government goes through, it will actually make the looming recession much worse. Why? Because such huge government debt (which ultimately Americans will have to pay for in one way or another) will severely damage the purchasing power of the American people as a whole, which is already under tremendous stress from high gas prices, falling house prices, the slumping dollar, usurious credit card debt, and so on.
In other words, a “crisis of overproduction” will be hastened, and it will be longer and deeper as a result of the bailout. A crisis of overproduction is triggered not because too many goods and services are produced. Rather it is because the purchasing power of ordinary people is weakened to the point that they simply can’t afford to buy the goods and services. As a result, sales plummet and there is massive deflation of prices. Factories close. Unemployment skyrockets. And the results are not pretty. The most famous crisis of overproduction? The Great Depression of the 1930s.
Thus, it is in the interests of the American people to not allow the government to rob the treasury and bailout the moneybags (who, through their greed and recklessness, caused the credit and mortgage crisis in the first place). A much better solution is to demand that the big banks and financial institutions be made to dig into their own extensive assets and holdings to clean up the mess.
In any case, the reaction of the people across America has been swift and splendid. Newsrooms report that people are overwhelmingly against this bailout. Online discussion boards are raging with opposition. A polling agency found that only 28% of those American’s polled supported the government’s proposal.
Now, as a result, some media pundits are beginning to get cold feet, suggesting that the “cure might be worse than the disease.” Even some Democratic and Republican leaders, perhaps worrying about their electoral skins, are backtracking. What appeared to have been a “coup” several days ago on the part of big government and the big banks, could well turn into a humiliating “rout.”
That being said, the Wall Street bankers are determined to dump their problem onto someone somewhere, and Americans will have to be vigilant about any “new” or “modified” bailout schemes that come via either the Democratic or Republican Party leadership.
In this time of crisis, the people of the world are with the American people and wish them all the best in this important struggle. Americans do not deserve to have to pay for the greed, abuses and crimes of the Wall Street financiers, who are no friends to them or, for that matter, anyone else in this wide world.
Peter Ewart is a writer and college instructor in Prince George, BC. He can be reached at peter.ewart@shaw.ca
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Posted by: johncameron on September 23 2008 2:23 PM
Sounds good, but just what, primarily, are "the big banks and financial institutions" own "extensive assets and holdings"?
In terms of the figures involved, beyond the relatively miniscule value of their own real estate, and bank buildings, and all the other 'hard' assets comprising the various accoutrements of banking ~ computers, desks and chairs, etc. ~ their major Assets are their 'loans', are they not? So how are they going to "dig into" those?