Cash strapped communities all over the country are now feeling the pinch of the egregious Wall Street CEO behavior. Mostly, it's in the costs for their municipal bonds which have rising interest rates now cause by what is affectionately called the "credit crunch."

Credit Crunch my ass.

This is about a blatant disregard for sound financial decisions, accounting and serious lack of transparency. And now, for their sheer stupidity, these CEO's and their friends and family members in the White House want the People's Congress (yeah, that's right, you work for the PEOPLE!) to write a F*&KING BLANK CHECK to bail them out. Cause all the union members screwed by "market forces" in Michigan and the behavior of CEO's like Dick E Dauch of American Axle are getting bailouts like this, too. Oh wait, they aren't, that would be welfare. But for Wall Street, we call it a bailout. Hell no, no Wall Street Welfare.

And I'm not the only one thinking this way, take Dean Baker for instance:

According to George Bush, our financial structure is in such desperate shape that if Congress doesn't hand a $700bn blank cheque to Henry Paulson, the US Treasury secretary, immediately, the whole structure will collapse. While no one should doubt the damage that Bush's policies have done to the economy, the fact is that Congress has some time to structure a bailout that is not just another give-away to the richest people in the country.

The policies of President Bush and the recklessness of the Wall Street crew did bring the financial system to the edge of an abyss. There was a near meltdown last week as Lehman Brothers, the huge investment bank, collapsed, and AIG, the nation's largest insurer, followed suit. Banks stopped lending to each other, creating a situation in which our system of payments (eg cheques and electronic transfers) stopped functioning.

snip

Everyone should understand that we are in this mess for two reasons. First the financial regulators, both in the Bush administration and more importantly at the Fed, were completely asleep for most of the decade. As the housing bubble grew to ever more dangerous proportions, and lenders adopted increasingly questionable lending practices, the regulators did nothing.

The other reason we are in this mess is that the Wall Street banks got themselves hugely leveraged in real estate and other assets. In many cases they had no appreciation of the value of the underlying assets. They also apparently did not understand the complex financial derivatives that they had themselves created.

Now this situation has exploded in their faces, sinking several of the country's largest financial firms and bringing dozens of others near the cliff. As a result of this recklessness, the economy is now facing a recession with the unemployment rate rising rapidly. Millions of families are losing their homes.

So what is Bush proposing? He is telling Congress that everything can be put back in order if they just give $700bn to Paulson, with no strings attached.

No strings attached? WTF?

So, then Obama comes out and says what I've also been thinking (care of the Politico):

In Clearwater, FL, Obama began by talking about capping pay for executives whose companies participate in the bailout, and the prospect that that would be a deal-breaker for some CEOs.

"I cannot imagine a position that's more selfish and more greedy," Obama said, addressing executives directly.

"Do not make that mistake. You are stewards not only of your companies but also of workers and communities across this country who have put their trust in you," he said.

"This plan cannot be a welfare program for Wall Street executives," he said.

And then Ben goes on to summarize Obama:

And he raised the notion of a post-crisis "financial stability fee," a new tax on Wall Street, after it recovers, to pay back taxpayer losses.

Damn straight. You want the Wall Street Welfare, then you make serious concessions. There should be no blank check to these robber barons, especially for what they've now put our communities through in terms of municipal bonds and our freaking retirement funds!! Oh, and hell, while you're at it, let Congress know how you feel by heading over to the SEIU and signing the petition.

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I read his American Prospect column and blog and find it really easy to read and understand. He just knows how to connect the dots, especially with this latest piece:

September 21, 2008
Senator Shelby Doesn't Understand the Bailout

That would have been an appropriate headline for a Washington Post article on the bank bailout. The article reported Senator Shelby's objections to including any provisions in the bailout that would restrict executive compensation. According to the article, Shelby said that he thinks that compensation should be set by corporate boards.

Of course nothing proposed in the bailout would prevent corporate boards from setting whatever compensation levels they want. However, if the corporation wants to take advantage of the government's largess than it would be required to meet rules on executive compensation.

This sort of restriction on those getting special privileges from the government is common. For example, churches that enjoy tax exempt status are restricted in their ability to lobby Congress and take part in other political activities. No one questions the right of any individual or group of individuals to lobby Congress. However, those that directly benefit from special tax treatment, do face restrictions. Similarly, corporations can pay their CEOs whatever they want. However, if they want a share of the government's bailout, they may face restrictions if the Democrats get their way.

--Dean Baker

So, I just had to go to the Post article and found that Shelby really does have his head up his ass:

Many lawmakers also want additional protections for taxpayers. House Republicans, for example, have asked that any profits generated by the sale of the bad assets be used to reduce the budget deficit and not for any other purpose.

Where the parties appear to diverge is over Democrats' demand for government authority over the paychecks of executives whose companies participate in a taxpayer bailout. House Republicans oppose the idea, aides said, and Sen. Richard C. Shelby (R-Ala.), a key figure in the debate, said yesterday on CBS's "Face the Nation" that he thinks compensation should be set by corporate boards.

Speaking on the same program, Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said voters would protest a program that appears to permit corporate executives to pocket taxpayer dollars.

"It would be a grave mistake to say that we're going to buy up the bad debt that results from the bad decisions of these people, and then allow them to get millions of dollars on the way out the door," Frank said. "The American people don't want that to happen, and it shouldn't happen."

The idea does have a recent precedent: When regulators took over mortgage financiers Fannie Mae and Freddie Mac this month, they not only removed the firms' top executives but also eliminated $12.59 million in "golden parachutes" that had been promised in severance pay and bonuses. The executives, Daniel H. Mudd of Fannie Mae and Richard F. Syron of Freddie Mac, will now get a combined $9.43 million upon their exit.

Speaking on "Fox News Sunday," Paulson acknowledged "excesses" in executive compensation but said the debate should be put off for another time.

"If we design it so it's punitive and so institutions aren't going to participate, this won't work the way we need it to work," Paulson said.

Paulson expressed more openness to the idea of foreclosure relief for homeowners whose loans are being financed by the securities the government would buy. "I think there should be a mortgage relief component to this," he said, without elaborating.

For nearly a year, Paulson has touted an initiative that calls on banks to voluntarily modify mortgages held by struggling homeowners so they can stay in their homes. Paulson said in a recent interview that this effort, called Hope Now, has helped 1.7 million households. But Democrats are skeptical, noting that the data are vague about the extent of assistance provided.

Paulson again warned lawmakers to resist adding too many provisions to the bill.

"We want this to be clean, and we want this to be quick, and it's urgent that we get this done," he said.

But so does Secretary Paulson. Which is probably about the time I also noticed that Mr. Baker also took Paulson to task for, well, being Paulson:

« Conditions for a Bailout | Main | Senator Shelby Doesn't Understand the Bailout »
Paulson Missed the Bubble and Understated the Financial Crisis at Every Point

Treasury Secretary Henry Paulson is telling Congress that if it doesn't give him a $700 billion blank check the financial system is going to collapse. It would be reasonable for reporters discussing this request to present some background on the track record of the person asking for this enormous blank check.

In March of 2007, after the first shock waves of the housing meltdown had already hit, the Associated Press reported Mr. Paulson's view that the credit difficulties linked to the housing slump would be limited.

In August of last year, after the second round of financial shock waves disrupted markets worldwide, Paulson commented, "We have the strongest global economy I’ve seen in my business lifetime."

Just last March he warmly endorsed a reduction in the capital requirements for Fannie Mae and Freddie Mac, saying "additional capital [invested in mortgages by Fannie and Freddie] will enable the companies to help more homeowners and will strengthen the underlying fundamentals of the mortgage market."

At every point along the way, Secretary Paulson has failed to see the extent of the crisis resulting from the collapse of the housing bubble. This raises serious questions about his judgment. Reporters should be discussing Paulson't track record in the context of this bailout proposal.

--Dean Baker

But the really good stuff is the graphic in the sidebar of the New York Times piece on Paulson and Bernake. It pin points this Secretary's complete disregard for anything that isn't McCain-esq economy is strong crap. You've really got to check it out.

Hey, Mr. Baker, thank you for saying what's been bumbling about in my head for the last few days. It's like you were reading my mind, only with a translator attached!!

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