Of the sons of Issachar, men who understood the times, with knowledge of what Israel should do, their chiefs were two hundred; and all their kinsmen were at their command — 1 Chronicles 12:32
After working six years as a senior executive for a multinational payroll-processing company in Barcelona, Spain, Mr. Vildosola is cutting his professional and financial ties with his troubled homeland. He has moved his family to a village near Cambridge, England, where he will take the reins at a small software company, and he has transferred his savings from Spanish banks to British banks.
“The macro situation in Spain is getting worse and worse,” Mr. Vildosola, 38, said last week just hours before boarding a plane to London with his wife and two small children. “There is just too much risk. Spain is going to be next after Greece, and I just don’t want to end up holding devalued pesetas.”
Mr. Vildosola is among many who worry that Spain’s economic tailspin could eventually force the country’s withdrawal from the euro and a return to its former currency, the peseta. That dire outcome is still considered a long shot, even if Spain might eventually require a Greek-style bailout. But there is no doubt that many of those in a position to do so are taking their money — and in some cases themselves — out of Spain.
In July, Spaniards withdrew a record 75 billion euros, or $94 billion, from their banks — an amount equal to 7 percent of the country’s overall economic output — as doubts grew about the durability of Spain’s financial system.
The withdrawals accelerated a trend that began in the middle of last year, and came despite a European commitment to pump up to 100 billion euros into the Spanish banking system. Analysts will be watching to see whether the August data, when available, shows an even faster rate of capital flight.
More disturbing for Spain is that the flight is starting to include members of its educated and entrepreneurial elite who are fed up with the lack of job opportunities in a country where the unemployment rate touches 25 percent.
According to official statistics, 30,000 Spaniards registered to work in Britain in the last year, and analysts say that this figure would be many multiples higher if workers without documents were counted. That is a 25 percent increase from a year earlier.
“No doubt there is a little bit of panic,” said José García Montalvo, an economist at Pompeu Fabra University in Barcelona. “The wealthy people have already taken their money out. Now it’s the professionals and midrange people who are moving their money to Germany and London. The mood is very, very bad.”
It is possible that the outlook could improve if the European Central Bank’s governing council, which meets Thursday, signals a plan to help shore up the finances of Spain and other euro zone laggards by intervening in the bond markets.
But right now, if anything, Spain’s picture is growing dimmer.
On Friday, the government’s bank rescue fund said it would need to pump up to 5 billion euros into the failed mortgage-lending giant Bankia, which the state seized in May. And on Monday, Andalusia became the latest of Spain’s semiautonomous regions to ask the central government for rescue money.
The wider prospects for the euro zone are also still bleak. Moody’s [MCO 39.72 0.12 (+0.3%) ]Investors Service said on Monday that it had changed its outlook on the AAA rating of the European Union to negative, and that it might downgrade the rating if it decides to cut the ratings on the union’s four largest budget contributors.
Spain’s gathering gloom comes despite a gradual return of capital to banks in Greece and the relative stability of deposits in those other euro zone trouble spots, Italy, Ireland and Portugal.
The continued exodus of money and peoplefrom Spain could be a warning to European policy makers that bailing out the country — a step now widely expected — may not stem the panic as long as the Spanish economy remains in a funk.
It was a lesson learned in Greece, where despite successive European bailouts, about a third of deposits have been withdrawn from its banks since 2009, as the public worried that Athens might have to return to the drachma.
Spain is still a far cry from a nearly bankrupt Greece: it has a much larger and more diverse economy, lower levels of debt and a bond market that is still functioning.
It might be more accurate to say that money is leaving Spanish banks at more of a jog than anything close to a sprint.
Although retail and corporate deposits are down 10 percent compared with those of July 2011, the country remains relatively rich in savings, with 2.3 trillion euros in overall deposits, according to data from Morgan Stanley.
But once under way, the flight of bank deposits can easily overwhelm rational facts and analysis.
Setting off the flight was the failure of Bankia, which came as a shock to Spanish savers who had been assured by government officials that the bank was in good shape.
Instead of calming fears, the state takeover prompted comparisons to Argentina in 2001, when peso bank accounts denominated in dollars were frozen in order to stem the flight of deposits.
The corralito, or corral, as the Argentine action is known, has become part of the public conversation in Spain. The million-plus Argentines who have since immigrated to Spain have provided ample and gory stories of desperate legal battles and wiped-out savings.
Eduardo Pérez, a Spaniard who was working in Argentina during that period, remembers the events all too well. He said he lost four-fifths of the money he had kept in an Argentine savings account, though he declined to say how much money was involved.
“Some of my friends lost everything,” Mr. Pérez said. “So yes, everyone in Spain knows about the corralito.”
Recently, Mr. Pérez, who lives in the northern city of Bilbao, removed about a third of his euros from his Spanish savings account and sent them to Singapore, converting them to Singapore dollars.
Having lost his job at a multinational company a few months ago, Mr. Pérez, 48, is trying to make ends meet by focusing on his travel Web site and blog, which aggregate Spanish-language travel videos.
But as the job outlook worsens, he is contemplating following in the path of his savings and starting a new life in Singapore with his wife.
“Two years ago, we never would have thought of this, but now I have real fears that there will be a breakup with the euro,” he said. “And when you keep hearing people saying, ‘Don’t worry, it’s not going to happen’ — well, that is when you have to start worrying.”
Analysts said that the record-high outflow from Spain in July was probably spurred in part by July’s being a taxpaying month for many corporations, which prompted them to withdraw cash from deposit accounts.
Also playing a role were investment funds that moved cash reserves to foreign banks in light of the credit downgrades at Spanish banks.
Still, as the examples of Mr. Vildosola and Mr. Pérez show, individual deposit flight is becoming more pronounced.
Some people are willing to fly to London for the day just to open an account there, as most banks in the city require such transactions to be made in person.
Spanish bankers working for British financial institutions say they have been hit with a barrage of questions about how to open savings accounts in London.
“It seems as if everyone I know in Spain is getting on an easyJet to come to London and open a bank account,” said one such banker, who spoke on condition of anonymity, citing his company’s policy.
That is what Mr. Vildosola did before he took the more drastic step of moving his family to England.
“It’s sad,” he said. “But I just don’t think there is a future for me in Spain right now.”
This story originally appeared in The New York Times
The flight of capital from Spain is now worse than what Indonesia, one of the hardest hit countries during the Asian financial crisis, experienced in the late 1990s, according to analysis by Nomura.
On a three-month rolling basis, portfolio and investment outflows from Spain totaled 52.3 percent of the country’s gross domestic product (GDP),(that’s) more than double the outflows from Indonesia, which reached 23 percent of GDP at the time of the Asian crisis, Jens Nordvig, global head of G10 FX strategy at Nomura wrote in a note to clients on Tuesday.
Spaniards and foreign investors have been pulling money out of Spanish banks as the economy has worsened in recent months, and Nordvig said without the single currency and the flows from the ECB, Spain would already be going through a major currency crisis. (Read More: Depression, Suicides Rise as Euro Debt Crisis Intensifies)
We would stress that the broad-based nature of the capital flight, which involves both banking claims and securities and flows from both residents and non-residents, makes for a rather extreme overall outflow, and one that raises serious concerns about the implications for banking sector stability and economic growth,” Nordvig wrote.
Indigestion for ‘les Riches’ in a Plan for Higher Taxes
By LIZ ALDERMAN
Published: August 7, 2012 763 Comments
PARIS — The call to Vincent Grandil’s Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France’s most profitable companies, and he was feeling nervous.
President François Hollande is vowing to impose a 75 percent tax on the portion of anyone’s income above a million euros ($1.24 million) a year. “Should I be preparing to leave the country?” the executive asked Mr. Grandil.
The lawyer’s counsel: Wait and see. For now, at least.
“We’re getting a lot of calls from high earners who are asking whether they should get out of France,” said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. “Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing.”
A chill is wafting over France’s business class as Mr. Hollande, the country’s first Socialist president since François Mitterrand in the 1980s, presses a manifesto of patriotism to “pay extra tax to get the country back on its feet again.” The 75 percent tax proposal, which Parliament plans to take up in September, is ostensibly aimed at bolstering French finances as Europe’s long-running debt crisis intensifies.
Europe is imploding. Spain is one of the PIIGS (the ‘S’ in PIIGS, in fact) who are leading that collapse. And Obama is pushing for an economic and environmentalist model that most copies collapsing Spain.
The last couple of years, as Europe has slowly imploded, the dollar has been given a boost as terrorized Europeans seek some haven from their weakening Euro. But if Europe goes – and it WILL go – America will fall right afterward because Europe is our largest trading partner and there won’t be anybody to buy our stuff from us. And because Obama has spent the last four years racing us toward that same direction and that same catastrophic collapse. And when America goes the dollar will flush down the toilet right down with it. And you better take a look at the terror on the faces of Spaniards; because YOU will have that same look on YOUR face soon thanks to your vote for Obama and Democrats in 2008.
In 1980, the last year of Jimmy Carter’s failed presidency, 300,000 businesses filed for bankruptcy. In this last failed year of Obama’s failed presidency, 1.4 million – very nearly FIVE TIMES as many – businesses have filed for bankruptcy. If we vote for Obama, we vote to die as a nation just as Spain previously voted to die and just as Europe previously voted to die.
The Obama campaign apparently didn’t look backwards into history when selecting its new campaign slogan, “Forward” — a word with a long and rich association with European Marxism.
Many Communist and radical publications and entities throughout the 19th and 20th centuries had the name “Forward!” or its foreign cognates. Wikipedia has an entire section called “Forward (generic name of socialist publications).”
“The name Forward carries a special meaning in socialist political terminology. It has been frequently used as a name for socialist, communist and other left-wing newspapers and publications,” the online encyclopedia explains.
The slogan “Forward!” reflected the conviction of European Marxists and radicals that their movements reflected the march of history, which would move forward past capitalism and into socialism and communism.
The Obama campaign released its new campaign slogan Monday in a 7-minute video. The title card has simply the word “Forward” with the “O” having the familiar Obama logo from 2008. It will be played at rallies this weekend that mark the Obama re-election campaign’s official beginning.
You just watch what will happen to the DOW the day Spain goes the way of the Dodo bird. And you realize that we’re going down hard in our own day of reckoning because we chose the same stupid and immoral course that Spain chose.
The collapse is coming. Democrats gave us that when they voted for Obama and let him kill America with his socialism. The Antichrist is coming. He’ll be riding in on his white horse to save the day from the disaster and collapse caused by the previous false messiah Obama. And Democrats will welcome the beast even more enthusiastically than they welcomed Obama and they will worship him and they will take his mark.
Get ready for hell on earth. And then get ready for hell itself. Because the beast is coming.
Just imagine for a second if George Bush had this giant of an albatross hanging off his neck. Good thing it’s Obama’s complete policy and worldview failure so the mainstream media can “spin” failure into magnificent success:
The Jurassic Press is missing much in their reporting on the $50 billion bailout of General Motors (GM). The Press is open channeling for President Barack Obama – allowing him to frame the bailout exactly as he wishes in the 2012 Presidential election.
The President is running in large part on the bailout’s $30+ billion loss, uber-failed “success.” And the Press is acting as his stenographers. An epitome of this bailout nightmare mess is the electric absurdity that is the Chevrolet Volt. The Press is at every turn covering up – rather than covering – the serial failures of President Obama’s signature vehicle.
The Press has failed to mention at least five Volt fires, myopically focusing on the one the Obama Administration hand-selected for attention.
The Press has for the most part failed to mention how pathetic this “second-best sales month” actually is. And even when one Dinosaur does, the unwarranted enthusiasm is palpable.
The Press also fails to put this pathetic tally in perspective.
The Chevy Cruze is basically a Volt without the dead-weight, flammable 400-lb. electric battery. Which makes it $17,000, rather than the Volt’s $41,000.
Chevy in June sold 18,983 Cruzes – more than ten times the number of Volts. And that’s down 1/3 from last June’s 24,648.
But that feeble Volt tally has the Press all revved up.
According to multiple GM executives there is little or no profit being made on each Volt built at a present cost of around $40,000. Furthermore, the $700 million of development that went into the car has to be recouped.
Get that? GM makes “little or no profit” on the Volt.
Look, I get it, it’s fun. I just spent $1 million – of your money – advertising free air. On which my profit margin is just as good as GM’s is on the Volt.
(A)dd $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.
Speaking of those “tax breaks for purchasers and other consumer incentives” – as of November of last year that tally all by itself was $250,000 per Volt sold.
And that excruciating pain is ongoing. Again, a Volt sold makes GM no money – but costs We the Taxpayers a $7,500 bribe – I mean “incentive.” Oh – and President Obama wants to jack that bribe to $10,000 per.
I guess it’s good news after all that Volt sales remain so anemic.
And with GM’s new 60-day return policy, it looks like you can buy a Volt and cash the $7,500 bribe check. Then return the Volt – and keep the $7,500 bribe cash. How’s that for Taxpayer coin stewardship?
Keep all of this outrageousness in mind when next the Jurassic Press joins with the Obama Administration in celebrating the Chevy Volt.
But it (allegedly) helps President Obama get reelected. And nothing would make the Press happier – and for that there’s (almost?) nothing they won’t do.
Pardon me while I go get myself $7,500 of free money by “renting” a Volt long enough to cash my Obama bribe check.
It’s the least I can do to help destroy America while helping re-elect Obama – which ironically also means destroying America.
AAP The ratio of bad loans at Spanish banks shot to an 18-year high in February, official figures showed Wednesday, as the banks struggled with a mass of deteriorating property-related loans.
Spanish banks are a key concern on financial markets because of the declining value of the huge loans they allowed to build up during a property bubble that collapsed in 2008.
Doubtful loans in February amounted to €143.8 billion ($188 billion), rising to 8.15 per cent of total credits – the highest ratio since 1994 – from 7.91 per cent in January, the Bank of Spain said.
A loan is categorised as doubtful when the borrower has not made a payment for at least three months.
Prime Minister Mariano Rajoy’s conservative government has made cleaning up the banks a priority and is requiring them to set aside more than €50 billion to boost their balance sheets.
The Bank of Spain approved the plan Tuesday, obliging banks to allocate 29 billion euros to bad loan provisions and €15.6 billion to raise the proportion of rock-solid core capital.
Those sums are in addition to €9.2 billion in provisions already set aside by the banks last year, bringing the total in extra capital to €53.8 billion.
Banks are being told to find the money for the new provisions from their own profits or by issuing new shares, although the central bank has not ruled out state intervention.
The new, tougher balance sheet requirements must be met within one year, or two years for banks undergoing mergers.
Many analysts doubt, however, that the new rules will be enough, warning that the real bad loan figures may be far worse because banks are reluctant to fully realise the declining value of their loans.
As banks stagger under the bad loans, businesses widely report that new credit is hard to come by.
Spain’s banks turned in huge numbers to the European Central Bank, which has offered more than one trillion euros in cheap three-year loans to eurozone banks.
Borrowing by Spanish banks from the ECB hit a new record in March at €227.6 billion, up from €152.4 billion euros in February and €133.2 billion in January.
Much of that money, however, has been invested in Spanish government bonds instead of loans to business.
The Bank of Spain estimated that the total value of banks’ problematic loans, the value of which is uncertain, amounted to €176 billion in June 2011, the latest date for which those figures are available.
And that’s bad news for the ten-year bond sale in Spain tomorrow:
Investors showed deep concern ahead of a Spanish government bond auction due Thursday, fearing Madrid could be thrown back into the centre of the eurozone debt crisis.
Markets have punished Spain sharply since an April 4 government bond auction drew only feeble interest, with the state barely raising the minimum amount targetted.
That weak sale, coming shortly after the government unveiled an austerity budget with spending cuts and tax increases of 27 billion euros ($35 billion), reawakened doubts over the sustainability of Spain’s financing.
A similar result Thursday, when the Treasury aims to raise 1.5-2.5 billion euros, could compound concerns that Spain might end up needing the kind of a debt bailout already afforded to fellow eurozone strugglers Greece, Ireland and neighbouring Portugal.
“Investors remain nervous ahead of tomorrow’s 10-year Spanish bond auction,” said equities analyst David Morrison at trading group GFT in London.
“If yields jump back over 6.0 percent, then the European debt crisis will return centre stage, with Spain the leading lady.”
Spain’s bad debt is actually higher than it’s good debt. And this in the fourth largest economy in Europe and the twelfth largest economy on the planet.
And then there’s the rather bad predictions – especially given the fact that a Spanish bailout will massively dwarf the pain and fear created by the Greek collapse:
BRUSSELS (Reuters) – Economic experts watching Spain don’t know how much money will be needed or precisely when, but some are near certain that Madrid will eventually seek a multi-billion euro bailout for its banks, and perhaps even for the state itself.
Prime Minister Mariano Rajoy has repeatedly said Spain doesn’t need or want an international bailout, and the European Union, which along with the IMF has already rescued Greece, Ireland and Portugal, also dismisses such talk.
But economists believe that Spanish banks will have to turn to the euro zone’s rescue fund, the European Financial Stability Facility (EFSF), for help in covering losses caused by a property market crash which has yet to end.
Likewise, investors are fretting about how Rajoy’s centre-right government can enforce deep austerity while reviving a recession-bound economy at the same time.
“They’re going to need EFSF money to recapitalize the banking sector,” said Carsten Brzeski, a senior economist at ING in Brussels. “I think we’ll only see a real end to the Spanish misery if the real estate market stabilizes.”
Madrid is likely to hold out for some time. “The underlying picture in Spain is dramatic, but is it dramatic in the way that it needs a bailout package tomorrow? No,” Brzeski said. “But if you look ahead, let’s say the next six months, I would not be surprised if they (the banks) have to get some kind of European support.”
Market concerns about the euro zone’s fourth largest economy have deepened in the past week. Yields on the government’s 10-year bonds, which reflect the risk investors attach to owning Spanish debt, have risen above 6 percent, a level that has proved a trigger point for other troubled euro zone countries.
At the moment the EU is backing Madrid. Jean-Claude Juncker, who chairs the Eurogroup of euro zone finance ministers, said Spain was taking the necessary steps to get its economy back on track, despite a recession and unemployment at 24 percent.
“I don’t think Spain will need any kind of external support,” Juncker said. “I would like to invite financial markets to behave in a rational way. Spain is on track.”
German Finance Minister Wolfgang Schaeuble also rejected comparisons with countries which are already on bailout programs. “The fundamental data in Spain is not comparable to those in the countries that are under a program,” he told Reuters. “Spain needs to work to win confidence, however, if the positive developments are to continue.”
SUSTAINABLE SPAIN?
Markets took fright earlier in the year when Rajoy relaxed his government’s targets for cutting the budget deficit.
However, not all economists are so pessimistic and some say the four-month-old government is starting to knuckle down to meeting the new targets, which still demand deeply unpopular austerity, and tackling the economy’s structural problems.
“We’ve seen more progress in a few days than in four months,” said Gilles Moec, a Deutsche Bank economist. “It’s a country that’s intrinsically sustainable, but it’s a country that needs to make decisions.”
Others beg to differ and fear Spain will drag in Italy, which has suffered similar problems with rising borrowing costs.
“As I look at my screen and Spain 10-year yields are up at 6 percent – things are starting to get worrying again,” said Peter Westaway, chief economist for Europe at Vanguard, an investment management firm overseeing $1.8 trillion in assets.
“If they go up to 6.5 to 7 percent, that could become very problematic, and if Italy started to go back above Spain again, then that would be really serious.”
Spain has one thing on its side. It has already raised nearly half the 86 billion euros it needs to borrow from financial markets this year, sucking up some of the 1 trillion euros of cheap three-year loans that the European Central Bank has pumped into the euro zone banking sector.
This means the government could hang on for months before having to turn to the EU for help with its own funding needs.
A 380 BILLION EURO PROBLEM
However, that still leaves the banks. One of the critical “unknowables’ for Spain is just how bad a situation its banks are in. The Spanish housing market, once a driver of the economy, has been in turmoil for more than four years, but prices still haven’t fallen as much as economists think is needed to squeeze the air out of the bubble.
Only when prices have bottomed will assessors be able to calculate how just much bad mortgage debt is sitting on the banks’ balance sheets, and therefore how much extra capital the sector requires to return it to health.
“Prices have dropped by about 15-20 percent from peak to now and they will probably have to drop another 15-20 percent before they reach bottom,” said Brzeski. He estimates Spanish banks may need as much as 80 billion euros of extra capital once all bad mortgage debt is accounted for.
In a paper published this week, Daniel Gros and Cinzia Alcidi of the Centre for European Policy Studies estimated that the total accumulated overhang in the Spanish property and construction sector is more than 380 billion euros – equivalent to 37 percent of GDP. (here)
“A housing overhang per se does not have to lead to an acute financial crisis if it was financed by domestic savings,” they write. “Unfortunately this is not the case in Spain.”
As a result, economists expect Spain’s banking sector will have no choice but to recapitalize.
The government is unlikely to fund such an operation while it is trying to slash the budget deficit, and private investors are reluctant to invest in such a troubled sector.
That leaves the European Financial Stability Facility as the most likely option for the banks – and possibly also for the government eventually.
“Spain is not going to run out of cash (yet) and it’s pre-funded its borrowing requirement,” said Megan Greene, a senior economist and euro zone specialist at Roubini Global Economics. But she added: “There’s a chance that the banking bailout could come sooner, but I really think it’s going to be next year.”
Even if it does hang on until 2013, Greene still expects Spain to need both a banking and a sovereign bailout – a program similar to that provided to Ireland or Greece.
“The banking sector is only one piece of the puzzle in Spain,” she said. “A banking bailout could deal with one part of the problem, but eventually the sovereign is going to need a bailout too.”
WHAT TO DO WITH ITALY
Doubts persist that the euro zone is any better placed to handle a rescue of Spain than it was two years ago, despite having already bailed out the three other countries and having set up an 800 billion euro fund to tackle the problems ravaging the region’s economy.
“When it comes to deciding how to deal with Spain, I really think they are back to the drawing board,” said Greene. “They basically haven’t learnt anything from the first three bailouts.”
Then the problem for euro zone policymakers will be what to do about Italy, the eighth largest economy in the world, with GDP 50 percent larger than Spain’s.
For months, Spanish government bond yields and those in Italy have moved in near lock-step, reflecting the twinned risk investors see in both southern European states.
“Spain and Italy are inextricably tied,” said Greene. “If Spain gets a bailout then the EU needs to be ready to provide support to Italy too.”
Did somebody say Italy? Italy is the 8th largest economy on the planet and is half again bigger than Spain – and an Italian debt failure would be economic Armageddon.
The International Monetary Fund is predicting that Italy will miss its budget deficit targets this year and next and will not balance its budget until at least 2018 – some five years later than government estimates.
In a report, the IMF said Italy would trim its budget deficit only to 1.5% of its output next year. Premier Mario Monti has promised to balance the budget by 2013, a centrepiece of his efforts to steer Italy out of its debt crisis.
The IMF however predicted that Italy would still carry a 1.1% deficit in 2017, the last year for which it made estimates.
Italy is due to publish its own revised economic figures on Wednesday.
Meanwhile, following Greece’s recent second bailout (because the first one ended in colossal failure with the Greek debt being like a black hole), things aren’t so rosy already:
London (CNN) – The bail-out is a done deal, the International Monetary Fund has agreed its share and the Europeans have started to hand over the money. One of the ratings agencies has even upgraded the new Greek bonds.
So it is incredibly dispiriting to be reading more and more notes from economists and analysts suggesting that this is not over yet.
Paul Donovan, in his note from UBS, noted that the markets were not that impressed by the state of play. The markets, he said, were pricing in “the debate about when the next restructuring will take place.”
According to Societe Generale, it is “only a matter of time before Greece will need an additional package.” Citigroup reflects the same view, noting: “In our view, Greece requires further official funding beyond at least 2014, and we also see the need of further debt restructuring in order to get the country back on a sustainable fiscal path.”
It gets worse with the prognosis “the risk of Greece exiting the euro area remains elevated (around 50%).”
Hang on. “Next restructuring?” and “further debt restructuring?” What on earth have we been going through for the past three months if this isn’t going to solve the Greece problem once and for all?
You would be forgiven for a certain incredulity, given that no sooner is the ink dry on the checks being sent to Athens than the economists who know about these things say it’s not enough.
This is made all the more likely by European politicians who continue to call for even more austerity in Greece. This lemon is just about squeezed out, and if they don’t want to be facing riot and mayhem they would do well to recognize this.
This comes as Iceland announced it is paying back 20% of its IMF loans early. Yes….I said early. Iceland. Which also introduced austerity and borrowed money but – notably – let the banks go bust.
No one ever said going bankrupt was easy, but it still may have been the best solution for Greece rather than this messy, half-baked solution we are now witnessing.
If you do an internet search for “Greek bailout,” you’ll get a sea of optimistic-toned stories saying everything will be wonderful and then suddenly nothing. And “nothing” means that things are starting to suck and liberals don’t want to talk about it.
At this point, Europe is so broken that nothing will do any good. You hear all the whining about austerity cuts and how it will impact growth; but if they don’t do the austerity cuts absolute implosion and Great Depression is a 100 percent guarantee.
And we’ll be there real soon thanks to hopey-changey Barry Obamy.
The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. Ben Bernanke(pictured to the left), Alan Greenspan, and various other bankers vehemently opposed the audit and lied to Congress about the effects an audit would have on markets. Nevertheless, the results of the first audit in the Federal Reserve’s nearly 100 year history were posted on Senator Sander’s webpage earlier this morning: http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3
What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious — the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.” – Bernie Sanders(I-VT)
When you have conservative Republican stalwarts like Jim DeMint(R-SC) and Ron Paul(R-TX) as well as self identified Democratic socialists like Bernie Sanders all fighting against the Federal Reserve, you know that it is no longer an issue of Right versus Left. When you have every single member of the Republican Party in Congress and progressive Congressmen like Dennis Kucinich sponsoring a bill to audit the Federal Reserve, you realize that the Federal Reserve is an entity onto itself, which has no oversight and no accountability.
Americans should be swelled with anger and outrage at the abysmal state of affairs when an unelected group of bankers can create money out of thin air and give it out to megabanks and supercorporations like Halloween candy. If the Federal Reserve and the bankers who control it believe that they can continue to devalue the savings of Americans and continue to destroy the US economy, they will have to face the realization that their trillion dollar printing presses will eventually plunder the world economy.
The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places
Thanks for “fundamentally transforming” our economy, Barry Hussein!
We’re constantly being told that Obama has done a great deal to make our economy stronger. Because who wouldn’t rather have 9.1% unemployment than that 7.6% that Obama started out with.
The thing that most killed the US economy in 2008 was the sheer weight of godawful subprime mortgages that Democrats imposed on Fannie Mae, Freddie Mac and all the other mortgage lenders in order to create more “fairness” and allow everyone (especially racial minorities) to have “the right” to own a home whether they could actually afford to do so or not. Fannie Mae and Freddie Mac were “Government Sponsored Enterprises,” all the investors knew. So even as Fannie and Freddie began bundling together thousands of riskier and ever riskier mortgages into giant mortgage backed securities to advance Democrat-enacted policies, large investment houses continued to gobble them up. After all, this was an arm of the United States Government – and the United States Government ALWAYS pays its debts.
Like all scams, it worked for a while. But as soon as there was a correction in the dramatically overvalued housing market, the whole boondoggle began to implode. And since Fannie and Freddie had bundled all kinds of bad mortgages in with the good ones, there was absolutely no way for anyone to know how much risk was contained in any of these giant investment vehicles all these giant private banking houses found themselves holding.
And suddenly the perception that Government Sponsored Enterprises Fannie Mae and Freddie Mac were “safe investments” turned into a “misperception.” And the fecal matter began to hit the rotary oscillator bigtime.
Fannie and Freddie were the first to collapse. The big private players who had played ball with them shortly followed.
WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
Republicans were demonized for “deregulation” by the dishonest Democrat Party machine. But they TRIED to regulate what needed to be regulated. Democrats stopped them.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
The timeline is clear: Fannie Mae and Freddie Mac were giant behemoths that began to stagger under their own corrupt weight, as even the New York Timespointed out:
Fannie Mae and Freddie Mac are so big — they own or guarantee roughly half of the nation’s $12 trillion mortgage market — that the thought that they might falter once seemed unimaginable. But now a trickle of worries about the companies, which has been slowly building for years, has suddenly become a torrent.
And it was FANNIE and FREDDIE that collapsed FIRST before ANY of the private investment banks, which collapsed as a result of having purchased the very mortgaged backed securities that the Government Sponsored Enterprises SOLD THEM. It wasn’t until Fannie and Freddie collapsed that investors began to look with horror at all the junk that these GSE boondoggles had been pimping.
The man who predicted the collapse in 1999 wrote a follow-up article titled, “Blame Fannie Mae and Congress For the Credit Mess.” It really should have read, “Blame DEMOCRATS.” Because they were crawling all over these GSEs that they had themselves created like the cockroaches they are. But Wallison is nonpartisan.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Why was Barney Frank deceitfully claiming that Fannie and Freddie weren’t facing “any kind of financial crisis”? BECAUSE REPUBLICANS WERE RIGHTLY WARNING THAT THEY WERE.
REP. BARNEY FRANK, D-MASS.: “I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.”
So we blew up nearly COMPLETELY BECAUSE OF DEMOCRAT POLICIES. But Democrats along with an ideological mainstream media that is the worse since Joseph Goebbels was the Nazi Minister of Propaganda were ready. They ran on a platform that it happened while Bush was president, and that therefore Bush was entirely responsible for the thing he tried over and over again to fix while Democrats used their power to block those efforts.
Let me just say “Franklin Raines.” Raines as Fannie CEO presided over Enron-style accounting policies and got $90 million in his account because of those corrupt policies. But Raines was the first BLACK CEO of Fannie Mae. And even though he was a Democrat and a Clinton guy, President Bush lacked the courage to push the “first black Fannie Mae CEO” out. Which of course is the same reason that the “first black Fannie Mae CEO” didn’t do hard time in prison where he belonged. “Political correctness” is a demonic device by which liberals protect themselves – usually from going to prison where they ought to go. He got a sweetheart deal basically so Republicans wouldn’t be accused of being racists by
Democrats who of course call them racists no matter what they do. My main point is simply that it was Democrats, Democrats, DEMOCRATS who did this to us.
Morgenson focuses on the managers of Fannie Mae, the government-supported mortgage giant. She writes that CEO James Johnson built Fannie Mae “into the largest and most powerful financial institution in the world.”
But in the process, Morgenson says, the company fudged accounting rules, generated big salaries and bonuses for its executives, used lobby and campaign contributions to bully regulators, and encouraged the risky financial practices that led to the crisis.
And of course DEMOCRAT Jim Johnson who got rich plundering Americans was an OBAMA Democrat.
Morgenson – again a New York Times writer and not someone from Fox News – said of Fannie Mae on Larry Kudlow’s CNBC program on Monday, June 13: “Whatever Fannie Mae did, everybody else followed.” And of course they all followed right into an economic Armageddon created by Democrats for Democrats.
But who got blamed? Republicans, of course. George Bush and Republicans were to Obama and the Democrats what Emmanual Goldstein was to Big Brother in 1984. George Bush and Republicans were what the Jews were to Adolf Hitler. Fascists always need a bogeyman. And so the people who were truly to blame turned the people who tried futilely to stop them into the scapegoats. All with the mainstream media’s complicity.
The analogy would be holding the police officer who tried but failed to catch the rapist for the rape of the woman rather than holding the actual rapist who raped her responsible. But it was easier to say “This is the result of President Bush’s failed Republican policies” than it was to actually explain the facts to an enraged Attention Deficit Disorder-ridden ignorant pop culture – particularly when virtually no one in the biased mainstream media had any intention whatsoever of telling the truth.
Barack Obama – the ACORN community organizer who pushed these very America-killing policies – ran a demagoguing campaign promising to fix everything.
When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday.
Much of the public focus is on the nation’s public debt, which is $14.3 trillion. But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.
The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.
Taken together, Gross puts the total at “nearly $100 trillion,” that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won’t find a solution overnight.
“To think that we can reduce that within the space of a year or two is not a realistic assumption,” Gross said in a live interview. “That’s much more than Greece, that’s much more than almost any other developed country. We’ve got a problem and we have to get after it quickly.”
Gross spoke following a report that US banks were likely to scale back on their use of Treasurys as collateral against derivatives and other transactions. Bank heads say that move is likely to happen in August as Congress dithers over whether to raise the nation’s debt ceiling, according to a report in the Financial Times.
The move reflects increasing concern from the financial community over whether the US is capable of a political solution to its burgeoning debt and deficit problems.
“We’ve always wondered who will buy Treasurys” after the Federal Reserve purchases the last of its $600 billion to end the second leg of its quantitative easing program later this month, Gross said. “It’s certainly not Pimco and it’s probably not the bond funds of the world.”
Pimco, based in Newport Beach, Calif., manages more than $1.2 trillion in assets and runs the largest bond fund in the world.
Gross confirmed a report Friday that Pimco has marginally increased its Treasurys allotment—from 4 percent to 5 percent—but still has little interest in US debt and its low yields that are in place despite an ugly national balance sheet.
“Why wouldn’t an investor buy Canada with a better balance sheet or Australia with a better balance sheet with interest rates at 1 or 2 or 3 percent higher?” he said. “It simply doesn’t make any sense.”
Should the debt problem in Greece explode into a full-blown crisis—an International Monetary Fund bailout has prevented a full-scale meltdown so far—Gross predicted that German debt, not that of the US, would be the safe-haven of choice for global investors.
America is going down because her stupid citizens wickedly voted for corrupt dishonest Democrat fools – the very fools who imploded our economy – to have complete power. Nancy Pelosi took over dictatorial control in the House of Representatives, and Harry Reid took over the US Senate, in 2006.
Thanks to Obama, America is now worse off than Greece. But that didn’t stop Obama from offering to bail out Greece. Maybe it’s because George Soros is Greek; maybe because the American left has always adored the European-style socialism in spite of Thomas Jefferson’s warning that “the comparison of our governments with those of Europe is like a comparison of heaven and hell.” Maybe because Obama simply WANTS hell for America. But there you have it.
Republicans acknowledged they failed to live up to their values and spent too much. But the last Republican budget (Fiscal Year 2007) passed in 2006 had only a $161 billion deficit. The very next Democrat budget for FY 2008 had a deficit of $459 billion – nearly three times larger than the one they’d demonized Republicans for. Then their FY-2009 budget dwarfed that deficit with a black hold of red ink deficit of $1.4 TRILLION. That was more money than any government in the history of the world had ever contemplated. But Democrats dwarfed that the very next year with a FY-2010 budget with a $1.6 trillion deficit. And as for FY-2011, the Democrat Congress simply refused to perform its most basic duty of governance and didn’t even bother to pass a budget. Republicans are now forced to do the last disgraced Democrat-controlled Congress’ job for them – and Democrats are demonizing them for it.
That’s how this game is played. Democrats are fascist demagogues who shrilly launch into Republicans as they try to save the American people from unparalleled future suffering. They are people who ROUTINELY demonize, demonize, demonize until THEY are the ones forced to call for the very things they demonized and tried to prevent from happening. But by the time they react this time, just as before, it will be too late.
Try this on for size: our actual debt isn’t the $14 trillion we constantly hear about; it’s more like $200 trillion. And even THAT gargantuan number doesn’t take into account the massive debts that all the liberal labor unions have amassed in state pensions (e.g., California’s public pension system has unfunded liabilities of $500 billion). We cannot possibly hope to pay this – and yet Democrats demand more and more and more, and demagogue Republicans for even trying to cut millions when we need to cut TENS OF TRILLIONS or collapse.
Democrats run ads showing a look-a-like of Republican Rep. Paul Ryan pushing an old lady off a cliff; but they want every single senior citizen to die terribly as the Medicare system completely collapses while they refuse to do anything to fix it – as even Bill Clinton openly acknowledged.
We are going to end like the PIIGS – Portugal, Ireland, Italy, Greece and Spain- because we elected Democrat swine to ensure we perished like pigs.
When that happens to us it will be the worst nightmare in history. 300 million Americans are going to go into an insanity of panic – and of course the violence will begin with the left. If you don’t have an arsenal, someone will kick down your door and murder your whole family just to eat the food in your house. And that hell on earth will be entirely because you trusted Democrats like Anthony Weiner to run your health care, your pension, your economy, your life.
I hope you vote in 2012 like your very LIFE was at stake in these elections. Because this time it truly is.
I rather routinely call Obama the F-word. No, not that F-word (although the ability to resist doing so is dwindling); the other F-word: Fascist. Barack Obama is a fascist.
I have had quite a few liberals fixate on this word, and – while ignoring the rest of my arguments – proceed to give me a lecture about how my extremism undermines my positions and arguments (which they don’t bother to consider).
I’d like to respond to that. At length.
There are many who would argue that if a politician is not as rabid as Adolf Hitler, that one cannot use this label of “fascist” – at least not unless the target is a Republican (see below). Barack Obama is not a “dictator,” these would argue. He hasn’t launched the world into global war and he hasn’t murdered 6 million Jews (at least, he hasn’t yet). So he can’t be a “fascist.” This argument fails on two parts. First of all, by such a metric, Benito Mussolini wouldn’t be a “fascist” either (except for the “dictator” part). One of the reasons it is hard to have an easy definition of “fascist” is because fascism has taken a different character in every country and culture in which it has been embraced. Hitler is not the norm or standard of fascism; he is merely the most extreme example of its virulence and danger. Secondly, even if we were to take a Hitler as our example, let us realize that Adolf Hitler was a very cunning politician who managed to gain power in a Germany that was THE most sophisticated, educated and scientific nation and culture of its day. What I am asserting is that if an Adolf Hitler were to run for the presidency of the United States in 2012, he would run a platform that we could very easily label as “hope and change,” he would demagogue his adversaries as being the cause for the nation’s plight, he would lie both cynically and outrageously to win votes and he would then proceed to push the country as far as he possibly could toward his agenda. And so here, from the outset, I am claiming that the suggestion that either Barack Obama or anyone else does not qualify as a “fascist” simply because he or she can’t be directly compared to Adolf Hitler is nothing but a straw man.
The question thus becomes, what is fascism, and then it is what is Obama steering us toward?
THE WORD “fascism” is used broadly on the left as a term of abuse. Sometimes it is used to refer to any repressive government, whatever its political form. Most commonly on the left in the U.S., it is used to describe any Republican government–in particular, any Republican government or candidate on the eve of a presidential election.
As an experiment, I typed the words “Bush fascist” and then “Obama fascist” sans quotes. I got 3,280,000 Google hits for Bush fascist (and keep in mind an awful lot of hits would have vanished in the last 11 years as domains purged articles or simply ceased to exist) versus only 2,490,000 for Obama. That means liberals were over 45% more likely to call Bush a fascist than conservatives have been to call Obama one.
And when these liberals express their outrage that I would dare call Obama a fascist and thus lower the discourse, I invariably ask them just where the hell they were when their side was teeing off on Bush for eight unrelenting years of Bush derangement syndrome??? It was rare indeed to see a liberal excoriate his fellow liberals for demonizing the president of the United States.
With all due respect, the left started this form of “discourse.” They turned it into an art form. And how dare these hypocrites dare to tell me not to do unto Obama as they did unto Bush???
That might only be a rhetorical argument, as two wrongs clearly don’t make a right. But it remains a powerful one. Liberals have forfeited any moral right to criticize conservatives for using their own tactics against them.
But I don’t simply call Obama a fascist because liberals called Bush one. I call him one because he has exhibited all kinds of fascistic tendencies, which I shall in time describe.
But fascism has a far more precise definition. Historically, fascism is a far-right movementof the middle classes (shopkeepers, professionals, civil servants) who are economically ruined by severe economic crisis and driven to “frenzy.”
In the brilliant words of Leon Trotsky, fascism brings “to their feet those classes that are immediately above the working class and that are ever in dread of being forced down into its ranks; it organizes and militarizes them…and it directs them to the extirpation of proletarian organizations, from the most revolutionary to the most conservative.”
I have no doubt that the irony of these words were entirely lost to the “Socialist Worker” who wrote the article. But allow me to illuminate it for you: think of the most infamous fascists of all time, the Nazis. What did the word “Nazi” stand for? It was the “acronym for the ‘National Socialist German Workers Party’.” Let me try that again, just in case you missed these precious little details: “National SOCIALIST German WORKERS Party.”
But ask the “Socialist Workers” and they’ll assure you that the “Socialist Workers Party” had absolutely nothing whatsoever to do with Socialist Workers. Because that would certainly be awkward, wouldn’t it???
It is rather fascinating that “Socialist Worker” would cite as his authority on fascism and who should be labeled as a “fascist” the Marxist thinker . Allow me to provide one counter statement which is based not on the “brilliant words” of a Marxist, but on the plain simple facts:
“Part of the problem in recognizing fascism is the assumption that it is conservative. [Zeev] Sternhell has observed how study of the ideology has been obscured by “the official Marxist interpretation of fascism.” Marxism defines fascism as its polar opposite. If Marxism is progressive, fascism is conservative. If Marxism is left wing, fascism is right wing. If Marxism champions the proletariat, fascism champions the bourgeoisie. If Marxism is socialist, fascism is capitalist.
The influence of Marxist scholarship has severely distorted our understanding of fascism. Communism and fascism were rival brands of socialism. Whereas Marxist socialism is predicated on an international class struggle, fascist national socialism promoted a socialism centered in national unity. Both communists and fascists opposed the bourgeoisie. Both attacked the conservatives. Both were mass movements, which had special appeal for the intelligentsia, students, and artists, as well as workers. Both favored strong centralized governments and rejected the free economy and the ideals of individual liberty. Fascists saw themselves as being neither of the right nor the left. They believed that they constituted a third force synthesizing the best of both extremes” [Gene Edward Veith, Jr., Modern Fascism: Liquidating the Judeo-Christian Worldview, p. 26].
So depending on Leon Trotsky or any other Marxist-inspired academic who merely parrots “the official Marxist interpretation of fascism” has rather serious intellectual drawbacks. And yet that is largely what we get. Far too many American academics wouldn’t be so obvious as to use the phrase, “In the brilliant words of Leon Trotsky,” but they give his ideas, theories and talking points total credence, nonetheless. The term “useful idiots” was literally coined to describe these Western “intellectuals.” And their being “useful idiots” is every bit as true today as it ever was in the past.
Consider the REAL “polar opposite”: American conservatives are capitalists, not socialists. They demand a limited national/federal government, not a massive centrally planned state as does socialism, communism and fascism. They prefer the federalist idea of powerful states’ rights against a weakened federal government, not some all-powerful Führer. And to try to force conservatives into some Nazi mold invariably means either creating straw men arguments or citing irrelevant facts (such as that conservatives favor a large military just like the Nazis did, as though virtually every single communist state does not similarly favor a large military “just like the Nazis did”). If you want an all-powerful national government that gets to decide who wins and who loses, if you want to see a system where you have to come to your government for assistance and resources with all manner of strings attached rather than being allowed to depend on yourself, your family and your community, you should embrace the political left, not the right.
By the way, another favorite idiotic red herring for liberals asserting that “Nazism was right wing” was that the Nazis hated the admittedly left wing communists. But consider the fact that Coke hates Pepsi and Barbie Doll makers hate Bratz Doll makers. Are we supposed to believe that Coke is the opposite of Pepsi as opposed to water, milk or orange juice? The fact of the matter is that Nazis and Soviet Communists hated each other because both movements had a global agenda of totalitarian dominion, and both movements were competing for the same rabidly left wing converts.
Pardon me for the following insult, but the only people who believe garbage arguments like these are ignorant fools who live in a world of straw men. Even if they have the title “PhD.” after their names.
It is for that reason that I can state categorically that Marxism and fascism are not “polar opposites” at all. They are merely two potentially complementary species of socialism. That is why China has been able to easily weave blatantly fascistic (national socialist/corporatist) elements into its Maoist communism. It is also why Joseph Stalin was able to go from being an international socialist (i.e. a communist) and then appeal to nationalism (i.e., national socialism or “fascism”) when he needed to fight Hitler, only to switch back to “international socialism” after the war, as a few lines from Wikipedia on “Russian nationalism” point out:
The newborn communist republic under Vladimir Lenin proclaimed internationalism as its official ideology[4]. Russian nationalism was discouraged, as were any remnants of Imperial patriotism, such as wearing military awards received before Civil War….
The 1930s saw the evolution of the new concept of Soviet nationalism under Joseph Stalin, based on both Russian nationalism and communist internationalism. Official communist ideology always stated that Russia was the most progressive state, because it adopted socialism as its basis (which, according to the writings of Karl Marx, is the inevitable future of world socio-economic systems). Under Lenin, the USSR believed its duty to help other nations to arrange socialist revolutions (the concept of World Revolution), and made close ties with labor movements around the world[4].
[…]
The Soviet Union’s war against Nazi Germany became known as the Great Patriotic War, hearkening back to the previous use of the term in the Napoleonic Wars. The Soviet state called for Soviet citizens to defend the ‘Motherland’, a matrilineal term used to describe Russia in the past.
[…]
In 1944, the Soviet Union abandoned its communist anthem, The International, and adopted a new national anthem which citizens of the Soviet Union could identify with.
And then, with the victory secured over fascism, the Stalinist “national socialism” (a.k.a. “fascism”) suddenly became international socialism again. The Nazis’ very name was Nationalsozialistische.
One can be a “Marxist-fascist” and combine and blend elements of both totalitarian socialist systems quite easily, as both the Russian and then the Chinese communists proved. Communism and fascism have far more in common with one another than they have in opposition; especially when you examine the fact that both political systems invariably end up becoming the same big-government totalitarian police state.
So for my first two points – namely that 1) the left has routinely demagogically labeled the right “fascist” even when 2) it is clearly the left that owes far and away the most to fascistic elements – I am going to continue to shout from the rooftops who are the real fascists in America.
That said, it is still not enough to merely point out the FACT that American liberalism has much in common with fascism. And there is a lot more yet to say.
Before I begin spouting particular examples, I therefore need to further approach just what it is that would constitute a “fascist.” And then see who and how the label fits. From The Concise Encyclopedia of Economics:
The best example of a fascist economy is the regime of Italian dictator Benito Mussolini. Holding that liberalism (by which he meant freedom and free markets) had “reached the end of its historical function,” Mussolini wrote: “To Fascism the world is not this material world, as it appears on the surface, where Man is an individual separated from all others and left to himself…. Fascism affirms the State as the true reality of the individual.”
This collectivism is captured in the word fascism, which comes from the Latin fasces, meaning a bundle of rods with an axe in it. In economics, fascism was seen as a third way between laissez-faire capitalism and communism. Fascist thought acknowledged the roles of private property and the profit motive as legitimate incentives for productivity—provided that they did not conflict with the interests of the state.
[…]
Mussolini’s fascism took another step at this time with the advent of the Corporative State, a supposedly pragmatic arrangement under which economic decisions were made by councils composed of workers and employers who represented trades and industries. By this device the presumed economic rivalry between employers and employees was to be resolved, preventing the class struggle from undermining the national struggle. In the Corporative State, for example, strikes would be illegal and labor disputes would be mediated by a state agency.
Theoretically, the fascist economy was to be guided by a complex network of employer, worker, and jointly run organizations representing crafts and industries at the local, provincial, and national levels. At the summit of this network was the National Council of Corporations. But although syndicalism and corporativism had a place in fascist ideology and were critical to building a consensus in support of the regime, the council did little to steer the economy. The real decisions were made by state agencies such as the Institute for Industrial Reconstruction (Istituto per la Ricosstruzione Industriale, or IRI), mediating among interest groups.
[…]
Mussolini also eliminated the ability of business to make independent decisions: the government controlled all prices and wages, and firms in any industry could be forced into a cartel when the majority voted for it. The well-connected heads of big business had a hand in making policy, but most smaller businessmen were effectively turned into state employees contending with corrupt bureaucracies. They acquiesced, hoping that the restrictions would be temporary. Land being fundamental to the nation, the fascist state regimented agriculture even more fully, dictating crops, breaking up farms, and threatening expropriation to enforce its commands.
Banking also came under extraordinary control. As Italy’s industrial and banking system sank under the weight of depression and regulation, and as unemployment rose, the government set up public works programs and took control over decisions about building and expanding factories. The government created the Istituto Mobiliare in 1931 to control credit, and the IRI later acquired all shares held by banks in industrial, agricultural, and real estate enterprises.
The image of a strong leader taking direct charge of an economy during hard times fascinated observers abroad. Italy was one of the places that Franklin Roosevelt looked to for ideas in 1933…
Fascism is all about the “community,” not the individual. Its message is about the good of the nation, or the people (or the Volk), or the community, rather than the good of a nation’s individual citizens. It is about distributing and then redistributing the wealth and returning it to “its rightful owners” under the guise of an all-powerful state rather than recognizing and rewarding individual achievement. In short, when Hillary Clinton explained that, “It takes a village,” an educated Nazi would have snapped his fingers and excitedly shouted, “Ja! JA! Das ist ES!”
For Obama, the collectivism, community or “village” thing is such a profound part of him that he has literally made it an integral part of his very heretical form of “Christianity,” which very much stresses individual salvation and individual responsibility. Obama has on several occasions put it this way:
For example, in 1995, Obama said, “my individual salvation is not going to come about without a collective salvation for the country…” and again in May of 2008, “our individual salvation depends of collective salvation.”
In the Christian faith, there is no such thing as collective salvation. Salvation is an individual choice. It is personal acceptance of Jesus as savior, Son of the living God.
Obama’s is a wildly perverted view of orthodox Christianity. It so distorts true Christianity at such a fundamental level, in fact, that one literally has to go to Hitler to find a suitable similar parallel from a “Christian” national leader. The great Protestant Reformer Martin Luther – the most famous German prior to Hitler – had written the most monumental text of German culture prior to Hitler’s Mein Kampf. It was called “The Bondage of the Will,” which was considered THE manifesto of the Reformation. According to Luther, the human will was in bondage to sin. The fallen will, if left to itself, will choose what is evil. The human will has been perversely set against the righteous will of God. For sinful human beings, the will is not in a state of liberty but is in bondage to its worst impulses. Luther wrote in this work, “When our liberty is lost we are compelled to serve sin: that is, we will sin and evil, we speak sin and evil, we do sin and evil.” Adolf Hitler infamously turned that key doctrine of Christianity on its head in his “The Triumph of the Will,” in which he exalted depraved human will to an altogether different level of human depravity. Which is to say that Hitler was so profoundly wrong that he proved Luther right.
But getting back to Obama’s profoundly anti-Christian concept of “collective salvation,” the Nazis would have been all over that, enthusiastically shouting their agreement, “Ja! JA! Das ist ES!” Recall the encyclopedia entry on fascism stating that, “Fascism affirms the State as the true reality of the individual,” which was then further defined as “collectivism.” And the Nazis repeatedly called upon loyal Germans to make horrendous sacrifices in the name of that collective.
What the Nazis pursued was a form of anti-capitalist anti-conservative communitarianism encapsulated in the concept of Volksgemeinschaft, or “people’s community.”
From the Nazi Party Platform:
– The first obligation of every citizen must be to work both spiritually and physically. The activity of individuals is not to counteract the interests of the universality, but must have its result within the framework of the whole for the benefit of all Consequently we demand:
– Abolition of unearned (work and labour) incomes. Breaking of rent-slavery.
– In consideration of the monstrous sacrifice in property and blood that each war demands of the people personal enrichment through a war must be designated as a crime against the people. Therefore we demand the total confiscation of all war profits.
– We demand the nationalization of all (previous) associated industries (trusts).
– We demand a division of profits of all heavy industries.
– We demand an expansion on a large scale of old age welfare.
– We demand the creation of a healthy middle class and its conservation, immediate communalization of the great warehouses and their being leased at low cost to small firms, the utmost consideration of all small firms in contracts with the State, county or municipality.
– We demand a land reform suitable to our needs, provision of a law for the free expropriation of land for the purposes of public utility, abolition of taxes on land and prevention of all speculation in land.
– We demand struggle without consideration against those whose activity is injurious to the general interest. Common national criminals, usurers, Schieber and so forth are to be punished with death, without consideration of confession or race.
– We demand substitution of a German common law in place of the Roman Law serving a materialistic world-order.
– The state is to be responsible for a fundamental reconstruction of our whole national education program, to enable every capable and industrious German to obtain higher education and subsequently introduction into leading positions. The plans of instruction of all educational institutions are to conform with the experiences of practical life. The comprehension of the concept of the State must be striven for by the school [Staatsbuergerkunde] as early as the beginning of understanding. We demand the education at the expense of the State of outstanding intellectually gifted children of poor parents without consideration of position or profession.
– The State is to care for the elevating national health by protecting the mother and child, by outlawing child-labor, by the encouragement of physical fitness, by means of the legal establishment of a gymnastic and sport obligation, by the utmost support of all organizations concerned with the physical instruction of the young.
– We demand abolition of the mercenary troops and formation of a national army.
– We demand legal opposition to known lies and their promulgation through the press. In order to enable the provision of a German press, we demand, that: a. All writers and employees of the newspapers appearing in the German language be members of the race: b. Non-German newspapers be required to have the express permission of the State to be published. They may not be printed in the German language: c. Non-Germans are forbidden by law any financial interest in German publications, or any influence on them, and as punishment for violations the closing of such a publication as well as the immediate expulsion from the Reich of the non-German concerned. Publications which are counter to the general good are to be forbidden. We demand legal prosecution of artistic and literary forms which exert a destructive influence on our national life, and the closure of organizations opposing the above made demands.
Ah, yes, the Nazis had their “Fairness Doctrine” long before this current generation of liberals had theirs.
You read that Nazi Party Platform carefully, and you tell me if you see small government conservative Republicans or big government liberal Democrats written all over it.
Now, you read the Nazi Party Platform, and given what American liberals want and what American conservatism opposes, it is so obvious which party is “fascist” that it isn’t even silly. Then you ADD to that the fact that fascism and American progressivism (which is liberalism) were so similar that the great fascists of the age couldn’t tell the damn difference.
Since you point out Nazism was fascist, let’s look at some history as to WHO was recognized as fascist in America.
Fascism sought to eliminate class differences and to destroy/replace capitalism and laissez-faire economics.
H.G. Wells, a great admirer of FDR and an extremely close personal friend of his, was also a great progressive of his day. He summed it up this way in a major speech at Oxford to the YOUNG LIBERALS organization under the banner of “Liberal Fascism”: “I am asking for a Liberal Fascisti, for enlightened Nazis.” He said, “And do not let me leave you in the slightest doubt as to the scope and ambition of what I am putting before you” and then said:
These new organizations are not merely organizations for the spread of defined opinions…the days of that sort of amateurism are over – they are organizations to replace the dilatory indecisiveness of democracy. The world is sick of parliamentary politics…The Fascist Party, to the best of its ability, is Italy now. The Communist Party, to the best of its ability, is Russia. Obviously the Fascists of Liberalism must carry out a parallel ambition on still a vaster scale…They must begin as a disciplined sect, but must end as the sustaining organization of a reconstituted mankind.”
H.G. Wells pronounced FDR “the most effective transmitting instrument possible for the coming of the new world order.” And of course, we easily see that the new world order Wells wanted was a fascist one. In 1941, George Orwell concluded, “Much of what Wells has imagined and worked for is physically there in Nazi Germany.”
It was from the lips of liberal progressive H.G. Wells that Jonah Goldberg got the title of his book, Liberal Fascism. Goldberg didn’t just invent this connection: H.G. Wells flagrantly admitted it and George Orwell called him on it. All Goldberg did was rediscover history that liberals buried and have used every trick imaginable to keep buried.
And as a tie-in to our modern day, who more than Barack Obama has been more associated with said FDR?
But let me move on to some real red meat. In just what specific, concrete ways can I call Obama a fascist?
Well, to begin with, there is the signature achievement of his entire presidency, his national health care system (ObamaCare). For liberals, it is nothing but the most bizarre coincidence that Nazi culture had a national health care system that was quite rightly considered the wonder of its day by socialists in America. It is the most despicable of insults that Sarah Palin excoriated ObamaCare as “death panels” – even though it is more precisely a bureaucratic maze consisting of more like 160 separate death panels:
And the “czar” thing hits a very fascist nerve, too. Obama has appointed 39 czars who are completely outside our Constitutional process. Obama signed a budget bill into law that required him to remove these czars, but why would a fascist trouble himself with outmoded things like “laws”? One of the enraged Republicans responded, “The president knew that the czar amendment was part of the overall budget deal he agreed to, and if he cannot be trusted to keep his word on this, then how can he be trusted as we negotiate on larger issues like federal spending and the economy.” And of course, he’s right.
But why do I say it’s financial fascism in 20/20 hindsight? Because of what we just learned: in spite of all the bogus lying promises and the massive takeover “for our own good,” Obama didn’t fix anything. Instead he made it WORSE:
The financial system poses an even greater risk to taxpayers than before the crisis, according to analysts at Standard & Poor’s. The next rescue could be about a trillion dollars costlier, the credit rating agency warned.
S&P put policymakers on notice, saying there’s “at least a one-in-three” chance that the U.S. government may lose its coveted AAA credit rating. Various risks could lead the agency to downgrade the Treasury’s credit worthiness, including policymakers’ penchant for rescuing bankers and traders from their failures.
“The potential for further extraordinary official assistance to large players in the U.S. financial sector poses a negative risk to the government’s credit rating,” S&P said in its Monday report.
But, the agency’s analysts warned, “we believe the risks from the U.S. financial sector are higher than we considered them to be before 2008.”
Because of the increased risk, S&P forecasts the potential initial cost to taxpayers of the next crisis cleanup to approach 34 percent of the nation’s annual economic output, or gross domestic product. In 2007, the agency’s analysts estimated it could cost 26 percent of GDP.
Last year, U.S. output neared $14.7 trillion, according to the Commerce Department. By S&P’s estimate, that means taxpayers could be hit with $5 trillion in costs in the event of another financial collapse.
Experts said that while the cost estimate seems unusually high, there’s little dispute that when the next crisis hits, it will not be anticipated — and it will likely hurt the economy more than the last financial crisis.
So much for the massive and unprecedented fascist government takeover.
Think last year’s $700 billion Wall Street rescue package was beaucoup bucks to spend bailing out the nation’s floundering financial system? That’s chump change compared to what the overall price tag could be, a government watchdog says.
The inspector general in charge of overseeing the Treasury Department’s bank-bailout program says the massive endeavor could end up costing taxpayers almost $24 trillion in a worst-case scenario. That’s more than six times President Obama’s proposed $3.55 trillion budget for 2010.
Nobody here but us fascists. And we sure aint talking.
Then there are other issues that the left usually uses to attack conservatives, such as racism. Wasn’t Hitler a racist, just like conservatives? The problem is, the liberals are as usual upside-down here. After running as the man to create racial harmony, Barack Obama has instead done more to racially polarize America than any president since other famous progressives such as Woodrow Wilson and FDR. Frankly, if one were to conduct a major study of racial politics, and the setting up in opposition of one racial group against another, just which party has emphasized race and race-baiting more?
Hitler’s Jew-baiting was all about the idea that one race had taken over the culture, had the money and the power, and was using its influence to oppress the people in the banking system and anywhere else that mattered. And Hitler’s constant screed was that Germany needed to confiscate the Jews’ wealth and then redistribute it. With all respect, all the left has done is replace “Jew” with “Caucasian” and making the exact same claims.
And with all this hard-core racist demagoguing, I’m supposed to say that, “Oh, yes, it’s the conservatives who are guilty of demagoguing race”??? Seriously???
Obama has Samantha Powers (the wife of Cass Sunstein, the man who “nudges us”) close to him and advising him on matters of war. According to the very liberal publication The Nation, “She began to see war as an instrument to achieving her liberal, even radical, values.” What if you had an ultra conservative – oh, say a Sarah Palin – openly acknowledged to pursue war and risk American lives to advance her radical values??? What would the left call this if not “fascist”?
But it’s only fascist if Republicans do it, of course.
Also in yesterday’s news is the fact that Obama is the perpetual demagogue– which is a quintessentially fascist tactic. Obama demonized Bush for trying to raise the debt ceiling until he needed to raise it. Now it would be un-American for Republicans to act the same exact way Obama acted. In the same demagogic spirit, Obama personally invited Paul Ryan to a speech just so he could personally demonize him. The same Obama who lectured Republicans that it would be counter-productive to rely on name-calling and accusations in the health care debate launched into a vicious demagogic attack. Ryan correctly said that “What we got yesterday was the opposite of what he said is necessary to fix this problem.” But that is par for the golf course for a fascist. If that wasn’t enough, Obama held a White House conference for “stake holders” in the immigration debate and refused to invite a single governor from a border state.
A Republican equivalent would have had to come out of a deep involvement with some vile racist militia organization to approximate Obama’s background. And liberals would rightly label such a politician a fascist for his past alone.
Here’s a recent Youtube video of Obama’s key union allies on camera saying, “We’re not going to rely on the law,” and, “Forget about the law” as they seek to impose their unions basically whether workers want them or not:
I don’t want to ridicule Barney Frank on account of his weight. Suffice it to say he is easily able to pull off the two faces he routinely wears, and the two sides he routinely takes.
Frank: “well one of my biggest differences with the Bush administration, even with the Clinton administration, was that they overdid that. I have always been critical of this effort to equate a decent home with home ownership. I think we should have been doing more to provide rental housing, my efforts have been to try and get affordable rental housing I was very much in disagreement with this push into home ownership and I think the federal government should not be artificially doing that. The goal is for people to have decent housing and I think beginning in the Clinton administration, exacerbated by Bush, we pushed people too much into home ownership…”
– Barney Frank, May 20, ‘2010 on CNBC.
And here’s Frank from 2005 documenting the fact that Barney Frank in 2010 is a rank liar:
“This is a very important resolution, particularly at this time, because we have, I think, an excessive degree of concern right now about home ownership and its role in the economy.
Obviously, speculation is never a good thing. But those who argue that housing prices are now at the point of a bubble seem to be missing a very important point. Unlike previous examples, where substantial excessive inflation of prices later caused some problems, we are talking here about an entity, home ownership, homes, where there is not the degree of leverage that we have seen elsewhere.
This is not the dot-com situation. We had problems with people having invested in business plans for which there was no reality and people building fiber-optic cable for which there was no need. Homes that are occupied may see an ebb and flow in the price at a certain percentage level,but you will not see the collapse that you see when people talk about a bubble.
So those of us on our committee in particular will continue to push for home ownership.
– Barney Frank, 2005
You’re right, Barney. It wasn’t the Dot-com situation. It was a hundred times WORSE than the Dot-com situation, even given as bad as the Dot-com bubble was. And yeah, you sure were right when you said there wouldn’t be a collapse, weren’t you?
So first of all, we have Barney Frank – liberal Democrat par excellence – acknowledging that the bad policy that led to the mortgage market meltdown was actually a CLINTON policy that Bush merely continued (most likely because he knew he’d be called a “racist” the moment he ended a program that gave billions of dollars to minorities to buy homes they couldn’t afford).
Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
It’s beyond asinine that Democrats blame Bush for ruining the economy, and praise Clinton as having the mostest wonderfulest economy ever, when it was a Clinton program that ruined the Bush economy. But that’s the mainstream media narrative for you.
So Barney Frank reminds us that the destruction of the Bush economy was bookended by massive Clinton failures – the Dot-com bubble collapse in 2001 and the housing market bubble collapse in 2008. And Clinton was never blamed for either of them by the propagandist mainstream media.
The second thing you can notice is that Democrats like Barney Frank – who were so quick to pounce all over the mortgage meltdown and blame Bush for it – were not only the ones who created the problem, but were the ones who defended the problem.
WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
So Bush WANTED to regulate, in contradiction to all the lies that you heard.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
You would find if you bothered to look at the facts that Bush demanded reform and regulation of Fannie Mae and Freddie Mac SEVENTEEN TIMES during his presidency. And that Democrats refused to regulate the GSEs and even threatened filibusters against regulation. Not that the mainstream media is honest enough to report the truth.
You would find if you bothered to look at the facts that financial experts literally predicted that the Clinton-birthed Fannie and Freddie expansion would ultimately explode.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
What do we have, even in the pages of the New York Slimes? A prediction that as soon as the economy cooled off, the mortgage market wold explode like a depth charge and the government would have to step in to prevent a catastrophe? From a Clinton program?
The same man – Peter Wallison – who had predicted the disaster from 1999 wrote a September 23, 2008 article in the Wall Street Journal entitled “Blame Fannie Mae and Congress For the Credit Mess.”
The New York Times acknowledged that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac “buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.”
Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more. . . .
In a nutshell, Fannie and Freddie, acting as Government sponsored enterprises, bought tens of millions of mortgages, and then repackaged them into huge mortgage-backed securities that giant private entities such as Bear Stearns, AIG and Lehman Brothers purchased. What made these securities particularly attractive to the private banking entities was that these securities were essentially being sold – and had the backing – of the United States government.
The Role of the GSEs is to provide liquidity and stability to the U.S. housing and mortgage markets. Step 1 Banks lend money to Households to purchase and refinance home mortgages Step 2 The GSEs purchase these mortgage from the banks Step 3 GSEs bundle the mortgages into mortgage-backed securities Step 4 GSEs sell mortgage-backed and debt securities to domestic and international capital investors Step 5 Investors pay GSEs for purchase of debt and securities Step 6 GSEs return funds to banks to lend out again for the issuance of new mortgage loans.
Now, an intelligent observer would note a conflict: the GSE’s role was to “provide stability,” and yet they were taking on “significantly more risk” in the final year of the Clinton presidency. What’s wrong with this picture?
The GSEs Fannie Mae and Freddie Mac were designed to bundle up the mortgages into mortgage backed securities and then sell them to the private market.
Fannie Mae is exempt from SEC [Securities and Exchange Commission] regulation. Which screams why Bush wanted to regulate them. This allowed Fannie Mae to bundle up mortgages, which were then rated AAA with no requirement to make clear what is in the bundle. Which screams why Bush wanted to regulate them.
This is what has allowed toxic instruments that have been sold across the world. It also created a situation where money institutions did not know and could not find out whether potential inter-bank business partners were holding these “boiled babies on their books, complete with a golden stamp on the wrapping,” rather than safe instruments. This then inclined banks to a natural caution, to be wary of lending good money to other banks against these ‘assets’. And thus banks refused to lend to one another.
Congress chartered Fannie and Freddie to provide access to home financing by maintaining liquidity in the secondary mortgage market. Today, almost half of all mortgages in the U.S. are owned or guaranteed by these GSEs. They are mammoth financial institutions with almost $1.5 Trillion of debt outstanding between them. With the fiscal challenges facing us today (deficits, entitlements, pensions and flood insurance), Congress must ask itself who would actually pay this debt if Fannie or Freddie could not?
And thus you had a financial disaster created by one William Jefferson Clinton and one Democrat Party. And now a second act of economic destruction is being planned by Barack Obama.
The 2008 economic collapse that Democrats were elected to fix was itself created by Democrats who will now continue the very policies that created the disaster in the first place.
Democrats then demonized Bush for merely being there when the disaster happened. When they had created the mess, and when they had refused to allow Bush to do anything to prevent a Democrat-created disaster that he and other Republicans saw coming, but ultimately lacked the courage to stop.
President Barack Obama, in the heart of the U.S. auto industry, told a crowd of workers that the government bailouts of General Motors Co. and Chrysler Group LLC are giving taxpayers a return on their investment.
Heading into a congressional election season in which polls show the public skeptical about the $84.8 billion rescue and anxious about economy, Obama is using the backdrop of Detroit- area plants owned by GM and Chrysler to promote what he says is an industry revival that has saved more than a million jobs.
“The fact that we’re standing in this magnificent factory today is a testament to the decisions we made,” Obama said at a Chrysler factory that recently added a second shift of workers to build the Jeep Grand Cherokee.
Obama told about 1,000 employees at the factory that, if his opponents had been successful in blocking aid for automakers, their jobs might not exist. Their efforts are “proving the naysayers wrong,” he said.
“They said we should just walk away and let those jobs go,” Obama said. “Today, this industry is growing stronger. It’s creating new jobs.”
Voter Skepticism
Voters aren’t persuaded. A Bloomberg National Poll conducted July 9-12 that shows the federal assistance package to automobile companies is becoming less popular: 48 percent say they became less supportive in recent months versus 17 percent who say they have become more supportive.
Steve Rattner, the former head of the president’s automotive task force, said that perception is disappointing.
“It appears that those of us behind it haven’t succeeded in convincing people that it’s worked,” he said in an interview.
Since GM and Chrysler exited bankruptcy a little more than a year ago, the industry — including Ford Motor Co., which didn’t seek federal aid — has re-hired 55,000 workers after shedding 334,000 in the year before.
So $84.8 billion spent, and 55,000 jobs rehired back.
Oh, and the 55,000 jobs that came back counts rehires for Ford, the company that didn’t take any of Obama’s bailouts. Or Bush’s, for that matter.
One million, five hundred and forty-one thousand, eight hundred and eighteen dollars per job. And Obama is pitching it as some kind of grand achievement worthy of a messiah.
Unions are happy. Of course, our children are ultimately going to be chained to giant millstones and forced to pull them in a circle for the rest of their lives. As will everyone else, including senior citizens – at least until they get “permanently retired” by a death panel. But unions are happy. And if you’re not happy, well, screw you, you racist.
And what do we get for our $85 billion besides a payoff to the labor unions that got Obama elected? Basically, we get a mostly electric clown car called the Chevy Volt that’s going to be “a car for idiots.” It will have some cache as the car for “for the intellectual elite who want to show what enlightened souls they are.” Which is tantamount to the central selling principle behind the emperor’s new clothes.
Every single Clown Car GM sells is going to lose money. But that’s okay. Because Barry Hussein – courtesy of the American taxpayer – will subsidize every Clown Car that is sold at a loss.
As for Obama’s claim that he’s “saved” a million jobs, that’s the kind of reasoning that only someone idiotic enough to buy a $41,000 clown car to show how superior they are would buy. How about this: Bush saved fifty million jobs. If you don’t think he did, you prove he didn’t. In fact, Bush saved the world. Because aliens with superior technology would have invaded earth had Bush not been commander-in-chief. Prove they wouldn’t have.
“One can search economic textbooks forever without finding a concept called ‘jobs saved,'” said Carnegie Mellon University professor Allan Mentzler. “It doesn’t exist for good reason: How can anyone know that his or her job has been saved?” Which is to say, a purely rhetorical argument that no American president has ever in history had the naked chutzpah to use amounts to the heart of Obama’s economic policy.
Had George Bush used that asinine argument to justify his economic leadership and vision, he would have been laughed right out of the White House by the media. But Barack Obama is using the asinine argument, so it obviously must be true.
We are about to see why the Soviet Union failed. The government spent all kinds of money producing crap cars to keep the party proletariat employed. But they were crap cars. And nobody bought them. The same thing applies to Obama’s GM bailout and the Chevy Klown Kar. And the same with all the boondoggles Obama built with our trillion dollars (actually with what will become our $3.27 trillion, but who’s really counting any more?).
Obama’s boast about the auto industry jobs is a microchosm of the overall stupidity of Obama’s “stimulus.” We have spent over $534 BILLION (that’s the 62% of the $862 billion stimulus that has been spent so far) in order to create some 599,108 jobs.
Do the math.
That boils down to an average of $892,220 PER JOB.
I mean, that ridiculous figure is less than the even more ridiculous figure of more than $1.5 million for each union auto job. But then again, some of those nearly 600,000 jobs probably weren’t union, which accounts for the relatively trivial figure of $892,000.
Obama is cheering all this, but the term “Pyrrhic victory” comes to mind. These victories are going to implode America into a ruin unlike anything that even historians have ever heard of.
Gallup’s generic polling shows the number of voters saying that they would vote for Republicans rising three points from last week, while the number saying they will vote for Democrats dropped four points. The 49%-43% lead for the Republicans is the largest that the pollster has ever recorded for the party. Moreover, Democratic enthusiasm for voting this fall fell a point, while enthusiasm among Republicans stayed about fifteen points higher. This indicates an even wider lead for Republicans once Gallup imposes a likely voter screen this fall.
There’s any number of reasons for this: the public’s perception of Obama’s response to the oil spill, the shaky stock market performance last week, continued concern about the economy and spending. The bottom line is that, despite what is perceived as an underperformance for the Republicans in PA-12 a couple of weeks ago, there are still plenty of Democrats in trouble for this November.
Keep up the good work, Democrats.
At the rate you’re going, there may not even BE any Democrats soon. Because you suck, and people are starting to figure that out.
In addition to the fact that oil is pouring into the ocean at a rate that defies comprehension (we’re up to four times the calamity that the Exxon Valdez created with no end in sight), our banks that anchor our economy are bleeding out nearly as badly:
Although the federal bailout stabilized the banking system, bank failures are continuing at at rapid clip. Check out the latest federal tally. More than twice as many banks and savings and loans have been seized by regulators this year as in the same period last year: 73 in 2010, and 33 in 2009.
Banking analysts have long been warning us to expect a bumper crop of failures among small- to medium-sized community and regional banks this year. Many of the big banks that teetered on the edge of collapse had made bad bets on exotic mortgage securities. But most of the smaller banks are feeling the effects of residential mortgage foreclosures (such at the one pictured here) and, increasingly, commercial property loans going bad.
With 78 closures nationwide so far this year, the pace of bank failures is more than double that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 36 banks. The pace has accelerated as banks’ losses mount on loans made for commercial property and development.
Now, remember that the first half of last year was the DEPTHS of the recession. And it’s more than twice as bad this year as it was during those depths of the recession.
The only thing worse than having Republicans run things is having Democrats run things. Only Democrats run things so much worse that America compares to a Swiss watch under Republicans.
Unemployment is likely to rise to 13 percent or higher and will weigh on the economy for several years, countering government efforts to stabilize the banking industry, analyst Meredith Whitney told CNBC.
And a year later, does it appear that the government has stabilized the banking industry? NOT EVEN FREAKING CLOSE!!! The factors that Whitney cited in predicting 13% unemployment are happening before your very eyes.
Looking at 13% unemployment coming up, all I can think of is Al Pacino in Scarface: “Say hello to my little friend!”
As bad a year as Bush had (thanks to Democrats who refused to do anything about the mortgage security crisis created and sustained by Fannie and Freddie), unemployment was 7.6% when Bush left office.
What was it the last month statistics were available, under Obama’s, Pelosi’s, and Reid’s terrible misrule? 9.9%. And that after a massive failed stimulus that Obama promised would keep unemployment under 8%. Obviously, it did nothing of the sort, but our children’s children’s children’s children will still be paying off a $3.27 TRILLION black hole of debt anyway.
This means that as of this moment, assuming the new debt were to settle today, the US has $13,031,095 billion in debt: congratulation America – you have now passed lucky $13 trillion in total debt. But don’t worry, we won’t stay here for long. At the current rate of issuance, $14 trillion will be passed in 8 months, and $15 trillion in another 7. By the end of 2011, we estimate total US sovereign debt to be about $15.5 trillion.
Right now, under Barry Hussein, it is $13.o28 trillion. Which is to say that Obama increased the debt by more than $2.4 trillion in only fifteen months. That will be more than $3.4 trillion in just over two years in office. By the end of 2011, after less than three full years in office, Obama’s share of the debt will be $4.9 trillion.
Which is to say that Obama will have racked up as much debt as Bush did in eight years in only three. Obama is increasing the debt at nearly three times the rate that Bush did.
Which goes back to what I said about Republicans being bad – unless you compare them against Democrats.
We are hurtling toward a disaster that will create a collapse that will ultimately make the Great Depression look like a walk in the park. The United States of America is going to completely implode – and no one will bail us out when it happens.
You want to watch your kids starve to death before your eyes? Elect Democrats. Because that would be the kind of “change” you can truly “hope” for.
Stupid, lying, forever full of bull Rep. Barney Fwank (D-Mass.) (No relation to Elmer Fudd) was speaking at a forum on national housing policy back in December, 2006. Shortly after this speech, Fwank became Chairman of the House Financial Services Committee. Some of the comments he made at this forum go to prove that he and the Democrats are liars, thieves, incompetents, and will make up stories as they go to fit any situation. This is not leadership, it’s incompetence.
Here are some quotes from this video:
“You will see far less difference with Democrats taking over in the Financial Services regulatory area…..One of the things we did was try to reduce the reporting requirements from the banks to the financial detectives. Far too much has to be reported now in my judgment.”
Well, I guess if they reported more, it would be easier to prosecute all of the fraud that took place, or better yet, the fraud would never have occurred. Still willing to blame the economic mess on Bush?
Then he babbles about the now troubled Fannie Mae and Freddie Mac: “You could have cut back on their ability to borrow as cheaply or you could leave that benefit in place and distribute it more fairly. That’s what we chose to do with the affordable housing fund.”
So, welfare loans for those who could not afford them, and what did we get? A banking crisis related to all the foreclosures because we loaned money to people who couldn’t’ afford to borrow it. Still willing to blame the economic mess on Bush?
Fwank babbles about the housing bubble, before it went bust: “I do want to address this thing about the bubble. I think the bubble is an entirely inappropriate metaphor. Let me just be very clear, houses ain’t tulips. Houses today even with the drop in housing prices are more valuable than tulips were however many years ago when we had the tulip business.”
Fwank on the busted bubble: “I think it’s a good thing that housing prices are dropping…..A 10% drop in housing prices is a good thing. Housing was over-valued.”
Still willing to blame the economic mess on Bush?
Fwank on the busted bubble again: “…I don’t think that there’s a crisis, and I do think that the end result in a 10% drop in many parts of the country will be a more rational and healthier housing market.”
I’ve tried to tackle this issue in previous articles:
But Barney Frank might do a better job demonstrating that Democrats were all creating the housing mortgage meltdown that imploded our economy than anyone.
Frank acknowledges that the policies that led to Fannie Mae and Freddie Mac’s implosion were DEMOCRAT policies.
And it was Fannie and Freddie that led to this massive economic disaster. From Bloomberg:
Dec. 31 (Bloomberg) — Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.
“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.
The U.S. seized the two mortgage financiers in 2008 as the government struggled to prevent a meltdown of the financial system. The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and mid-2006, according to the S&P/Case- Shiller home-price index.
The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.
Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said.
“It turns out it was impossible to regulate them,” he said. “They were too powerful.” He said no one knows how much will be needed to keep the companies solvent.
You can go to another couple of my articles to see that it was Democrats’ policies and refusal to regulate Fannie and Freddie that led to the 2008 economic collapse:
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
“These two entities – Fannie Mae and Freddie Mac – are not facing any kind of a financial crisis.” Unless you consider the biggest bailout in the history of the world a “financial crisis,” that is. The AIG bailout was $85 billion. The GM bailout was for $49.5 billion. Compare those to the $400 billion bailout Obama has been handing out to Fannie Mae and Freddie Mac.
“Not facing any kind of financial crisis.”
“I think it’s a good thing that housing prices are dropping. . . A 10% drop in housing prices is a good thing. Housing was over-valued.”
“I think the bubble is an entirely inappropriate metaphor.”
“One of the things we did was try to reduce the reporting requirements.”
“You could have cut back on their ability to borrow as cheaply or you could leave that benefit in place and distribute it more fairly. That’s what we chose to do with the affordable housing fund.”
DEMOCRATS CAUSED THIS HELL. THEY WERE ALL OVER IT.
And the Democrat Party that caused this mess to begin with is out doing the same crap that imploded us in the first place all over again.
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] Investors Service said on Monday that it had changed its outlook on the AAA rating of the European Union to negative, and that it might downgrade the rating if it decides to cut the ratings on the union’s four largest budget contributors.
Start Thinking Right 