Congress, keep your hands out of my pockets!
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Categories: Economic Fairness & Security, Effective & Ethical Government
Categories: Economic Fairness & Security, Effective & Ethical Government
Since the elected members of Congress have now done the 'politically-correct' thing by their constituents by voting the bailout down yesterday, they are now free to vote for and adopt the bail out that so many found 'distasteful' to voters and hellions back home who flooded phone lines and emails protesting any bailout of the banking systems. You thought they were through? They haven't even considered all the options, according to a recent article in the New York Times. Here are some interesting highlights from the article… note the rate of inflation that was the result of banking 'deregulation' which McCain-Palin seem so anxious to follow through on:
From the NY Times
"September 23, 2008
Stopping a Financial Crisis, the Swedish Way
By CARTER DOUGHERTY
… "A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar? It does to Sweden. The country was so far in the hole in 1992 -- after years of imprudent regulation, short-sighted economic policy and the end of its property boom -- that its banking system was, for all practical purposes, insolvent. But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.
"Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
" "If I go into a bank," said Bo Lundgren, who was Sweden's finance minister at the time, "I'd rather get equity so that there is some upside for the taxpayer."
… "Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to
defend Sweden's currency, the krona, caused overnight interest rates to spike at one
point to 500 percent. The Swedish economy contracted for two consecutive years after a
long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.
"After a series of bank failures and ad hoc solutions, the moment of truth arrived in September 1992, when the government of Prime Minister Carl Bildt decided it was time to clear the decks. Standing shoulder-to- shoulder with the opposition center-left, Mr. Bildt's conservative government announced that the Swedish state would guarantee all bank deposits and creditors of the nation's 114 banks. Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral."
It would appear that to most Congressional members the idea of turning the light of shame on the real cause of the problem, that is to say the men who made it, rather than focusing on the problem they created is 'distasteful,' and that we as taxpayers should be good sports and reinvest our $300 or $600 refund checks… plus a few thousand (tens on hundreds with interest and 'fees') more a piece to 'help out these ailing businesses' that we need to 'keep our economy strong' through greed, mismanagement, and, dare I say it, theft… so their executives can take their taxpayer provided golden parachutes, invest in their Cayman Island paradises where they don't have to pay taxes back to the government that bailed them out… do you REALLY get the picture?
Link to full article: http://dealbook.blogs.nytimes.com/2008/09/23/stopping-a-financial-crisis-the-swedish-way/?scp=3&sq=Sweden&st=cse
From the NY Times
"September 23, 2008
Stopping a Financial Crisis, the Swedish Way
By CARTER DOUGHERTY
… "A banking system in crisis after the collapse of a housing bubble. An economy hemorrhaging jobs. A market-oriented government struggling to stem the panic. Sound familiar? It does to Sweden. The country was so far in the hole in 1992 -- after years of imprudent regulation, short-sighted economic policy and the end of its property boom -- that its banking system was, for all practical purposes, insolvent. But Sweden took a different course than the one now being proposed by the United States Treasury. And Swedish officials say there are lessons from their own nightmare that Washington may be missing.
"Sweden did not just bail out its financial institutions by having the government take over the bad debts. It extracted pounds of flesh from bank shareholders before writing checks. Banks had to write down losses and issue warrants to the government. That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
" "If I go into a bank," said Bo Lundgren, who was Sweden's finance minister at the time, "I'd rather get equity so that there is some upside for the taxpayer."
… "Property prices imploded. The bubble deflated fast in 1991 and 1992. A vain effort to
defend Sweden's currency, the krona, caused overnight interest rates to spike at one
point to 500 percent. The Swedish economy contracted for two consecutive years after a
long expansion, and unemployment, at 3 percent in 1990, quadrupled in three years.
"After a series of bank failures and ad hoc solutions, the moment of truth arrived in September 1992, when the government of Prime Minister Carl Bildt decided it was time to clear the decks. Standing shoulder-to- shoulder with the opposition center-left, Mr. Bildt's conservative government announced that the Swedish state would guarantee all bank deposits and creditors of the nation's 114 banks. Sweden formed a new agency to supervise institutions that needed recapitalization, and another that sold off the assets, mainly real estate, that the banks held as collateral."
It would appear that to most Congressional members the idea of turning the light of shame on the real cause of the problem, that is to say the men who made it, rather than focusing on the problem they created is 'distasteful,' and that we as taxpayers should be good sports and reinvest our $300 or $600 refund checks… plus a few thousand (tens on hundreds with interest and 'fees') more a piece to 'help out these ailing businesses' that we need to 'keep our economy strong' through greed, mismanagement, and, dare I say it, theft… so their executives can take their taxpayer provided golden parachutes, invest in their Cayman Island paradises where they don't have to pay taxes back to the government that bailed them out… do you REALLY get the picture?
Link to full article: http://dealbook.blogs.nytimes.com/2008/09/23/stopping-a-financial-crisis-the-swedish-way/?scp=3&sq=Sweden&st=cse
