Checks balanced

I'm having a hard time playing optimistic after that last post, but I caught a good story today too...

In spite of Citigroup's success in exchanging re-election donations for feigned ignorance at the executive branch, the judicial put a bitta smackdown on their asses today.

The SEC, who is appointed by representatives of the people to keep the stock market humming along for the good of the people made a deal with Citigroup. This deal was to close the books on their part in a massive toxic mortgage scam. The deal looks like this:
Citigroup sold $1 BILLION in bunk mortgages to its customers. Knowing they were bunk and unlikely to be re-paid, Citi bet against them.

The investors lost $700 MILLION.

Citi earned $160 MILLION. (Good to be 'in' on it!)

In exchange for this blatant disregard of both ethics and rules, the SEC was going to charge Citi with negligence and fine them $285 MILLION.

Negligence... Well, I guess they should've tried harder to not screw their own customers over.

Luckily, this plea deal from the Executive had to be checked over by the Judicial. And, apparently, Citi was unable to bri*ahem* lobby Federal Judge Jed "Not on My Watch" Rakoff into seeing this as a fair and reasonable punishment for a billion dollar scandal.

(Think maybe the fine was fair? Let me take a shot at illustrating this. When a man is arrested with a kilo of heroin, they don't just take 250 grams of it and tell him he is a *bad* man, that he should have a nice day, and if he is ever in need of a job he's always welcome at the station. No. They take ALL the heroin, everything the guy owns and throws him in jail for at least a significant portion of his life.)

Judge Rakoff decided he thought maybe a closer look was necessary. He said:
"The court concludes, regretfully, that the proposed Consent Judgment is neither fair, nor reasonable, nor adequate, nor in the public interest"
"Although this [settlement] would appear to be tantamount to an allegation of knowing and fraudulent intent... the SEC, for reasons of its own, chose to charge Citigroup only with negligence"

Now THAT is some good solid judgin'...

THIS is whyipaytaxes.
read more:Citigroup-SEC $285m toxic mortgage deal rejected(bbc)

Of the people, but not for the people

This is it, folks... We've lost control of our government.

You guys will remember this little thing we liked to call the TARP, right? Everybody got their britches in a bundle over the "unprecedented" amount of $700 BILLION to be loaned to Wall Street to ostensibly avoid worldwide economic collapse.. Nobody liked it, but at that time, Bush was the lamest of ducks with at least one foot out the door and something [supposedly] HAD to be done.

That the economy eventually collapsed in every realistic and measurable way is irrelevant, but I certainly had to bring it up.

Notice my use of the quotes around "unprecedented" in the paragraph above. I use these quotes because there was plenty of precedence. In fact, the very same banks we bailed out were already into us for a LOT more than $700 BILLION at that time!

Prior to the TARP, the Fed had already made loans to the banks at a total cost that amounted to $7.77 TRILLION! In your face, puny little $700 BILLION.

Bullet points. Too frustrated to make paragraphs:

Magnitude

• $7.7 TRILLION is more than half the value of everything our country produced that year
• Our 6 largest banks turned their share into $13 BILLION in profit
• Morgan Stanley alone borrowed enough ($107 BILLION) to pay off a tenth of nation's delinquent mortgages
• Bank of America took $91.4 BILLION of these secret loans while simultaneously taking $45 BILLION from the TARP funds
• Banks that were declared too big to fail grew even larger
  
• Our largest banks enjoyed more profits in the last 2.5 years than they did in the 8 years preceding the crisis
• All the while, they continue to spend MILLIONS lobbying to derail or weaken laws designed to keep them in check
  

Transparency

• The loans to the banks were undisclosed
  
• The profits earned by the banks were undisclosed
• Shareholders, the "owners" of the banks were not told (Where did the profits go?!?)
  
• Taxpayers, the people that have given the authority to the Fed to watch over our money were not told
• Congress, which was actively writing an overhaul to our financial regulatory system was not told
• These loans were provided with no protections or guarantees for the taxpayers
  

THEY LOANED OUR MONEY VALUED AT MORE THAN HALF OF EVERYTHING OUR COUNTRY CAN MAKE IN A YEAR TO PRIVATE COMPANIES WITHOUT EVER TELLING ANYONE! The Fed knew, the Bank Managers knew. Not even the owners of the banks knew!

THIS is whyipaytaxes.
read more:Wall Street Banks Earned Billions In Profits Off $7.7 Trillion In Secret Fed Loans Made During The Financial Crisis(tp)

It ain't tricklin' down folks!

According to the Congressional Budget Office, since 1979:
After-tax income increased by 275% for the wealthiest 1% of Americans
After-tax income increased by 18% for the poorest 20%

in 2005-2007, right before the Great Recession, the top 20% of the population earned more after-tax income than the entire bottom 80%...

The obvious case that some will make in light of these statistics is that they deserve it. They work harder, they make the right decisions.
Am I to believe that I am that much lazier and that much more ignorant?It feels like I work really hard every day; I'm certainly very tired at the end of a day...
I certainly don't see a 275% increase in my after-tax income ANYtime soon.

Maybe the wealth isn't trickling back down after all...

Don't get me wrong... I don't feel entitled to an increase in my income. If you think about it on a world wide scale, I live a pretty fantastic life full of wonderful toys and comforts beyond the wildest dreams of billions of people.

What drives me nuts is that a vast amount of the 'wealth' in this country has been pooled among 1% of Americans and they have turned our elections into a war of campaign donations while appointing themselves to positions of power so they can use tax payer's money to 'bail' each other 'out.'

They've even stopped paying a reasonable amount of taxes. Again, don't get me wrong, I'm a staunch opponent of high taxes for everyone and loathe big governments.

Alas, we all have to pay our share of taxes to keep the system going. It wasn't until GE paid absolutely $0 (ZERO) in taxes on $5.1 BILLION in profits in 2010 that I realized maybe, just maybe, not everyone was paying their share of taxes.

The statistics from our own government:
http://www.cbo.gov/ftpdocs/124xx/doc12485/10-25-HouseholdIncome.pdf

Thain to destroy CIT next

If you're anything like me, you'll suddenly discover that a thin layer of slime has covered you while reading this story: Former Merrill Lynch boss appointed CIT chief (bbc)

I'm not going to spend much time explaining why John 'How About Some Bonuses!' Thain costs taxpayer dollars. I already have. (twice)

But I will say this: He's gonna fit right in at CIT. These people know a thing or two about making taxpayer money disappear. Literally.

THIS is whyipaytaxes.

It should be mentioned that they are paying this man $6 MILLION a year. Some of that pay is in delayed stock but I'm not sure that is an appropriate amount to pay someone whose previous position was at the helm of a company he drove into the ground while lying to the shareholders in order to ensure BILLIONS of dollars in bonuses for him and his cronies.

So long and thanks for all the cash

With the collapse of CIT was the elimination of any hope of getting the $2.3 BILLION taxpayers gave to them under Dubya's TARP fund.

You kinda gotta wonder where all that cash went... I mean, I know you're not supposed to. Its easier if you just don't think about it and try to forget it while wondering what team Brett Farve is playing for this week.

But... You kinda gotta think about it... That's a lot of money to give to someone who 3 months later comes to you and says paying you back just isn't gonna work out for him anymore.

Maybe we should be breaking some knees...

THIS is whyipaytaxes.

Fine

Bank of America gets $25 BILLION from taxpayers to facilitate the purchase of Merrill Lynch.

In spite of promising its shareholder it wouldn't, BOA summarily gave $3.6 BILLION of it to the management team at Merrill, apparently for the real bang up job they did driving it out of business.

Now, rather than letting the investigation of this douchebaggery unfold, BOA is settling with the government for $33 MILLION.

Not bad. $33 MILLION to cover up a $3.6 BILLION dollar scam. Not bad at all.

THIS is whyipaytaxes.

read more: Bonus fine for Bank of America(bbc)

Conflicts of cozy interests

Am I the only one uncomfortable with the White House Chief of Staff sitting in on JPMorgan Chase's board meetings?

In an era where our federal government is handing out taxpayer dollars to private entities, picking and choosing which banks should fail and which banks will succeed, it seems wrong to have government officials at the highest levels getting so cozy with one particular bank. I'll bet that CIT wouldn't be forced into bankruptcy if they too had the opportunity to have the President's right hand man over for a visit...

I would guess this: Investing in JPM stocks is probably a pretty safe bet over the long term, 'cause they are apparently going to continue to get what they ask for...

THIS is whyipaytaxes.

read more: In Washington, One Bank Chief Still Holds Sway(nyt)

In spite of being Taken care of

This is an addendum to the post directly following (preceding, chronologically) the next post. Read that one first, then segue into this one:

Oh, and the banks, with their near record profits this quarter STILL aren't lending money, WHICH IS THE ENTIRE REASON WE GAVE THEM BAILOUTS IN THE FIRST PLACE!
quote from linked article below (tbm)(EA):
Underscoring the need for big banks to restart lending is the saga of CIT. The ailing specialty lender needs $2 billion to $3 billion in short-term financing, according to Fortune, and is seeking loans from JPMorgan Chase and Goldman Sachs. The deal could involve a piece of the company. "The New York Post reported Friday that JPMorgan Chase could acquire CIT's factoring unit, which finances more than $50 billion of wholesale inventory, at a time of the year when the collapse of the lender could disrupt retailers' holiday plans," says Fortune. One Alabama hardware company is already blaming CIT for its bankruptcy, writes Bloomberg, which also reports that [CIT] CEO Jeffrey Peek stands to earn $14.7 million, ahead of any repayment to the government of the $2.33 billion in TARP funds, should a bankruptcy or buyout occur.
JPM and GS, In spite of announcing near record profits last week, won't loan enough money to keep it and our retailers that count on it for purchasing goods to stock their shelves for the holiday season UNLESS THEY GET A PIECE OF OWNERSHIP. If the fact that thousands of small businesses will be forced to close due to their lines of credit disappearing meant nothing to the Obama administration when considering whether or not to bail out CIT, it sure isn't going to matter to JPM or GS.
This is EVEN THOUGH WE GAVE JPM AND GS BILLIONS OF DOLLARS WITHOUT A DROP OF OWNERSHIP.

Man... I am getting pissed! I knew it was going to be hard to watch this unfold back when the government started handing out our money to private firms late last year, but this is getting painful to watch...

AND: Why the hell does yet another CEO that successfully drove the business he was in charge of into the ground, to the point of begging for handouts to survive, gets MILLIONS OF DOLLARS in bonuses?

THIS is whyipaytaxes.

Taken care of (part 2)

Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase had second-quarter profits totaling $13.6 billion.

Larry 'Cocks=Brains' Summers: [the profits were made possible by] ‘the extraordinary public support provided by the federal government.'
Between the lines: I gave all your tax money to my buddies, suckers!

THIS is whyipaytaxes.

read more: These Bank Profits Made Possible by Taxpayers Like You (tbm)

AIG

Here's an idea everyone:
The next time you have a creditor on the phone demanding payment of the money you owe... Ask them if its ok to treat yourself first.
Hell, even if you're not being harassed, but simply debating whether you should pay off money you owe or just buy yourself something nice...
Either way, go with giving yourself a bonus and forgoing your responsibility.

Why not? If it works for AIG, it can work for you!
Over the next few months, AIG intends to hand out $238 MILLION in retention bonuses. Gotta retain that talent! After all, their talented employees managed to bring the world's economy to its knees and the company was handsomely rewarded with $180 BILLION.

Did I say rewarded? I meant bailed out. And there is NO need to pay it back anytime soon. Not when we have hungry executives to reward!

THIS is whyipaytaxes.

read more: found in CW in Newsweek. Just Google 'AIG Bonuses' and click on the news results...

Taken care of

Its nice to be favored by the government. A government that will one day, allow your biggest competitor go out of business and the next, bailout a firm that owes you money.

For, without our bailouts, without our help, and with the elimination of its competition, how else would it have been possible for Goldman Sachs to pay $6.65 BILLION in pay & bonuses THIS QUARTER (an average of $226,000 per employee FOR ONE 3 MONTH PERIOD!)?

Boasting profits for the quarter of $3.44 BILLION, I can see clearly now that our government was right. These poor poor bastards really needed our help...

THIS is whyipaytaxes.

read more: Goldman Sachs sees bumper profit(bbc)

Goldman Sachs

As Matt Taibbi runs through the evidence and coincidence of the apparent fact that Goldman Sachs has been at the forefront to profit from every bubble that has burst since the 20s he writes this paragraph (EA):

The history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates. By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibillion-dollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in golden-parachute payments as his bank was self-destructing. There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailed-out insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman.

With so many people in positions of financial power having come through the rites of passage known as a job at Goldman Sachs, its hard to believe that its not just a big 'Good Ol' Boys' club. What better way to ensure free government handouts by putting your buddies in charge of the government?

THIS is whyipaytaxes.

read more: Matt Taibbi has long since entered my conscience as a potential Hunter Thompson of our time. Read the excerpted story from Rolling Stone.
The Great American Bubble Machine(rs)

Some more quotes, please read to see more evidence of a required career at Goldman to get a position of any power:

(One thing that has been noticed by just about everyone but the MSM)
Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers — one of Goldman's last real competitors — collapse without intervention. [...] The very next day, Paulson greenlighted a massive, $85 billion bailout of AIG, which promptly turned around and repaid $13 billion it owed to Goldman. Thanks to the rescue effort, the bank ended up getting paid in full for its bad bets

a $700 billion plan called the Troubled Asset Relief Program, and put a heretofore unknown 35-year-old Goldman banker named Neel Kashkari in charge of administering the funds
In order to qualify for bailout monies, Goldman announced that it would convert from an investment bank to a bank-holding company, a move that allows it access not only to $10 billion in TARP funds, but to a whole galaxy of less conspicuous, publicly backed funding — most notably, lending from the discount window of the Federal Reserve. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs — and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret.
Converting to a bank-holding company has other benefits as well: Goldman's primary supervisor is now the New York Fed, whose chairman at the time of its announcement was Stephen Friedman, a former co-chairman of Goldman Sachs

the man now in charge of supervising Goldman — New York Fed president William Dudley — is yet another former Goldmanite.

Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs

Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites.

The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Bailin' out the lawyers

Lets buy the line that the TARP and other bailouts had to happen or calamity would have ensued. (A calamity that would have leveled the playing fields a bit. A calamity that would have potentially brought many of the super-rich down to our levels. A calamity that would have voided their inherent superiority and MUST NOT BE.) Ok. So we buy that line. Bad things would happen if we didn't start pouring money from everyone's pocket into a handful of fat cat's pockets.

Having agreed to the necessity of giving rich people access to our co-op (tax pool) funds, we would like to assume that the money is used to make right the wrongs. To fix this problem that leaves us on the verge of a calamity. Instead, like a bum that takes your $5 to buy a bottle of booze instead of the sandwich they said they would buy, the banks are making relatively few changes. Sure, they're making it harder for us to borrow that money we gave them, but they are also sure to honor bond insurance claims on questionable funds that have already been bailed out.

Now they've found a new way to spend our money for us: Lawsuits! Somebody has got to be blamed for the financial meltdown and by God, we're going to use our lawyers to find out who it was. Ambac is suing JP Morgan. MBIA is suing Merrill Lynch. The shareholders at Citi Group ARE SUING THEIR OWN MANAGEMENT TEAM! (Apparently, those who bought into Citi within the last handful of years think they overpaid for their [obviously] worthless stocks and should be reimbursed by someone... Did NO ONE understand the word risk? Don't people know that if you invest in a company on the stock market, there is no guarantee of success? You could lose everything. And if that happens, no one is supposed to come along and give you your lost money back?)

At any rate. A significant portion of our bailout funds is now funding a giant mass of lawyers to sue each other. We'll be paying the prosecutors, defenders, court costs, awards, and settlements with the mountains of bailout funs we've given them to play with.

THIS is whyipaytaxes.

Moral hazards (Picking winners, choosing losers pt 4)

The CIT Group needs our help.
Being one of those companies that were allowed to change their status from a financial institution to a banking company in December to get their share of the TARP funds, CIT Group was awarded $2.33 BILLION. Which they've decided isn't enough and they must be given more.
'Cause, you know... If CIT Group fails, the world's economy will follow.
Right? That's still the official line, right?

Now lets flip that coin over.

The government may choose not to honor CGs request for another BILLION dollars. As a major lender to small and mid sized businesses, they don't have access to the lobbying teams the mega banks do, nor do they have conveniently placed ex-executives in the new government.
So, in spite of the Hundreds of BILLIONS of dollars given to AIG for backing up big name banks with their 'friends with benefits [in government]', our government now debates letting CIT Group go into bankruptcy over $1 BILLION. Because hey... Who needs small and mid sized businesses anyway?

Giving some banks free access to the Fed's printing press while busting chops over other banks seeking to grab up the money the others couldn't fit into their pockets on the way out...
Giving taxpayer dollars to anyone willing to call themselves a bank...

THIS is whyipaytaxes.

SEC

Drew Sheneman

The Fed

Why, oh why did Eliot Spitzer have to go and get himself busted for whoring around? We need critical thinkers on the front lines, not disgraced out of public office.... *sigh*
He questions the power of the Fed and why they are asking for more and why Obama wants to give it to them in a new Slate article.

Some great questions he wishes would be asked (EA):
Where is the legal analysis showing the Fed had no power or insufficient power to intervene to save Lehman Bros.—widely viewed as the failure that precipitated the credit crisis—as it has claimed repeatedly, yet had sufficient power to orchestrate the gift of Bear Stearns assets to JPMorgan Chase? How did it differentiate between the two?

Did the Fed do any analysis of the risk that would result from AIG's potential default, and how did the Fed analyze the risk to each of AIG's counterparties?

When the Fed authorized the first $80 billion payment to AIG, almost all of which flowed directly through to counterparties, why did the Fed not arrange for taxpayers to get equity in the counterparties, rather than the essentially worthless AIG equity? What communications did the Fed have with the counterparties over this period?

What analysis had the Fed done of the general leverage ratios in the financial-services sector and the need for additional capitalization? Had it done any "stress tests" during this period, or did it believe that there would never be an economic downturn?

Since the N.Y. Fed is controlled by the very institutions that were at the heart of the meltdown, and these institutions used the Fed to give themselves hundreds of billions of taxpayer dollars to resuscitate their balance sheets without any public scrutiny, will the Fed release any conflict-of-interest rules it has in place to assure the public that board members do not act on policies that will affect their own corporate interests?

Six of the nine members of the N.Y. Fed board are supposed to be "public" representatives, yet these individuals have all too often been CEOs of major corporations or financial entities. How does the Fed define "public" board members, and what is the process by which those board members are selected?

The Fed itself states that "the safety, soundness and vitality of our economic system" is its responsibility. How exactly are these terms measured? By GDP growth? Bank profits? Job growth? Growth of median household income? Without knowing how it will measure success, how can we measure whether the Fed is succeeding or failing?

How does the Fed believe it can regulate "systemic risk" meaningfully if institutions remain "too big to fail," necessitating that the federal government be an insurer of their risk in any serious downturn?

Has any thought been given to refocusing on a financial services model that has more smaller institutions and fewer mega banks, thus diversifying risk?

Leaving the reins in the hands of those who fucked us in the first place...

THIS is whyipaytaxes.

Who Knew? (Part 4)

Peter Schiff, That's who. (wikip.)
I am half-assedly posting about articles I've seen that point out those anointed few who not only saw, to some extent, financial collapse coming, but had the balls to try and fight it publicly, up front. See also, part 1 (Iris Mack), part 2 (Byron Dorgan), part 3 (Elizabeth Warren))Please comment to this or any Who Knew? post when you see one of those who were willing to stake their reputation by pointing out our crash course with economic crisis in times where everyone else let the good times roll.

So, why haven't you heard of this genius yet?
Because, silly, he hasn't made me any money yet!
(aka: Because, silly, he still thinks its going to get worse!)

He saw it coming and took every chance he had to publicly debate the collapse of our credit and housing markets. This includes a book with his prediction in the title: Crash Proof: How to Profit From the Coming Economic Collapse which was released in 2007.
In many of the public forums he used to try to get his message across, he was literally laughed at, or at least smirked at in epic proportions of condescension. (Epic, because he was right and he was right on a big thing (right, Ben Stein?)

It would be best if you watched a 'victory lap' video made by a fan: (there are plenty of other videos to watch too!)
http://www.youtube.com/watch?v=2I0QN-FYkpw

Despite his predictions throughout 2006 and 2007 of the upcoming economic collapse and the fact that he stood his ground because he knew he was right, he is generally not lauded as the economic seer he is. You would expect people to cling to his every word, to make notes of every gesture, to analyze his every thought after being right about the coming crash.

But, as it turns out, all of his short term investment picks since the economic collapse have been wrong. Now, he only gets speaking engagements outside of the U.S. The only press he gets include headlines of his losses since the collapse.What good is seeing the future if you can't make any money off of the predictions?
Additionally, he is still generally lauded with smirks and rolled eyes as he continues to predict a worsening economy, pointing out that we are only bailing out a part of the deck in a house of cards.

After writing that paragraph, I see that he isn't necessarily a genius... He's just unwilling to ignore the evidence and refuses to assume that endless growth is possible. Not exactly groundbreaking news...

Mad props to his father, Irwin Schiff, who decided in the 1970s that federal income tax was unconstitutional and stopped paying them. (He still pays his state taxes...) His belief in this is so strong that he has been in and out of court and jail fighting for his rights ever since. Today, at 90, he sits in jail again.

Ignoring a sage for being a sage...

THIS is whyipaytaxes.

Read more: I found Mr. Schiff in an article painting him out to be an Extremist in the June 1 Time. Go find it yourself if you must, I'm not going to link to it from here...

Beauty rest

If you've read much of this blog at all, you have probably realized I have a beef with Larry 'Superiority comes with the penis' Summers. Not only did he encourage the economic failures of our time but he was then awarded with a position that put him in charge of the economy in the White House. Which is good, the poor downtrodden banks really need a representative at the highest levels of government to be sure their voices are heard.

I don't know if you've heard, but there is a bit of an economic situation going on out there. Something about catastrophe, meltdown, chaos... Someone should wake up Larry and see what he thinks...In case you think maybe the camera caught him in a long slumped over blink, here's another shot. A little closer up.
I don't know. Maybe he was blinking again.

I know one thing for sure, if I was in charge of the White House policy on the worlds largest economy, I think I could at least fucking stay awake at a damn press conference in front of the whole damn world!

*sigh* Larry, Larry, Larry...
When will you ever tire of displaying your ineptitude?

THIS is whyipaytaxes.

Who Knew? (Part 3)

Elizabeth Warren, thats who. (tbm)
I am half-assedly posting about articles I've seen that point out those annointed few who not only saw, to some extent, financial collapse coming, but had the balls to try and fight it publicly, up front. See also, part 1 (Iris Mack), part 2 (Byron Dorgan))Please comment to this or any Who Knew? post when you see one of our 'Almost Heroes, if the system wasn't built to keep those in charge, in charge.

Starting in 2003, Elizabeth 'Save the banks heck, Save the people!' Warren was tasked with figuring out why the bankruptcy rates were higher in these 'prosperous' times than they were during the Great Depression. Of course, the banks stonewalled her efforts, so she turned to federal household surveys and determined that in order to be 'successful' the average American family is forced to borrow from the banks. Raising children, taking care of your health, and putting a roof over the heads of your family have become impossible without delving into the unregulated and generally unfriendly whims of the banks.

In 2005, when our government decided that they would rather bail out banks than the citizens, she fought the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. James Sensenbrenner and a host of other congressmen, whose mission it is to 'represent' the people, decided and announced that the people they 'represent' were gaming the system. Due to our moral flaws, we went out of our ways to run up mountains of debt with the sly plan to file for bankruptcy to avoid paying off their debts.
A year after she was laughed out of the congressional hearings on bankruptcy, she introduced the idea of a 'run on the consumer'. This beautiful phrase describes how one late payment can send any one of us on a downward spiral which destroys our fragile financial eco-system. Miss a payment, your interest rates get hiked. Your credit score drops. Credit becomes more expensive. Banks on a whim can increase your rates further, cut your credit, etc. etc.
(Summary: Yes, bankruptcies have skyrocketed, though not because Americans lack the moral fiber to pay off their debts. Its because we have become so dependent on the banks that when one loses a job that one now goes into default on a home, a car, and all of the other things they needed to take loans out for to enjoy their standard of living. Lose your job in the 1930's you have to sell your car. Lose your job in the 90's and you can't afford to keep paying on your car. With this in mind, our government chose to fix the scenario for the banks while turning their backs on the people. It was easier than reforming a system running out of control...)
(read this wonderful report written in part by Elizabeth Warren, its worth your time to read such gems:
Subprime lenders have learned that when inflation is low, lending out at 18%, 22%, or 34% can be extraordinarily profitable even if a substantial portion of borrowers ultimately default on their loans. The math is nothing short of stunning. At a time when the wholesale cost of money is 4%, for example, a subprime lender who places a $10,000 loan at 26% has by year four earned back everything the debtor borrowed plus more than $7000 in profit, and the borrower still owes more than half of the loan)

Then in 2008, instead of those gaming the bankruptcy system, now its us 'whiners' who have been gaming the sub prime system. So, once again, we turn to the bankers in charge to fix things by giving billions upon billions upon billions of dollars to the banks to help save them from us evil doers. With former bank heads and employees like Hank Paulson, Timmy Geithner, Larry Summers, etc. etc. in charge, they used vauge threats of worldwide economic collapse to ensure they and their buddies were safe. Much like the christians use hell to make sure there is a steady stream of income from their fearful worshippers. As we all can tell and be thankful for, the economic collapse they warned us of has been averted and everything is smooth sailing. Or was it their ridiculous TARP billions of taxpayer's dollars going straight into the richest of pockets that caused our collapse?

Thanks for seeing it coming and doing your best to keep them honest. Too bad Obama seeks to continue the obviously failed Bush policies of giving wall street whatever they want...
(She is in charge of the TARP now. But Timmy Geithner doesn't return her calls and she is generally ignored. Which is only right, after all, she seeks represent the people, not the banks.)

Bailing out the victims of my excess...

THIS is whyipaytaxes.

But we're getting it back, right?

I audibly gasped when the gravity of the following passage slowly sunk in and I began to understand.
My summary first:
I thought: We put up $700 BILLION in TARP bailout funds to help prevent worldwide economic collapse. While I'd rather let it collapse and start anew, its not up to me.
What happened: We gave banks and insurance companies a $700 BILLION credit card with no expiration date on it. Yes, Wall Street can only borrow $700 BILLION at a time!
I thought: But that's ok. Hell, rumor has it these are technically wise investments and the taxpayers will earn a bunch of money to help offset the costs of borrowing from China to loan it out in the middle of an economic crisis.
What happened: The IRS takes the payments as though they are regular general funds.
Instead of taking the money that is given back by the banks and insurance companies and giving it back to the Chinese we borrowed it from, we're spending it as the bureaucracy sees fit, including more bailouts .

To quote Clusterstock as quoted by Marketplace:
You see, returned TARP funds become part of the general revenue of the federal government. The money is treated just like money paid by taxpayers. It simply becomes part of the income of the government that will be spent by politicians and bureaucrats. There’s no lockbox or segregated fund. It works just like Social Security taxes: the income just gets spent for whatever the government decides to spent money on.

Right now about $134.5 billion remains out of the original $700 billion. When Goldman repays the its $10 billion TARP funding, that amount will grow to $144.5 billion.

THIS is whyipaytaxes.