Yesterday I posted a happy positive message blog about our wonderful libraries and hoped to continue in that affirmative vain today, but events has caused me to resort to serious financial concerns impacting every single citizen of this great country.
In March of this year our government in their unique wisdom (pre-approval with $30 million support) urged the sale of Bear Stearns to JP Morgan. The Bear Stearns stockholders got the short end of the deal and the Wall Street community could be heard wiping their brows with relief. I’ll bet the CEO of Bear Stearns walked away with a ton of cash after leading his company to financial failure.
Several years ago, the federal government bailed out automaker Chrysler, but Chrysler paid back the money and the treasury actually came out of that deal with a positive return. I attribute that result to the then superior management team Chrysler had in place.
Yesterday, Treasury Secretary Henry Paulsen placed both Fannie Mae and Freddie Mac under federal control in an effort to prevent their complete financial collapse. The Office of the Comptroller of the Currency had classified shares of both companies as extremely low-risk investments, per the Washington Post. With this action the federal government will assume responsibility and supervision of these gigantic companies and hopefully maintain stability in the home mortgage industry. Numerous banks with significant exposure are thus protected. Supposedly in a few years it is the government plan to return these companies to private management and ownership. In the meantime, the American Taxpayer is holding the bag, and is subject to covering further losses.
Yesterday, in the September 5th edition of the Kiplinger Letter there is word that in 2009 the Big Three of the Automobile Industry will look for a government bailout to the tune of about $50 billion, which is $25 billion more than already approved. Political considerations indicate that our Congress will act favorably, because neither party wants to rock the boat as the election nears.
Last week a new magazine came into our home, a product of Conde Nast, called PORTFOLIO and there is a fascinating article by Daniel Golden about Countrywide’s CEO Angelo Mozilo in the August 2008 issue. This is an alarming article that reveals numerous special favors granted to influential government and business leaders by reducing interest rates or points on Countrywide mortgage deals. Without quoting the entire article, it reveals special rates for former UN Ambassador Richard Holbrooke, Franklin Raines the former CEO of Fannie Mae, William Esrey the former CEO of Sprint, North Dakota Democratic Senator Kent Conrad, Senator Christopher Dodd the Chairman of the Senate Banking Committee and James Johnson a former Fannie Mae chief (www.portfolio.com). When I read the article I needed a quick dose of Tums for the tummy.
The Associated Press last week reported that Congressman Charles Rangel of New York, Chairman of the House Ways and Means Committee, paid no interest on his Dominican Republic vacation beach house mortgage. Here is the man who is determining our tax obligations and he’s getting a deal that in my judgment is just plain suspicious. Read the article, because it is interesting. For some reason the link doesn’t work correctly, but Google Charles Rangel and you will find the information. How much do you want to bet that the House Ethics Committee won’t do a darn thing about this special conflict of interest? Where has the Senate or House Ethics Committees been on the numerous transgressions committed by their fellow politicians, such as Senator Larry Craig of Idaho? Clearly, the fix is in for fellow politicians.
The amount of money being talked about in this latest bail out is so large I cannot get my mind around the problem. Who is going to pay for these decisions? You and I know that it will be us, the US Taxpayers, not the politicians? We are talking about trillions of dollars and there is no end in sight to the obligations that are being mounted on top of constantly growing entitlement legislation. How can Obama and McCain prance across the country promising tax relief or tax reductions in the face of the facts and budget deficits?
Do our leaders think we are ignorant fools who believe anything that they tell us? Is it not time for someone to start telling the hard truth about the frightful financial situation confronting our country? The foreign governments must be laughing themselves crazy as they profit, when they see us destroying our financial foundations. Who are we to tell the world how to run their governments when we cannot act responsibility or ethically on our own turf?
I heard yesterday the two leaders of failing Freddie Mac and Fannie Mae are being removed and will each depart with $15 million severance checks. Why? They should go to jail for mismanagement? Why do we permit our government leaders to continue in office and not be accountable for their ethics or deeds? When will the American public wake up and realize what is going on, or do we just want to wait in hope the next earmark check will fall into our mail box?
Where is the accountability on the unethical lenders and borrowers who lied on their loan applications? Why is there no indication of prosecution against individuals who created the home loan debacle?
Fiscal Suicide prevails in all forms in our government (local, regional and nationally), and what are you going to do about it? Who is going to bail you out? The small businessman and the average Joe does not stand a chance for a bail out. Your Commander suggests that you do not hold your breath waiting for an answer. I find it difficult to look my children and grand-children in the eyes when you consider just what we are leaving them to address and resolve.