Comments on: Tarp Two: New deal or no deal? Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: B.Free Tue, 17 Feb 2009 15:10:30 +0000 Mr. Choi, thank you for bring that to my attention. I can see how you were misled by statement. I was not speaking of Mr. Smith’s gasoline expense for his daily round trip to work but the entire cost of transportation fuel doubled and in some cases tripled (diesel) causing everything Mr. Smith purchased to increase. Most product moves by truck in this nation and their biggest monthly cost is fuel. When diesel more than doubled it had a direct effect on the end product cost. This uncontrolled economic drain didn’t cause the housing industry bubble to burst. It just accelerated the foreclosure rate which fed the panic. I mention this because the current stimulus package has money for oil research and development and in my opinion this is not, in any way, needed. The oil companies have plenty of profit and they do not need any help from us.

At this point the priority regarding jobs is the do both; preserve jobs and create new jobs. Is it correct to save the current Auto industry or the Zombie banks? I do not believe so. I believe the money would be better spent on social safety nets and creation of new permanent jobs. As the Auto, and banking industry restructures (which would not take long) people would be re-employed and those that failed would not be rewarded. The Corporate Aristocracy would learn that they are not impervious to the economy and that their actions have consequences that will reach into their bank accounts. Maybe the phoenix rising from the ashes of the Auto industry would be more responsive to the needs of the US people than to the oil companies. Maybe the banking industry would not push financial instruments that are only viable during upturns in the housing industry and turn toxic during downturns. Greed must be tempered with what is best for our society not just what is best for the Corporate Aristocracy that like terrorists shields themselves with the small investor and Ma and Pa retirements. Many in this nation have lost more than half of their retirements. Who will save them? Not one mention in the stimulus package. Not one dime for them. The little guy who believed in corporate USA, who invested his golden years and now must look at going back to work in an economy that has no jobs. Sorry, I think the billions spent on the banks and the auto industry could have helped more by helping these people and the people who lose their jobs. Putting money in the hands of the people is the only way this economy will get back on its feet. Consumers must consume in a capitalist economy. How long can you spend hundreds of billions to prop up an auto industry in an economy where the consumer is not spending? How many hundreds of billions will we give to a banking industry that is not lending?

By: Brian Choi Mon, 16 Feb 2009 21:18:46 +0000 I’m surprised to see some people with no understanding of bankruptcy. This is not the board game Monopoly and bankruptcy means losing. People including some ignorant Republican congressmen say the Big 3 in Detroit have failed so they should file for chapter 11. If they file chapter 11, they will restructure and survive. In fact, their executives probably will receive bonus. But it will devastate the creditors which includes the suppliers most of whom will go under. Most of tier 1 suppliers haven’t been paid for 3~6 months already. This will literally put millions of workers out of job which is not what we need.
Banks same thing. If they file for chapter 11, they will survive but it’ll hurt the creditors which includes individual investors and retirement funds. And FDIC can cover only so much. Bankruptcy law must be reworked.

By: Neil Sharpe Sat, 14 Feb 2009 12:48:05 +0000 The problem may be complex but the solution should be simple. Get rid of the poison. If you don`t get rid of the snake bite or get an antidote you will die. Last year Jim Rogers was asked a question. What should the world leaders do about the financial crisis? The answer was so simple but so honest. They should go to the bar and have a drink. The world has intervened so much that the problem has become much worse. The stimulus package, bad bank solution blah, blah, blah is not addressing any of the problems. We have to get rid of the poison from our system. Bankrupt banks have to be allowed to fail. Companies that cannot cope have to be helped by Chapter 11. Stop the intervention. Only then will we be able to return to business as usual in the whole world. Why do we want banks to lend money when this is what got us into this mess in the first place. Give us a break. Stop wasting outrageous amounts of money on meaningless projects before it`s too late.

By: Brian Choi Fri, 13 Feb 2009 21:01:44 +0000 Oil companies didn’t gouge the prices. Wall street gouged them by speculating on oil shortage and raising future oil price. And oil price certainly didn’t help but wasn’t that big of issue either. Average Americans drive 20 miles a day and if you drive a car that goes 20 miles per gallon, you’re spending 365 gallons of gasoline per year. That $1460 per year at $4 a gallon versus $730 per year at $2 a gallon. Difference of $730 per year or $60 per month. If extra spending of $60 a month put you in crisis, you were already in crisis.
Sub-prime mortgage and credit default swaps were where it all began and it now spread far beyond that.
At this point, priority is not to create jobs but retain jobs. Prevent more layoffs. And restoring confidence will be next step but all these negative articles are not helping in that department. Tax the religious groups? Heck, that’ll eliminate deficit in 4 years. And let’s face it, they’re not “non-profit”

By: B.Free Fri, 13 Feb 2009 18:45:08 +0000 The problem is very complex. Because the law allowed those that create the mortgage turn around and sell the instrument while slicing and dicing it up with other instruments it becomes very convoluted. Huge amounts of the mortgage assets are owned all or in part b foreign investors. This is why when the US housing bubble broke it sent the world into panic. Here is what happened.

The Oil industry gouged the world (mostly the US) economy for hundreds of billions of dollars siphoning off disposable income at the exact worst time, when the housing bubble was breaking. This caused the collapse to accelerate and the corporate aristocracy (CEOs and Board Members) began to panic. This led to the last administration and Congress to knee jerk a plan into action that dumped hundreds of billions into the financial sector to keep these institutions from going under and protecting the life styles of that corporate aristocracy. This was illustrated by how these institutions used the money. The corporate aristocracy didn’t loosen lending instead they bought up smaller institutions that were sinking and gave themselves bonuses in the process. These arrogant asses didn’t care about the industry for they felt that the industry was doomed anyway. As the last administration screamed the sky was falling the world shuddered. Banks private and public quaked under the weight of the collapse of these financial instruments. This in turn caused credit to dry up which in turn cause companies to miss payroll which in conjunction with consumer panic cause spending to dry up which is causing more business to fail due to lack of sales which causes more people to default on their mortgages. How ever now they are defaulting on solid 30 yr flat rate mortgages. What is the answer?

I believe we will have to stop the defaults by buying them and the government will have to restructure the loans so the people can afford to pay even if that means waiting for sometime in the future for the first payment is made after the individual gets a job. Of course the government better figure out how to make about 4 million real jobs by year end. To do this they will have to put a tunicate on the current economy to slow down the rate at which jobs are lost. To span the time until the private sector construction can get back on its feet the government will need to create about 1 million construction jobs across the nation. At least 2 million permanent jobs need to be created in new industries. Right now the best suggestions are in scientific R&D that has been neglected over the last 8 years and green industries (new power plants, alterative fuels, distributed power generation). Lastly 1 million new permanent jobs needs to be created in the public sectors. Under the Regan era the FBI’s financial crime branch was dissolved and to date has not been rebuilt sufficiently. Combine this with expanding old and creating new watchdog agencies; bringing back the systems series of positions; expanding the Boarder Patrol and Coast Guard and we could put a million people to work.

The next thing we need to do is slow the flow of jobs out of this country. I am not talking about protectionism. I am talking about putting tariffs on US companies that ship their manufacturing out of this country then think they can turn around and reap the benefits of selling those products in US markets. Put tariffs on their imports and make it unprofitable for them to manufacture outside the US. Give big breaks to foreign manufacturers that move their manufacturing to the US. In the long run this will bring permanent jobs to the US.

The next thing we need to do is slow the flow of money out of this country. Today Billions flow out of this country through one Black Market, the Illegal Drug Market. The War on Drugs has done nothing but waste even more billions in trying to stem the flow of drugs to this country or the billions of dollars out. We waste money on incarcerate offenders and we are incarcerating offenders at a rate that is swamping our public and private prison systems. It is time to stop this stupidity and decriminalize at the very least marijuana which makes up 80% of all illegal drugs used in this country. This would cut heavily into the flow of money out of this country and would financially hurt the thugs south of the boarder. Cocaine and opium may be another matter but other societies have decriminalized without a collapse of their society. If done properly, the US could lead the way with the EU following which would lead to large amounts of money staying right here in the US and not ending up in the hands of criminals or terrorists. This keeps more money in the system right here and creates jobs and credit. And for those of you who think an inanimate substance can create an addict you are incorrect. Addiction is a physical and psychological illness and should be treated as such. Alcohol does not create an alcoholic. The vast majority of people that partake of Alcohol are not alcoholics. Just like the vast number of people that use marijuana, cocaine and opium are not addicts. Treat addiction as the illness it is. Right now we are spending so much on the War on Drugs that if we applied that money to treatment it would pay for it many times over. We cannot afford that kind of waste any longer.

Lastly, with oil prices crashed with deep drops in demand, with drops in the demand for foreign recreational drugs, with advances in energy technology we could stop our involvement in the Middle East and bring our soldiers home and stop the flow of wealth into that money pit. With oil and drugs no longer funding the terrorists the Afghan and Iranian forces could handle the insurgents and our military presence would no longer be needed.

Ok, this is a very sketchy and high level overview of how I think this Administration and Congress should proceed and there is a lot of very complex work to get down these roads but it is necessary that we do and lead the rest of the world in doing the same. The last Administration and Congress blew that bubble up until it burst. That kind of growth is not natural nor can it be sustained and I think they knew it but were hoping it would not burst until they were out of office. Growth should be slow and steady. That is why it may take 8 to 10 years to get out of this.

Well folks that is my story and I am sticking to it. Have fun.

By: Brian Choi Fri, 13 Feb 2009 18:06:42 +0000 No, nationalization of banks are socialism. Not communism. And frankly, I do not see what is a big issue. France is socialism and it worked for them. Look how it turned around Renault. And what we have is not capitalism anyway.
We are clinging onto 200 year old ideals in 21st century. Socialism does not mean death of Democracy. One is economic system and the other is social. But again, don’t you think all these ideals… socialism, communism, and capitalism are outdated? Are these systems the best the humanity can come up with?

By: James Stroud Fri, 13 Feb 2009 09:32:41 +0000 While I concur with the prevailing sentiment that the irresponsible banks should fail, I disagree with how most suggest doing it. The problem is that we are teetering between two harsh realities. The first is collapse of the financial sector with outright failure of the banks. Both TARP plans will lead to that outcome. The second is almost as unthinkable: nationalization of the banks with most lending consolidated with the US government. AKA, communism. I don’t like either prospect, but I don’t see any other alternatives. Either way, we are about to see a massive restructuring of our political and economic environment towards a more socialist system. I’m not particularly warmed by the thought.

By: Elegia Thu, 12 Feb 2009 23:40:07 +0000 Wait, Fred…President Obama is ONE OF THOSE senators that GOT US INTO THIS MESS. You are contradicting yourself.

I believe that the current Congress and administration will have made such as mess of things by 2012 that we will, indeed, throw the bums out. But how do we avoid just appointing more bums? What happened to the concept of “statesman?”

American voters need to become educated on Congress’ financial failings, economic issues and look to other political options, such as the Libertarians, which support liberty in your lifestyle, Demo style, and Americans making their own financial decisions and retaining their earnings, Repub style.

By: Brad Wed, 11 Feb 2009 23:24:56 +0000 Capitalism at it’s worst

If a small business owner can not make a profit and it is unable to make it, what does it do ? It folds, loss taken. It should not be any different here. The goverment needs to stay out of it and let the private sector absorb everything.

If someone goes into a candy store and takes all the candy without paying for it, what happens ? The robber goes to jail. If the candy store owner did not pay his bills then what happens to the store owner ? He too should go to jail. The bottom line is banks and consumers are equally at fault so they both should suffer the consequences. The government is trying to play Lord and savior and to be honest, all it is doing is rewarding thugs.

By: RFL Wed, 11 Feb 2009 20:09:49 +0000 And I’m waiting to see Chris Dodd, Barney Frank, Franklin Raines, Angelo Mozillo, Richard Fuld and all of the other thieving liars and boobs in stripes…