Thursday, September 25, 2008


American taxpayers should be upset at the amount of Congress directed cash from any corporation, private interest or organization. Whether such financial injection is in support of new drugs, insurance, medical services, or guns, corporate donations to Congress or even to election campaigns should be illegal. Entities with agenda currying favor for their products or causes should be run out Washington. Fannie Mae and Freddie Mac did much worse.

Fannie Mae and Freddie Mac senior executives have been supplying cash to Congressmen including Obama. Why? Why would organizations that were established by the Federal Government in the first place, and which serve the government and the U.S. taxpayers, be “lobbying” congress? Why would these two entities extend the largess of bundles of cash, sundry benefits and late afternoon caviar and champagne to legislators? Why should they care what a few handfuls of Senators think or do? The answer lies in the shadows that underlie the reasons for the financial “surprise” of this past century.

No-one knew. This disaster caught all experts and manipulators on Wall Street, off-guard. NOT A CHANCE. Don’t believe it.

The executives and all senior management at Fannie Mae and Freddie Mac, as well as management at numerous other financial institutions knew exactly what they were doing. Pay-offs to Congress maintained “friends” in the Legislative branch so that there would be no questions, and no oversight of their activities. The abuse continued unabated while personal bank accounts filled up quickly before the ships sank.

Discussions of implementing strict regulations or guidelines is simply a vacuous derailing of attention from the challenge. The strange attempt to instill panic into the minds of all Americans may be a slight-of-hand endeavoring to hide something underlying the mess. THIRTY to ONE leverage was no way to run a railroad, but that isn't what needed hiding since everyone was doing it. Misrepresentations in the books was rampant. Risks were hidden to ensure the packaging, flipping and re-flipping of bundled loans, thereby maximizing fees and bonuses.

Why is no-one digging into the credit rating agencies whose AAA ratings applied to securities riddled with risky loans or worse, injected confidence in undeserving investment vehicles, and minimalized capital requirements for too many lenders.

While Congress agrees to a $700 billion backstop which will provide ample confidence to the markets, it should pick and chose which bailouts to fund as they occur. Otherwise, who will be the final arbiter of good taste as to which tattered financial packages will receive the beneficence from the bailout bucket? Paulson? The long list of reasons against that suggestion starts with conflict of interest and lack of objectivity. Who will make sure the banks running to the trough aren’t coming with only their worst garbage bags after cashing in the good stuff they’ve picked over? How will Price for the decayed assets be decided on behalf of the taxpayers? Will the folks who either led or cheered the parade as it headed to the cliff be reliable decision makers in the process? No blank check should be provided to anyone, least of all any so called experts who had more than passing interest in the creation of the mess. Lets remember the, “burn me once, shame on you, burn me twice, shame on me” caution sign.

The current Congress has shown little propensity for decisive leadership. Today it should not panic, and should not succumb to outrageous demands being made by those who had insufficient foresight to see the looming catastrophe that millions of others pointed to as inevitable. While implementing a solution, Congress should also demand answers to serious questions. Long prison sentences should await executives such as those running investment banks who broke laws, as well as those in Congress who received kickbacks to ignore the duplicitous activities. All cash, and assets accumulated with obscene bonuses extracted through cooked balance sheets should be handed to U.S. taxpayers on a silver platter.

Taxpayers should expect and demand diligence as well as responsibility from Congress, and a monumental blank check is neither diligent nor responsible.


  1. My dad, a man with just one semester of college, a blue-collar worker and proud parent that put five kids thru college, saw the Fannie/Freddie debacle coming three years ago. He told us then to get our finances in order since things were going to get tough. And he was very specific about why -- he understood lending practices and greed and could foresee the consequences.

    Glad I listened to him. But why-why-why -- if he could see it coming, the so-called economic experts didn't? Did the experts not have any indications? Did the experts fail to mention any indicators? Did the experts lie to us so that we could keep on churning out millions in fees and commissions for the very same experts?

    We've been had. And we can't do a damned thing about it. Now we're going to be had again -- by the experts and the financial saviors.

  2. Why don't we also hold homeowners who over-extended themselves hostage? This whole debacle wouldn't have been possible without greedy individuals trying to buy more house than they could afford. No one twisted thier arms, they chose to enter into an exploding ARM because we are a materialistic, selfish society built on credit. And yet no one even wants to return them to their original state, much less hold them even more culpable. Why don't we examine society as a whole instead of trying to shift blame, Democrat stlye, to the big bad corporate bully.

  3. If you have a person who is a typical yokel(you know who I'm talking about) yet can't name the Vice President,and on the other hand you have a slick banker and an even slicker realtor telling you that this McMansion you're about to buy will be worth double in 6 months....

    Who do you blame?