We are in the midst of a financial meltdown. We’re talking about using almost a trillion dollars of taxpayer money to bailout the markets – on top of the quarter trillion dollars which have already been infused into our economy in the way of bailouts.
We are watching and waiting to see if some plan can be developed to loosen credit markets – needed to help the continuance of many small businesses and farmers, provide any confidence in our markets – those markets where many retirement plans are heavily invested, provide assistance to people who are trying to hold on to their homes, all while not screwing the American taxpayers for future generations.
Let’s take a walk down memory lane and look at some of the financial disasters, policies and incompetence by the Republicans in the last eight years.
A CBS report, from 2002:
Just last week President Bush announced, “my 2003 budget calls for more than $48 billion in new defense spending.”
More money for the Pentagon, CBS News Correspondent Vince Gonzales reports, while its own auditors admit the military cannot account for 25 percent of what it spends.
“According to some estimates we cannot track $2.3 trillion in transactions,” Rumsfeld admitted.
$2.3 trillion — that’s $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.
“We know it’s gone. But we don’t know what they spent it on,” said Jim Minnery, Defense Finance and Accounting Service.
And then we have this. CNN reports, from 2005:
Nearly $9 billion of money spent on Iraqi reconstruction is unaccounted for because of inefficiencies and bad management, according to a watchdog report published Sunday.
An inspector general’s report said the U.S.-led administration that ran Iraq until June 2004 is unable to account for the funds.
“Severe inefficiencies and poor management” by the Coalition Provisional Authority has left auditors with no guarantee the money was properly used,” the report said.
But there’s more.
Then there is the Government Accounting Office’s report, from December 2006, titled HURRICANES KATRINA AND RITA DISASTER RELIEF, Continued Findings of Fraud, Waste, and Abuse. This report addresses another example of mismanagement in Bush agency.
FEMA continued to lose tens of millions of dollars through potentially improper and/or fraudulent payments from both hurricanes Katrina and Rita. These payments include $17 million in rental assistance paid to individuals to whom FEMA had already provided free housing through trailers or apartments. In one case, FEMA provided free housing to 10 individuals in apartments in Plano, Texas, while at the same time it sent these individuals $46,000 to cover out-of-pocket housing expenses. In addition, several of these individuals certified to FEMA that they needed rental assistance.
FEMA made nearly $20 million in duplicate payments to thousands of individuals who claimed damages to the same property from both hurricanes Katrina and Rita. FEMA also made millions in potentially improper and/or fraudulent payments to nonqualified aliens who were not eligible for IHP. For example, FEMA paid at least $3 million to more than 500 ineligible foreign students at four universities in the affected areas. This amount likely understates the total payments to ineligible foreign students because it does not cover all colleges and universities in the area. FEMA also provided potentially improper and/or fraudulent IHP assistance to other ineligible non-U.S. residents, despite having documentation indicating their ineligibility.
Finally, FEMA’s difficulties in identifying and collecting improper payments further emphasized the importance of implementing an effective fraud, waste, and abuse prevention system. For example, GAO previously estimated improper and potentially fraudulent payments related to the IHP application process to be $1 billion through February 2006. As of November 2006, FEMA identified about $290 million in improper payments and collected about $7 million.
And from an August 2006 study about the Katrina disaster:
Contracting Oversight: An August 2006 Congressional report found that $8.75 billion worth of contracts for hurricane relief and recovery—some of them no-bid contracts that went to out-of-state and politically connected corporations—were tainted by overcharges, wasteful spending or mismanagement. FEMA must overhaul its contracting practices to expand opportunities for smaller local businesses and to prevent waste, and Congress must heighten oversight of contracting and disaster spending.
And what about the 190,000 taxpayer funded weapons missing in Iraq? Or that we sent $700 billion dollars IN CASH to Iraq? How many supplemental funding bills were needed for the Iraq disaster – above and beyond what had already budgeted for – after our Mission was Accomplished?
We have now bailed out:
- AIG – estimated $85,000,000,000
- Fannie Mae and Freedie Mac – estimated $200,000,000,000 (possibly as much as half a trillion dollars)
- Bear Sterns – estimated $30,000,000,000
To what end? Are the markets any more stable after these bailouts?
We were long warned of this impending disaster. Elliot Spitzer, who got into sexual trouble by using a prostitute, was politically assassinated because he was looking into the financial wrong doings of Wall Street. (Watch this video)
Spitzer wrote the following in February 2008, just two months before the FBI announced its investigation into his personal wrongdoings – another unprecedented event:
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. (Read the whole article)
And now this government, a government who has a history of mismanagement, corruption and ineptitude, wants a blank check of almost one trillion dollars – a number that was apparently pulled out of thin air since no one can reconcile that number, even the Treasury – with no oversight whatsoever. From Forbes:
In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy.
“It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
Nor has the Treasury given any reasonable assurance of their confidence in this plan. They simply do not know.
But significant skepticism confronts the initiative. Under a proposal circulating Saturday, the Treasury could spend as much as $700 billion to buy mortgage-linked investments, then sell what it can as it works out the messy details of the loans. But no one really knows what this cosmically complex web of finance will be worth, making the final price tag for the taxpayer unknowable. One may just as well try to predict the weather three years from Tuesday. (Source)
An array of economists have derided the plan. It is up in the air in Congress. Does the United States face the fate of Japan in the 90’s with years of stagflation? How many more jobs will be lost with the unavailability of credit to business? How many more people will lose their homes and their retirement?
We must remember the past of what was lost and mismanaged. We must remember how we got into this situation – with deregulation and lowering taxes during a time of war, something that had never been done in history. This disaster rests solely on the shoulders of the Republicans who feel that what is needed now is more deregulation and again lowering of taxes.
We must remember who it was that led this country over the financial cliff. Who created the mandate for sub-prime lending? Republican George W. Bush. Who deregulated the financial industry? Republican Phil Gramm. Who is Phil Gramm? The person shaped John McCain’s economic policy.
Honestly, is there an ounce common sense combined between all of these Republicans – including the man running for the highest office in the land? We cannot afford four more years of failed Bush – and Republican policy. Trickle down economics (also known as Reaganomics, once called Voodoo economics by George H.W. Bush) does not work for the masses. It works for the few.
And we are now seeing the results of what happens when the few get everything at the expense of the masses.
One final history lesson. What caused the Great Depression? Right, A REPUBLICAN who deregulated, lowered taxes, and trickle down policies.
Herbert Hoover, Republican president, Oct. 25, 1929,
“The fundamental business of the country, that is the production and distribution of commodities, is on a sound and prosperous basis.”
John McCain, Republican presidential candidate, August 19, 2008,
“I think still — the fundamentals of our economy are strong.”
Let us learn from history.