Over the weekend, Congressman John Boehner (R-OH) said that congress needs to present a clean bill to bail out Wall Street – money only for Wall Street and nothing for Main Street:
Boehner suggested giving Treasury Secretary Paulson the “powers as quickly as possible.” “There are a lot of well-meaning, well-intentioned ideas out there, but they don’t need to be part of this package,” he said, referring to assistance for average working families.
Wall Street, which created this problem, along with Phil Gramm, who championed deregulation and sponsored the Gramm (R-TX)-Leach (R-IA)-Bliley (R-VA) act, also known as the Financial Modernization Act, which removed all of the safegards which were put in place after the Great Depression. These safegards were created to prevent another financial collapse, allowing banks to get into high-risk markets. These banks then bought up “securitized” mortgage instruments as investments. Unfortunately, because of the deregulation, nobody was paying attention to the quality of these mortgages which were banded together and sold in varying grades based on the risk of the mortgages (homeowners) in these instruments.
Often, sub-prime mortgages were included in what was supposed to be A grade instruments. People were given mortgages without proof of income. People without jobs obtained mortgages. People were pushed into taking low-introductory rate mortgages with very low rates (some at 3% or less) which then reset to higher annual percentage rates, some into double digits. The result? People lost their homes, neighbors of those homes foreclosed upon lost upwards of 20% of the value of their homes which then made those homes harder to sell, sometimes resulting in additional foreclosures not related to the problems listed above, and the financial markets were flooded with junk investment instruments. The end result; financial meltdown.
Wall Street says this bailout will shore up their bank accounts the financial markets.
As of right now, there is nothing in the current bailout bill on Capital Hill to help people who might be losing their houses or who have lost their jobs. We are unimportant. It is Wall Street that needs help. You know, those same people who walked away with millions and billions in bonuses over the last two years while they continued to allow this financial disaster to happen.
This clean bill which Boehner demanded has over the weekend, with the help of intense lobbying, been loaded up with additional bailout protection for FOREIGN financial institutions (Barclay -UK, and UBS – Switzerland). The New York Times reports:
Foreign banks, which were initially excluded from the plan, lobbied successfully over the weekend to be able to sell the toxic American mortgage debt owned by their American units to the Treasury, getting the same treatment as United States banks.
On Sunday, the Treasury secretary, Henry M. Paulson Jr., indicated in a series of appearances on morning talk shows that an original proposal introduced on Saturday had been widened. “It’s a distinction without a difference whether it’s a foreign or a U.S. one,” he said in an interview with Fox News.
Good to know. I am sure that the people thoughout this country will appreciate that the mega giant banking firms in other countries will be getting our taxpayer dollars.
But let’s make some connections here.
Phil Gramm, one of the primary masters of the financial deregulation act worked to deregulate the financial markets, then went to work for UBS as Vice Chairman and Washington lobbyist – a foreign financial firm, and earned between $1 and $2 million dollars from that firm, is now was instrumental in getting that same firm included in this taxpayer funded bailout.
Let’s run this down again for anyone who may have missed it:
- Boehner (Republican – OH)
- Gramm (Republican – TX), now lobbyist and Vice Chairman for UBS a Swiss firm. Also a McCain advisor and possibly the next Secretary of the Treasury.
- Leach (Republican – IA)
- Bliley (Republican – VA)
- UBS is now being included in a bailout with American worker tax dollars.
Not too much of an organization chart is needed here. I am sure it is all coincidental, though.
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