"Bail Out Main Street! Not Wall Street!"

Here's the "deal" Wall Street has gotten so far:

Executives lose their jobs.

Stockholders lose their money.

Depositors keep their money.

Bondholders get whatever is left.

Some employees keep their jobs.

The plan?

Buy troubled assets at or below fair value so depositors can withdraw cash today, then sell those assets at a profit when the market stabilizes.

Since many businesses rely on troubled banks for payroll, this is bailing out Main Street.

from CNN.com...

"[...] But those hoping for an end to golden parachutes - the large pay packages that top executives get when they leave a company - may end up disappointed.

The ability of Wall Street executives to continue to get large severance payments is one of the reasons Rep. Peter DeFazio, D-Ore., said he would oppose the bailout bill.

"The golden parachutes have been exchanged for camouflage parachutes," DeFazio said during floor debate Monday. "The execs on Wall Street will still get millions. Look at the loopholes there."

Under the bill, Wall Street executives who already have golden parachutes are likely to keep them even if their companies get government help.

"We're not abrogating contracts," said a Treasury official who briefed reporters Sunday.

Another Treasury official said that even future golden parachutes could be paid as long as they're triggered by the sale of a company and not by involuntary termination or corporate failure. [...]"

Just for starters.

Now the Congress has passed the revised plan, including millions of "tax breaks" mostly aimed at the upper middle class taxpayer (and tax breaks anyway do nothing for the very poor, who do not earn enuf to pay taxes in the first place).

At the same time a bill to extend jobless benefits to the increasing numbers of unemployed Americans passed the House but isn't expected to make it in the Senate.

Some priorities these guys have!

This is to say nothing of the increased risk of economic depression that some economists say results from the bailout (but not from not bailing them out). In any event, I think the point is not whether or not to do something about this crisis - it's *what* to do.

Warrior's discredited "trickle down" economics aside, prestigious economists have proposed a number of different plans with varying impact on the rich, upper middle class, and on the poor and working classes. Few of them address the basic problem, tho. I won't even go into the fundamental crime that is capitalism, which in reality has very little to do with "free" markets - for many reasons, including the current crisis and bailout demand. I think Bernie Sanders actually said it best: if they are too big to fail, they are too big to exist. The price of this bailout should have been, at a minimum, a massive breakup on antitrust lines.

1. The real economical reasons behind the plan

In order to understand the real economical reasons behind the “bailout” plan, first let us consider the following:
A financial institution issuing a mortgage IS the owner of the property as long as the loan is not fully paid back, therefore the issuer of the loan simply cannot lose any amounts whatsoever on a defaulting loan. On the contrary: if the loan defaults, the bank wins the ownership of tangible value-holding real estates, which it will eventually sell.
With the “bailout” plan now the banks become double winners, because they can "keep and eat the very same cake": in addition to being the owners of the real estates involved, they are paid the price of these assets as well. Therefore the claim that the bailout plan is needed to rescue the economy through “rescuing the bank system” is a major fallacy.

The only true element in the story is the shattered world-economy. However, the reason behind the crisis is not -or not only- the housing market crisis, but, above of all, the astronomical speculative, economy-controlling funds present in the economy, which in effect lead to a similar macroeconomic unbalance as in any centrally controlled markets. In order to gain real financial power for their owners, the value of these speculative funds need to be established by producing the respective actual tangible products and services. The need of rescuing the economy from the danger of hyper-inflation is therefore primarily due to the diluting effect of non-productive speculations and greed-games, and is now met by governmental interventions forcing the production sphere to positively produce the missing tangible assets behind the inflating currency.

However, the bailout “solution” to delay the deepening of the crisis (= to delay hyper-inflation and the subsequent total collapse of the economy) is not simply the wrong solution; it is the "solution" to accomplish the worst, as it is continuing the same path that has led to the current stage. It will inevitably drive the world-economy into its final collapse by further weakening of the productive sphere and strengthening the speculative sphere.

The signs of the above can be seen in the recent warnings of "a slow and painful recovery", despite the bailout bill. What this means is that although there will be a long and painful process, it will not lead to recovery in the end, because, in addition to paying the bill to non-productive hands, the productive sphere will be forced to produce the values of what they pay. The more tangible values the productive sphere will produce, the more funds the financial sector will withdraw from production and redistribute to non-productive speculative hands, i.e. to the hands of those who have been regulating the financial markets and have driven the world-economy toward the crisis. So while the banks are double winners of the speculative greed-games the productive citizenry is the double loser.

This is a self-reinforcing vicious cycle, because on one hand the production sphere is forced to recover the astronomical funds that have been withdrawn out it, however in lack of these funds, the resulting shrinking economy will be unable to produce what is unproducable. Since the increasing monetary units due to the diluting greed-games and speculations are still bound to represent the total produced values, the increasing unit prices (= increasing monetary units / the same or decreasing tangible economical value) are in effect carrying the burden of the speculative, non-productive funds.

The result of the above is a vicious cycle called stagflation which manifests in increasing work hours for lower and lower compensation, with increasing prices and increasing unemployment. (Stagflation is always the result of a long-term macroeconomic and monetary mismanagement: the combined simultaneous effect of the shrinking production and inflation.) In short, the better and more we will produce, the more we will be punished for it, until, due to the shrinking economy (=recession) most of us will be without work, and the rest will be “happy” to stay alive as low-paid slaves of the global monopolies.

This negative trend will affect the entire production sphere, including the mid-size and small business owners, both in the US and the EU.

2. The political and social implications of the plan

Regarding the political implications of the bailout plan, the plan, as a political act, needs to be assessed in consideration of the definition of “dictatorship”:
“Form of government in which one person or an oligarchy possesses absolute power without effective constitutional checks.
With constitutional democracy, it is one of the two chief forms of government in use today. Modern dictators usually use force or fraud to gain power and then keep it through intimidation, terror, suppression of civil liberties, and control of the mass media....” (Encyclopædia Britannica)

In view of the above, in a country that claims to be governed under a democratic and constitutional rule of law, the following questions should be raised to begin with:
Since when is it in harmony with the democratic US Constitution that the Government can use force, fraud and blackmail against its citizens in order to recover the losses due to certain grand-scale criminal activities?
Is it constitutional and legal to back up such crimes because of their complexity and magnitude and because the funds involved are in the billions? If the magnitude and effect of a crime is so high that it shatters world-economy, then such a crime is allowed? Or is it allowed as long as it can be explained away by spectacular political rethorics and lies?

Since when is it a legal-constitutional practice in a “democratic system of a free country” to grab the honest citizens’ properties by force and redistribute their earned wealth to a criminal sector, to those who have caused the crisis in the first place? Haven’t we learned from history that this act is clearly against the democratic property rights? Isn’t it the number- one violation of the principles of freedom; the number one evil the communist regimes established themselves upon?

Or should we take it that we have reached “perfect freedom”, when freedom means the freedom of committing crimes? From now on will bank-robbery also enjoy government support? If the bank robbers will report that they cannot recover the robbed national treasure, the whole nation – and in fact the whole world - will be forced to help them out?

Considering the recent news from Europe these amounts are likely to add up to above $1,200 billion (!) – $800 from the US + $400 from the EU - which means that the bailout plan is a global plan and the described scenario will affect the EU countries as well.

These amounts will eventually be transferred into the very same hands that have directed the world-economy toward the crisis in the first place, and who killed off most of the competition from the “free market economies” by the process commonly known as “globalization”. The primary relevance of this fact is that such an additional astronomical amount in the hands of a small oligarchy that already controls most of the global funds secures a final and total controlling power to this oligarchy over the whole world. Since their activity is supported by all major political powers, the global bailout plan amounts to a political power-grab over the whole world.

Finally, the global bailout plan and its negative effects on the global economy should be seen in the light of the following: the very same political lead that stands behind the process of forcing the majority of the citizenry out of the economy by regulating the world-economy toward stagflation, consistently pursue a trend of privatizing all public services, closing hospitals and eliminating all forms of social security and socialized health-care. (This is especially evident from the main trend of the EU policies of the centralized federal EU.) The net effect of this combination is that those who are and will be forced out of the economical arena will at the same time be left without pension, social care and health-care, which in effect will indeed drastically “downsize” the world population.

This is why, when looking at the facts themselves, it is hard to avoid the question: is it just a coincidence or there is a conscious will indeed to downsize the world population in order to slow down the so called “global warming”?

3. Isn't it time to start building a functioning system?

This bailout plan evidently marks the end of the "American dream era" that has kept this ultimately flawed system running for long decades. It is about time for us to realize that living on credit is by definition slavery. Much of individual success and well-being for the vast majority of the Americans (and more and more on other continents as well) has been nothing more than an illusion based on fake possessions, and is an achievement reached at the price of accumulating individual and national debts.

Now, after this shameful bill has been passed, we may all ask ourselves considering just the plain facts in front of our eyes: what kind of future is there for a country whose citizens can now choose from two presidential candidates, both of whom have been supporting the blatantly antidemocratic and anti-American blackmail called "bailout bill"? What is the fate of a world whose future is determined by such an antidemocratic and internationally violent leadership as the US leaders of today? What kind of economical freedom can we speak of when a monetary unit no longer represents a tangible value-unit of production to be used as a means of exchange, but a unit of rights to be abused by the owner? What rights can be ensured in a country – and in a world – where only those have rights who can purchase their rights by often astronomical amounts of unearned monetary units?

This system has shown ample evidence of an astronomical-scale financial greed backed by a more and more centralized political power. And this is the system that is ultimately responsible for the ongoing global multi-billion dollar financial crimes, mismanagement and speculations that have led to an unprecedented global crisis, turmoil and economical unbalance. Now, to top its own evils, this system even allows for an open blackmail of the honest, hard-working productive citizens, threatening them with an unrecoverable economic collapse in the case they refuse to pay back what has been stolen from the world economy.

Isn't it time now to say NO to such a system, to refuse the blackmail and to recall all politicians who have been supporting this antidemocratic and anti-American bill? Isn't it time to demand genuine free elections with candidates who represent the American Constitution and represent the will and interest of the electorate?

Isn't it time to demand profound social, political and economical reforms? Isn't it time to start building a society that would be governed by responsible governments, ruled by a democratic rule of law obeying the Constitution rather than bending it according to the interests of the leaders? Isn't it time to reintroduce a genuine fair and free competition-based economy, on the grand spirit of America: on social responsibility and compassion, talent, morality, diligence and honor?

Isn't it time to realize that it has been a false dilemma to force ourselves to choose between the following political systems: communism (or socialism) or imperialism?

The fact is that there is a third alternative: genuine democracy under a genuine constitutional rule of law, in which independent, constitutional checks and controls effectively prevent the government to gain absolute control over the citizens. The fact is: that the highest economical and social standards have been maintained during those periods of some of the free Western countries of Europe, (while the dictatorial and centralizing EU’s influence was minimal*), when the rule of law and the principles of genuine democracy were realized in practice, when politics and economy was governed by the best (both morally and professionally) rather than by the greediest and the most corrupt. When the government interventions were to protect the productive citizenry against any antidemocratic and non-productive factors, and when crime has been prosecuted also when it was committed on a grand-scale.

On the other hand, economies, when regulated by a moral and truly democratic leadership, can achieve such a high success rate of production that the citizens can afford a high living standard and at the same time can afford to maintain a just social and healthcare system that would provide a safety net for everyone. What is in our days called "free market economy" is in fact light-years away from what free really means in macroeconomic terms. (As explained earlier, economy today is NOT controlled by the mechanisms of a free market but by gigantic financial speculations, oligarchies, monopolies and competition-hostile central regulations. These altogether result in a highly unbalanced system, which is clearly against free and fair competition.)

In an ideal system, citizens reach a consensus in which they offer their highest productive potentials and receive values according to their worth, but at the same time they don't have to be afraid of losing their health or losing their productive potentials and their homes. In an ideal system real productive activity and innovation is rewarded, rather than the stagnant, unmotivated and overfinanced mega-sized monopolies and multi-billion dollar speculations, which soon enough would cause an overall shrinkage of the economy, would trigger an irreversible stagflation, will force all competition out of the economical arena, and in effect will drastically "downsize" the population of the world.

In an ideal system the government interventions are NOT directed to promote the ruling elites (as, for example, this blackmail called "bailout" is), but to maintain a socially just and safe system in which everyone feels to be taken care of.

NOW is the time.
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[*Many of us may have realized by now that the label “democracy” in the US has for decades been only a theoretical term, but what not many US citizens may know is that the very same is true for the EU-countries as well. (You will not read this in the daily fairy tales called “world-news”):
The leaders of the EU, who are in strong alliance with the US leadership, are at present literally forcing 27 countries of Europe to form one country, a sort of “United States of Europe”, with a president of 500 million people who is NOT elected by the citizens and with a constitution that is not to protect the people but their leaders. This new antidemocratic super-power called EU is being founded behind the scenes despite the fact that a piltical unification under the said constitution has been expressly and repeatedly refused by all popular votes ever held in the affected countries. Contradicting the constitutional will of their own people, the EU’s "founding fathers" one year ago agreed to secretly reinstate the formally rejected EU Constitution and signed the same constitution in a disguised form, as a seemingly harmless ‘reform treaty’ (Lisbon Treaty). ]