The Washington, D.C. Visitor's Center - Bailouts - The Welfare State by Star Parker
Fannie Mae = Heidi's, Barney Franks and Chris Dodd, co-owners. Lew
Lew, Couldn't have said it better. Those derivatives remain outstanding by the trillions. That bailout is forthcoming. "J"
Heidi's Bar:
Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, pay later. She keeps track of the drinks consumed on an Accounts Ledger (thereby granting the customers loans).
Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume of any bar in Detroit .
By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively. A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
At the bank's corporate headquarters expert traders figure a way to make huge commissions and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.
One day, even though the bond prices are still climbing, a risk manager at the original local bank decides the time has come to collect on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi.
Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes. Eleven employees lose their jobs.
Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations. Her beer supplier is taken over by a competitor who immediately closes the local plant and lays off 150 workers.
Fortunately, though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from their cronies in Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Heidi's bar.
(A simple explanation even the simple should understand, Congress excluded.)
Re: The Internet.
My Friend: YOUR burden could be reduced with a government going in the right direction. More taxes or controls in whatever form will ultimately affect you. Here's the heart of my concern: Whenever a politician has a benign proposal, people need to look through the smoke. As one of my pen pals pointed out, laying cable, bringing the internet to outlying areas sounds good, creates jobs. But doesn't HughsNet bring it to outlying areas without expensive, taxpayer-paid-for, cable?
Obama's word "modernize" caught my attention. "Is this smoke & mirrors?" The internet works fine. The internet doesn't need to be modernized. What's the real purpose behind his proposal? I'm not against Obama. I'm just highly suspicious of government intervention in the free marketplace.
I look back & recall a time when we thought we could trust our elected reps to know what was best left to individual enterprise vs. what was best done by government. It was that misguided assumption & trust that brought us to where we are. The "line" is now so blurred we've got to sort things out & constantly push the pols back away from our dinner plates, all the while they're saying they'll "feed us" (jobs?).
You & future genereations stand to lose what's left of the America my wife & I (now in our 70's) grew up in & hold dear. We will soon be dead & gone but there's an "oh-so-precious" legacy that still remains to those who live on. That legacy is rapidly slipping away & some Mr. Smarty Pants, "fixing" things, will finish the American Dream while promising it to you.
A government "creating" jobs is ultimately going to give us a leash. Count on it! Lew
Lew: I am personally angered anyone expects Washington to solve financial problems. Congress can't solve amything, they're pompous asses.
Congressional Leaders scolded the CEO’s of the Big 3 about mistakes running their companies and had little faith that they are capable of financial responsibility. How can those same government leaders have this attitude when they are TOTALLY incapable of running our nation's other affairs.
A perfect example is the Congressional Visitors Center in Washington, DC. When this was proposed & planned, it was budgeted at $100 million. The final cost was to complete this facility? $621 million. Unbelievable, how any construction project could have an overrun over 6 times the original budget! And it is a visitors center. Does it really serve a beneficial purpose? What could that $621 million have been used for to the betterment of our citizens?
Take the $700 billion bank bailout program. Does anyone think our politicians can EFFECTIVELY administer and monitor this money? And now, these same government leaders believe that Washington DC can monitor our financial institutions AND our auto companies? They can’t even build a visitors center on budget! Frustrated in Pittsburgh
To Frustrated: People haven't grasped the seriousness of what's going on at all levels of our government. The Visitor's Center stars as a national example. Cost over-runs on city, state & national construction projects may explain a lot of budget shortfalls. That there could be so much graft across the country is unbelievable to honest Americans. Cost over-runs are so commonplace they've overwhelmed our common sense, blunted our ability to do anything about them or certainly left us feeling helpless to do anything at all. We need ACCOUNTABILITY.
Ours is no longer a back-woods, uneducated nation that can't read, grasp or understand facts & figures. We're constantly being hounded for more educational tax-dollars, but the electorate is being treated as "dupes" by local, state & national politicians. They've gotten away with it for so many years, it's entrenched. Oversight? What oversight? Where does the "duping" begin? It began with the $100 million. Did anyone even question that figure? To begin with, it may have been outrageously high but we swallowed that so we were "set up for the big one".
Once construction begins, what can we do but accept the final cost, like $621 million for the National Visitors' Center?
Some may think our economy is being attacked from without. I don't agree, at least for the time being. Some may think our pols are just incompetent. They may be. More likely they're smarter & getting richer than we think they are. The pols have fed at the public trough far too long. It's time we, the farmers, "put them out to market".
The Big 3 ought to be ashamed of themselves. They've set a poor example for quality executive know-how in our American Corporations. I'm not claiming to know the answers, I'm saying THEY should & that it shouldn't be at our nations expense as a "loan" or otherwise.
What happened to, "When the going gets tough the tough get going?"
And the Unions? They loaned out money to build casinos, golf resorts, or whatever. How about a loan (or collateral for a gov't loan) to an industry on which their living depends?
Just saw an interview with Rep. Pascrell (D - N) on Cavuto (Fox News). Another one who just doesn't "get it". A tax credit for new auto buyers? Sure, for autos & trucks (including semi's) that meet federal criteria for emissions, gas mileage or other environmentally friendly features (like electric cars & hybrids) foreign or made in the USA.
Obviously an idea that could increase demand while curbing worldwide pollution, that could have saved the Big 3, could encourage foreign auto makers to improve standards helping other countries control pollution without their passing any laws themselves. A fine idea but presented as Pascell's alternative to a gov't Big 3 Bailout? COME ON!
The Big 3 automakers are right to appear before Congress, but it should be to "hold their feet to the fire" for the past irresponsible acts of Congress that helped bring about the current state of affairs. They should be seeking responsible legislation that would allow them to survive if they actually do work their way out of the mess they're in.
Our Tennessee Senator Corker (link provided below) showed some clear thinking about the Big 3 Bailout. We all need to see more examples of Senators who actually know how to think & see the bigger picture. They seem to be few & far between. Lew
Abridged letter from Troy Clarke, President of General Motors & a response from Gregory Knox (with superfluous comments removed to conserve space):
Dear Employee, Next week, Congress and the current Administration will determine whether to provide immediate support to the domestic auto industry to help it through one of the most difficult economic times in our nation's history. Your elected officials must hear from all of us now on why this support is critical to continuing the progress we began prior to the global financial crisis.................As an employee, you have a lot at stake and continue to be one of our most effective and passionate voices. I know GM can count on you to have your voice heard. Troy Clarke, President, General Motors North America.
TO TROY CLARKE: You are infected with the same entitlement mentality that has bred in UAW halls for decades & is now sweeping the nation. The consumer has been ignored for years while management myopically focused on personal rewards packages & your factories were filled with the world's most overpaid, arrogant, ignorant and laziest entitlement minded "laborers".
I've called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle along with countless other automotive OEM's & Tier One's for 3 decades throughout the Midwest. What I've seen over the years in these union shops can only be described as disgusting.
Mr Clark, the president of General Motors, states: "There is widespread sentiment in this country, our government and especially in the media that the current crisis is completely the result of bad management. It is not…"You're right, Mr. Clark. It's not JUST management!
How about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double or triple time for a job they easily could have done during a 40-hour week.
Or the line workers who threaten newbies with all kinds of scare tactics for putting out too many parts on a shift and for being too productive (mustn't expose the lazy bums who've been getting overpaid for decades for their horrific under-production, must we?!?)
Do you really not know about this stuff?!?
What the hell has Detroit been doing for the last 40 years?!? Did you JUST wake up to the gaps in quality & efficiency between us and them? The K car vs. the Accord? The Pinto vs. the Civic?!? Do I need to go on? We are living through the inevitable outcome of our auto industry's failures.
I attended an economic summit last week where a brilliant economist, Alan Beaulieu surprised the crowd when he said he would not have given the banks a penny of "bailout money". Yes, he said, this would cause short term problems, but.....where there had been greedy & sloppy banks, new efficient ones would pop up. That's how a free market system works. But, we are now deciding...that capitalism doesn't work...Does it occur to ANYONE that the "competition" has been producing vehicles PROFITABLY for decades in this country? How can that be?
Let's redevelop the work ethic that made us a great nation. Gregory J Knox, President, Knox Machinery, Inc. (Mr. Knox, forgive my editing? Preserving the essence of your considerable insight into the situation while reducing volume & retaining clarity was my intent. Lew
Back on Uncle Sam's plantation.
Time for some "Tough Love?"
By Star Parker - Syndicated Columnist.
Six years ago I wrote a book called Uncle Sam's Plantation to tell what I saw living inside the welfare state and my own transformation out of it.
I said there are two Americas -- a poor America on socialism and a wealthy America on capitalism. I talked about government programs like Temporary Assistance for Needy Families (TANF), Job Opportunities and Basic Skills Training (JOBS), Emergency Assistance to Needy Families with Children (EANF), Section 8 Housing, and Food Stamps. A vast sea of perhaps well-intentioned government programs, all initially set into motion in the 1960s, that were going to lift the nation's poor out of poverty. A benevolent Uncle Sam welcomed mostly poor black Americans onto the government plantation. Those who accepted the invitation switched mindsets from "How do I take care of myself?" to "What do I have to do to stay on the plantation?"
Instead of solving economic problems, government welfare socialism created monstrous moral and spiritual problems -- the kind of problems that are inevitable when individuals turn responsibility for their lives over to others. The legacy of American socialism is our blighted inner cities, dysfunctional inner city schools, and broken black families.
Through God's grace, I found my way out. It was then that I understood what freedom meant and how great this country is. I had the privilege of working on welfare reform in 1996, passed by a Republican Congress and signed 50 percent.
I thought we were on the road to moving socialism out of our poor black communities and replacing it with wealth-producing American capitalism. But, instead of poor America on socialism becoming more like rich American on capitalism, rich America on capitalism is becoming like poor America on socialism.
Uncle Sam has welcomed our banks onto the plantation....
Yes, sir, we heard it from Jimmy Carter when he created the Department of Energy, the Synfuels Corporation, and the Department of Education.
Or how about the Economic Opportunity Act of 1964 -- The War on Poverty -- which President Johnson said "...does not merely expand old programs or improve what is already being done. It charts a new course. It strikes at the causes, not just the consequences of poverty."
Trillions of dollars later, black poverty is the same. But black families are not, with triple the incidence of single-parent homes and out-of-wedlock births.
It's not complicated.
Americans can accept Barack Obama 's invitation to move onto the plantation.
Or they can choose personal responsibility and freedom.
> Check out her website, just insert her name in your Address Bar to find it<