Friday, February 11, 2011


Eighty percent of the banks and major financial institutions in this country were in danger of failing during the early days of the depression of 2008. This is the conclusion of a federal panel investigating the causes of the economic meltdown. Those same banks are now making strong profits due to some $12 trillion in help from the federal government and Federal Reserve. Meanwhile, a government watchdog reports a program aimed at modifying home mortgages and saving homeowners from foreclosure, is a failure and regressives want to shut it down.

John Paulson, a hedge fund manager, made $5 billion in 2010, as the economy recovered and cheap money made it possible to borrow low, lend high and take advantage of the improved corporate balance sheets world wide. Mr. Paulson is the same man who made $4 billion in 2008-2009 betting against collateralized mortgage securities being sold to pension funds and large institutional investors. In fact, Mr. Paulson helped Goldman Sachs set up one such vehicle called "Abacus". Mr. Paulson was allowed to pick which packages of bundled mortgages would be included in the offering and it appears he picked the worst mortgages to be sold to investors, and then bet they would fail, and made a fortune. No one knew of Mr. Paulson's involvement in "Abacus" which was a clear conflict of interest and caused the Securities and Exchange Commission to sue Goldman Sachs.

General Motors, Chrysler and other corporations were allowed to declare bankruptcy and get rid of a huge amount of debt and got the debt modified and restructured. Airlines like United used bankruptcy to throw their retirees under the bus getting permission to no longer pay for pensions and health care promised to their workers. Citadel Corporation, which owns KGO Radio, was allowed to go into bankruptcy and shed hundreds of millions of dollars in debt and re-emerge to continue operating and to give top executives huge bonuses. Yet, the one program aimed at helping average gum-chewing Americans stay in their homes, is a failure and should be shut down.

Neil Borofsky, the special inspector general for the government's bank bailouts, says the $341 billion bail out worked and returned the banks to profitability. He says the mortgage program "...which was the program that was supposed to help Main Street," is a failure. Originally intended to help 3 to 4 million homeowners stay in their homes, so far it has only helped a little over half a million. One of the worst offenders is JP Morgan Chase, which has modified just 67,722 out of over 200,000 mortgages while the company received tens of millions in tax payers funds to keep it solvent.

There are those who argue many of the homeowners don't deserve help because they borrowed more than they could afford to repay. The federal panel investigating the causes of the depression chronicled multiple abuses of the system, poor decision making by financial institutions, fraud, deception, poor regulation as reasons for the economic disaster. Despite all of these poor decisions...despite taking on huge debt and hiding it in many cases...despite almost destroying the economy in this nation, these institutions were bailed out. No one went to jail and now they are paying out billions in bonuses. Do you smell something rotten in Washington?

This home mortgage modification program is running on fumes at the moment. Main Street is once again being screwed while Wall Street returns to its profligate ways. If you are as outraged as I am, contact your representatives and demand the program be saved. Call, email or text Rep. Darrel Issa, a regressive Republican who chairs the House Oversight committee and demand he investigate JP Morgan Chase and others as to why they refuse to modify home mortgages.

It's called the Home Affordable Modification Program (HAMP). Will we really watch as the John Paulsens of the world make billions in bonuses and salary and corporate debt is "modified" in bankruptcy, while Americans, who can pay something, are kicked out of their homes? Wouldn't it be nice if instead of his new initiative to cozy up to corporate America, for once President Obama would draw one of his famous lines in the sand and stand up for Main Street? What do you think?

1 comment:

  1. Bernie and Friends,
    On the matter of Wall Street and Main Street,
    please notice which street the preponderance of the young come who are the stuff of which 'wars' are made. These are not wars, however. These are Piracy.

    It becomes evident when one looks into a specific example. I have arrived at this knowledge of a fascism that has overwhelmed the United States of America. This knowledge came through the method of Inductive Reasoning, or Induction.
    [Look that up in your Wikipedia.]
    They grind exceeding small, these whippets of info. Take the case of PFC Bradley Manning.
    Today I took pen to paper and wrote a letter to the Commandant of the brig where Bradley is held.

    Quantico Base Commander
    Colonel Daniel Choike
    3250 Catlin Avenue
    Quantico VA 22134

    Dear Sir:
    When I was 10 years old I remember how the U.S. held trials at Nuremberg, Germany and convicted Nazi war criminals. We executed men for following orders. I asked people why they did that, and it was explained to me that 'Following Orders' is no excuse, and that each one of us is responsible for actions that are immoral. The principle I learned then (as a boy) is that there is a morality that transcends legal orders.
    I am wondering if that idea still applies, and if not, then when was it repealed?
    Private Manning is charged with releasing a video of a 2007 incident, which shows human beings 'engaged' with a helicopter gunship. These people had no weapons. The second group was clearly focused on rescuing the wounded from the first 'engagement.'
    It may be that Bradley Manning went outside the chain of command to let us know of war crimes being committed in the name of every U.S. citizen.
    If he did that, he deserves a medal for demonstrating the courage that it took to apply the principles declared at Nuremberg.
    Sir ... Colonel Choike, I do feel that you are going through a personal dilemma over this. You know all too well that the great U.S. Military is being used for unwarranted purposes. Now we are ready to 'execute the messenger'; we are holding him in a way that will cause his mental and emotional deterioration.
    What sort of brutality do we exhibit, locking a man down for 23 hours a day, questioning his visitors until 'visiting time' is over, and in general, tearing down a young man's Will TO Live?
    As a boy, I learned that it was only the Japanese who enjoyed torturing other men.

    If we were serious about putting an end to terrorism, we would stop doing the things that cause large numbers of people to become INSURGENTS.
    Our Founding Fathers were Insurgents ... because a certain King believed that He had a Divine Right -- even a mission -- to rule the world.
    This man has not even been tried and is already being subjected to 'cruel and unusual punishment.'
    Let me take his place.
    After all, I have 'conspired' with young people at every opportunity to be aware of and to act according to principles that bind every civilized man. Please, Colonel, stop and ask yourself:
    "If I saw something which was clearly a war crime, would I have the courage, integrity and morality to call attention to it?"
    Those people on the ground were not 'accidents of warfare.' They were not even in the act of defending themselves. 'COLLATERAL DAMAGE' is such a fancy name for victims of murder.
    Please note that I am not asking You to free Bradley Manning -- but will you allow me to write to him once a week to let him know that one old geezer thinks about and prays for him -- for strength to keep his Sanity when all else is stripped away from him.
    Thank you, sir, giving this matter your attention. At least visit the prisoner and ask him off the record WHY he did what he did.
    THank you.
    We are all one.
    James F. Holwell