September 18, 2008

Debt Absorption Entity: Your Grandchildren

Oh boy! The banks on Wall Street are so happy. The Dow Jones stock index shot up 400 points on news that the Republicrats might create an entity to absorb banks' bad debt. The name of that entit? "Your Unborn Grandchildren."

This is another abuse of the US Constitution, the preamble of which is supposed to provide for "ourselves and our posterity."

A friend of mine is suggesting that we use this financial crisis to call for a restructuring of the Constitution... to shift more of the power from the elite, who have benefited greatly from the bubble economy, to the ordinary people. My guess is the elite would coopt the process and even if we got a better constitution it would also be ignored.



libhom said...

I have mixed feelings on the buyouts. But, I hope we get lucky like we did on the Chrysler bailout. The gummint made money on that one.

GDAEman said...

libhom, this is an entirely different level. The system has crashed. Every bank is in default, not just one big manufacturer. We're bailing out the corporate class, when we should be negotiating how to remould the corporate system to be more equitable.

libhom said...

Personally, I think we should be legislating, not negotiating, how to change the system of corporate power. But, you make an valid point.

My biggest reservation is that little people will get screwed the most if these companies fail.

GDAEman said...

libhom, Good point on "legislating" vs "negotiating."

The last two "investment banks" fell today.

The little guys don't have to get hurt. The system has collapsed. The question is, what will the Senate do? Re-create the old system, or institute a new system? Can we get more than just letting people stay in their houses?

If you're familiar with Naomi Klein's "Shock Doctrine" we are witnessing a major shock. The sharks are aiming for their goals. The people need to get into the game. Now is the time for us all to be pushing for profound new rules. Yes, thru legislation, but also through a cultural shift.

Anonymous said...

dgaeman, I'm familiar with the "Shock Doctrine." You're right: That's exactly what is happening. However, I've talked with 2 people recently who just lost over half of their retirement accounts (cashed everything in at 1/2 the value, maybe not the best move) I was urging them to call Congress, make noise, "shout" as you suggest. Problem is, they are in shock. And when you're in shock, you can't do diddly.

libhom said...

I am familiar with the Shock Doctrine and feel like I'm living it. I was wrong. We should be bailing out the homeowners, not guaranteeing mortgage paper. That would stabilize the banks too, while helping the rest of us keep our homes and our property values.

GDAEman said...


We've been fortunate that Congress has taken a little more time to think this thru. There are ways to protect ourselves.

Example: Go ahead and bailout the institutions on which many 401k plans and pensions depend. BUT, put the tax burden for that $700B on the top 5% of the wealthiest people.

kamat said...

the ordinary people left under a lot of pressure inspite of this situatioons.

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