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Bush Plan and Paulson: Biggest Rip-off and Blackmail in History
The 2008 Emergency and Economic Stability Law which the US Congress has just approved to purchase worthless assets from banks and financial entities, is the biggest state intervention since the Great Depression and represents the rejection and collapse of neo-liberalism.
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The 2008 Emergency and Economic Stability Law which the US Congress has just approved to purchase worthless assets from banks and financial entities, is the biggest state intervention since the Great Depression and represents the rejection and collapse of neo-liberalism.
Many are now attempting to disassociate themselves, calling it "an irresponsible financial system", "crazy", "dislocated", etc, but the truth is it is the culmination of the biggest rip-off and financial blackmail in history.
The first major State intervention in the economic sector took place in the 1930's, after the financial melt-down in October of 1929, which is being replaced by the biggest in history and has been taking place in "slow motion" since August of 2007, with a bursting of the real estate bubble, the bankruptcies in course and the recent worsening of the credit crisis that threatens to paralyze and dismantle what is left of the current world financial neo-liberal system.
The intervention of the banks, in compliance with the Bankruptcy Law, is not a new state intervention in the economy, but the application of the current rules procedure (which emerged during the great depression), as well as almost all of the regulations of financial institutions, the economy in general and the participation of the State constituting what was and continues to be the largest government interference in the US economy.
This legal structure was created during the 1930's and 40's in addition to the current US financial system which began its decline some three decades ago, alongside the emergence of the neo-liberal policies that established as a fundamental principle deregulation in all spheres, especially in the financial sector, annulling regulations, their non application and/or their deliberate non performance faced with violations and financial crimes of all types, especially during Bush administration.
That is how in 1999 the Glass-Steagall Law, approved in 1934, was abolished, key to the functioning of the bank regulation, which stopped the commercial banks from assuming the role of the investment banks.
That abolition allowed the commercial banks to enter the assets and speculation business, creating what in the US was called the "universal bank model", giant corporations with diversified operations that began to extend their tentacles throughout the world.
In parallel, there was a fraudulent juggling with a new glossary of terms, like "engineering or new financial architecture", that makes assets "disappear", wrapping them in "product packages", with the complicity of the qualifying agencies and the regulatory apparatus including the US Central Bank. For more than two decades the money overflowed, the rich became richer and the poor even poorer.
One of the figures that illustrate the magnitude of the theft of these "innovations" is that it "aided" the banks and brokers in obtaining a "new level of profitability" with "returns" of between 20 and 30 percent on investments. The losses, calculated up to July, are between four and six billion dollars, astronomically surpassing the savings and loans crisis of the 1980's and 90's and the technology bubble of 2000, which no one knows where it went because the "transparency" also disappeared.
And to conclude with a "golden handshake", in addition to the endless liquidity injections that Washington and its main ally Central Banks carried out each day, the Bush administration blackmailed the US people and the world with the paralysis of the global economy if the 700 billion dollar bailout for the services of the elite of the financial neo-liberal oligarchy was not approved, burying them in the biggest crisis of capitalism.
Many are now attempting to disassociate themselves, calling it "an irresponsible financial system", "crazy", "dislocated", etc, but the truth is it is the culmination of the biggest rip-off and financial blackmail in history.
The first major State intervention in the economic sector took place in the 1930's, after the financial melt-down in October of 1929, which is being replaced by the biggest in history and has been taking place in "slow motion" since August of 2007, with a bursting of the real estate bubble, the bankruptcies in course and the recent worsening of the credit crisis that threatens to paralyze and dismantle what is left of the current world financial neo-liberal system.
The intervention of the banks, in compliance with the Bankruptcy Law, is not a new state intervention in the economy, but the application of the current rules procedure (which emerged during the great depression), as well as almost all of the regulations of financial institutions, the economy in general and the participation of the State constituting what was and continues to be the largest government interference in the US economy.
This legal structure was created during the 1930's and 40's in addition to the current US financial system which began its decline some three decades ago, alongside the emergence of the neo-liberal policies that established as a fundamental principle deregulation in all spheres, especially in the financial sector, annulling regulations, their non application and/or their deliberate non performance faced with violations and financial crimes of all types, especially during Bush administration.
That is how in 1999 the Glass-Steagall Law, approved in 1934, was abolished, key to the functioning of the bank regulation, which stopped the commercial banks from assuming the role of the investment banks.
That abolition allowed the commercial banks to enter the assets and speculation business, creating what in the US was called the "universal bank model", giant corporations with diversified operations that began to extend their tentacles throughout the world.
In parallel, there was a fraudulent juggling with a new glossary of terms, like "engineering or new financial architecture", that makes assets "disappear", wrapping them in "product packages", with the complicity of the qualifying agencies and the regulatory apparatus including the US Central Bank. For more than two decades the money overflowed, the rich became richer and the poor even poorer.
One of the figures that illustrate the magnitude of the theft of these "innovations" is that it "aided" the banks and brokers in obtaining a "new level of profitability" with "returns" of between 20 and 30 percent on investments. The losses, calculated up to July, are between four and six billion dollars, astronomically surpassing the savings and loans crisis of the 1980's and 90's and the technology bubble of 2000, which no one knows where it went because the "transparency" also disappeared.
And to conclude with a "golden handshake", in addition to the endless liquidity injections that Washington and its main ally Central Banks carried out each day, the Bush administration blackmailed the US people and the world with the paralysis of the global economy if the 700 billion dollar bailout for the services of the elite of the financial neo-liberal oligarchy was not approved, burying them in the biggest crisis of capitalism.