Post-Lehman Bros: What SHOULD Have Happened

Today is the 5th Anniversary of the Lehman Bros collapse.

The President is touting the economy..  Says its 'safer'..

Well what else do you expect - to hear Obama admit he's inept?

Posts like this are admittedly quite frustrating to write because even with the large circulation of loyal readers we've accrued after three years, we are not CNN, Fox News or Associated Press..

We simply can not ever get That many eyeballs visiting our site meaning a vast majority of Americans are going to continue indefinitely being Ignorant and blissfully unaware to the fact the economy is Worse today than in 2008..

And these people.. the vast majority.. will not be exposed to any sincere or objective reporting of how bad things are allowing them a feeling of naive contentment that frankly is offensive to whomever takes the time to educate others..

Today's focus won't be on how bad the US economy is..  We'll save stats like retail sales last month only rose 0.2%  while another 512,000 unemployed quit looking for work for another time..

We're going to address what should have happened with specific focus on the first few weeks after the crisis and the policies (or lack there of) put into place after Obama's first Inauguration..

Before we begin, we must make this point very clear so you know our frame of mind and we suppose for our own therapy:

We think both George W Bush and Barack Obama are both Terrible and their Presidencies have been abject failures!  In fact we see Obama economically as 'Black Bush'.

If you disagree.. If you try defending one over another, that is your right but please accept the fact you are simply looking through your personal political prism; i.e. you're biased.

Both men we/are simply incapable or unwilling to address the economic collapse properly and see it as it really was.. a gift.

Yes.. a gift; an opportunity to change the system in a positive i.e. more fair and ecumenical way and to address this structurally inequitable have/have not society..

So we're going to state what should have happened particularly in the first 6 months after the collapse and explain why we'd all have been better..

*  The original TARP for $700 billion should not have been allowed to pass.

It originally failed to pass but after intense political arm twisting and the Big Boys purposely causing an 1400 pt market drop over two days to scare the common peons, the financial Elite won...

Now if TARP had to go through (which it didntt), there should have been a paper trail who who received what.  There intentionally was not one.

That Bleeping bastard former Treasury Secretary under Bush (and former Goldman Sachs CEO) Hank Paulson intentionally set TARP up to be a gift to banks, not a loan..

Every bank got billions in free money whether they needed it or not.. this was meant to hide from the American people which banks were severely distressed vs those still strong and solvent since all received.  

And there was no recording of who got what.. so no one could be legally responsible to ever repay it...

We also bailed out foreign banks throughout Europe and Asia using US taxpayer money.. this was done through both the US Treasury and the Fed.  Bernanke also bailed out US and foreign multi-national corporations

*  The stock market should have been allowed to crash

On September 15, 2008 the Dow was at 11,143.  It would drop down to a low of 6,626 six month later in early March 2009 before QE 1 began...

So that was a slow steady drop of 4500 points or there abouts..

Did the country perish?   No

Was there panic and civil disobedience on the streets?   No

All that really happened was a bunch of super rich people lost a good chunk of their wealth meaning poor Theodore and Muffy couldn't attend that prestigious private school in the fall.

If the economy was truly in free-fall, the market would have dropped 4500 points in a month.. or a week.  The President would have had to shut down the market as a 'holiday' until the panic among the populace calmed.

None of this happened.

So that bearded bastard Ben Bernanke institutes a policy of being the buyer of last resort for toxic mortgages, US treasuries and anything else he can find.   Used tissues?  Here's $10k per sheet...

And today the Dow is at 15,505 as of this writing.

And the richest 10% own 90% of all stocks..

It has artificially grown by 4,400 pts compared to 5yrs ago today;  grown by 8,800 pts since QE 1 began

It took over 200 years for the market to reach 1,000 -- Now the Fed can manipulate things so the market rises nearly 9,000 points in 54 months.

Every 1000 pts in the stock market represents $1 Trillion..  Its all bullshit..  It is a market on steroids.  It is purposely allowed to only rise and any drop of more than 2% is met with manipulations, false rumor or more money flow..

And the real economy is collapsing..

People don't realize what the Fed creates and spends becomes debt which taxpayers are on the hook for..

The market should have been allowed to drop to a True bottom point where real capitalism kicks in, and people naturally buy cheap stocks (rather than be sold a lie for 5 months that they couldn't get any cheaper)

~  Seems like we've only gotten to two bulletin points--

Just so hard to express a complicated concept then leave it isolated without explaining how Bush, Obama, Paulson, Bernanke and the rest of that scum have hurt this economy worse and let a golden opportunity to re-start slip (intentionally) through their fingers...

But we can't write endlessly...  So here's some brevity..

* The banks should have been broken up so to be regionalized..    For instance only Bank America in the Northeast...  JP Morgan Chase only in the Midwest..

Glass-Steagall legislation should have also been bought back into law allowing a separation between normal banking and risky ventures so if they caused a plummet, the normal banking apparatus wouldn't have been affected..

* Institute a policy where no individual under 21 can get a loan for any amount from a lending institution without a co-signer who is legally on the hook for the debt.  This is specifically to deter student loan borrowing (currently 1 out of every 3 default)

*  The CEOs of every bank including Goldman Sachs and AIG (whom we bailed out at $182 Billion) should have been arrested exactly as Madoff was and put on public trial, then incarcerated.

AIG itself should have collapsed.  Its called capitalism-- you sink or swim on your own

* In fact no one should have been bailed out except the individual:  The total US consumer debt is approximately $2.2 Trillion.. that's everything from car loans and mortgages to credit cards and student loans.

If the government wanted to, it could have paid everyone's debts to zero while recapitalizing the banks for that amount.  Instead banks were funded and people still expected to pay on the debts like the serfs they are seen as...

* Change the law so in all corporate bankruptcies, individual creditors get paid first followed by corporate investors and banks.  The Big Boys can write off the losses in a restructuring.. The individual creditors often can not..

*Institute a law that if a person owes a mortgage, loan, etc to company A and its bought up by company B or is forced to close its doors, the person has such debts wiped off the books and does not owe anymore.

This will discourage future mergers and aquisitions like when Countrywide mortgages was bought out by Bank of America or JP Morgan merged with Chase

* Laws should have been passed forcing corporations to not have temp workers and part timers to exploit.

If you are a company with 500+ workers nationally then all temps are paid exactly what regular workers are including benefits...  And a "part time" worker is someone who works less than 20 hours. Corporations can not escape Obamacare  by reducing worker hours to 35 or 29...

* The income tax rate for the top 1% should have risen to 70% (same as during Eisenhower's Administration) with stock market dividend tax at 55% for all stock profits over $100k annually

Consequently, all workers earning below $30k, pay zero income taxes.

We could go on and on..

2008 was a golden opportunity to dramatically change the system  

It was tossed away..

One can only Hope and Pray for another crash.. one that will provoke needed changes and perhaps this time with a populace who willingly wishes to educate themselves

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