Chrysler Bankruptcy:
It appears that the hedge funds that wouldn't take a haircut have broken the back of Chrysler, forcing it into bankruptcy. See 'Surgical' Bankrutpcy Is Set for Chrysler, New York Times, Apr. 30, 2009. the US is on the line for $8 billion to support the restructuring. Obama was "pointedly critical of investment funds that rejected the government's settlement offer, saying they hoped to benefit from the sacrifices of others while making none of their own."
Workers have been vilified by the Wall St. Journal editorial board for wanting decent wages and a decent future, yet it is the investment funds--unregulated speculators--that are seeking to get blood out of a turnip in this process. When are we going to break the back of these hedge and private equity funds, that leverage other people's money and their connections with power to make themselves lots of money, that they claim should be taxed lightly? Congress must step in to regulate these giants/monsters and Obama should nationalize the wayward banks. We can't let Big Banks continue to run the country for their own benefit.
Wall Street Journal Inclusion of Thomas Frank (What's the Matter with Kansas?):
If you didn't read the editorial in today's journal, you should. (Sorry, although I subscribe, I refuse to fill out the private information required to get my free online edition, especially since it says I cannot even quote a headline online without their consent.) The Economic Populist has a good bit of it, here.
Defeat of bankruptcy mortgage loan modification in Senate:
Big Banks have handed us our worst economy in fifty years: after privatizing enormous gains, they managed to socialize all the associated losses, a perfect example of casino capitalism gone awry. And today this powerful "fourth branch" continues to gain "victories" for itself, losses for the people, as the Senate hands them another victory, defeating the Democratic proposal to allow homeowners to renegotiate their mortgages in bankruptcy. Labaton, Senate Refuses to Let Judges Fix Mortgages in Bankruptcy, NY Times, Apr. 30, 2009.
This is one more example of the unseemly, inordinate clout of bankers over Congress. The banks and bankers have been lobbying away, and the Senators--including 12 Democrats (including newly minted supposed Democrat Arlen Specter)--voted for their money bags over ordinary American people.
What's left in the legislation? Surely, you say, the rest must be measures that impose some restraints on banks? No, don't be disillusioned. The rest of the bill is a giveaway to the banking industry--cutting by 50% the amount they have to pay to the FDIC to insure their deposits and costing the US while saving the banks (and their mostly wealthy owners) $7.7 billion; making permanent the larger insurance limit of $250,000, over the former $100,000 limit. Folks, that's a benefit for upper middle class Americans, not for the ordinary folks who are losing their homes and don't have to worry about having too much cash in one bank to be eligible for government funds if the bank fails. The banks claim that modification in bankruptcy would hurt borrowers, but that has got to be bunk. Every other kind of loan can be modified in bankruptcy. People of America, rise up. Every one of you reading this, please write or call your Senators and tell them that they have failed.
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