Congress Hired as Your Broker

To date approximately $290 billion of the $700 billion rescue package has been used to prop up companies like AIG, which continues to send its execs to plush resorts with your money.  No formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste.  Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.  Does this concern anyone besides me?  Our government is spending our grand-children’s money with what appears to be reckless abandon and they are about to ask for another $50 Billion or so for the auto industry, insanity.  Congress says that oversight is difficult because of the “intensely complicated financial work” involved.  Isn’t that something you think about before hand?  Assignment of the primary oversight position, special inspector general, has resulted in a battle between the Finance and Banking committees over which has jurisdiction.  Additionally, lawmakers have yet to nominate the five-member Congressional Oversight Panel to assist the new inspector general.  What pelosi_reidhappened to letting people fail?  In order to have true freedom, we must be free to succeed and fail equally.  As soon as you toy with this balance everything falls apart, like what we are seeing today.  If folks neglect to read a contract and sign it, it is their fault.  That goes for individuals that take the risk of adjustable rate mortgages as well as auto makers that know the union contract they sign will bury them down the road.  It’s not like there aren’t other individuals as well as car manufacturers out there making good decisions and succeeding.   Some of us read our contracts and knew to negotiate a fixed interest rate.  But now the government is going to use tax money from the responsible to bail out those who made bad decisions.  Likewise, Toyota, Kia, and Hyundai have been building cars in the U.S. for some time using good business practices and with out labor unions.  

In order to get better, sometimes we must fail.  To keep propping up failing people and companies is lying and telling them and those modeling themselves after them that they don’t have to change, what they are doing is good enough, well its not.  Better yet, would you invest in people or companies like this?  Well, your grandchildren are.  

subprime_mortgagesThat is the general situation but what are the specifics?  What bad investments has the government made for you?  They can’t even tell you.  Congress will tell you it’s complicated and that you are not smart enough to understand but actually it is quite simple.  They acted as the catalyst in this financial crisis by directing Fannie and Freddie to do things they should not have, make bad loans.  Then they  defend their actions to the end (see video below).  How long will we continue to let such an incompetent body of people compound their own mess.  Enough!

[Youtube=http://www.youtube.com/watch?v=_MGT_cSi7Rs]

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3 responses to “Congress Hired as Your Broker

  1. Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor

  2. you’re rightfully concerned about this. I think the shift to send the monies to the banks, rather than buying the troubled assets for a reverse auction is especially troubling. Even though Paulson defends it, so far it sounds as you’ve said like there’s no accountability for How and where the money is spent, or who receives it. Thanks for the video especially. Good to see a little history. I know it’s not all Freddie and Fannie but, wow, that certainly exposes how lock-step and irrationally supported bad business practices were by house democrats.

  3. after I wrote this, I talked with a new friend who’s a social scientist, teaches at Tulane (a Christian too). He cited 5 contributing factors: 1. the lack of regulation, like with Freddie and Fannie.
    2. the political culture where sides take turns defending deregulation
    3. the complex banking instruments, i.e. derivatives
    4. predatory loan companies inducing persons into mortgages by bribery
    5. irresponsible borrowers.

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