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The bailout game as applied in real life to Penn Central, Lockheed, New York City, Chrysler, Commonwealth Bank of Detroit, First Pennsylvania Bank, Continental Illinois; and, beginning in 2008, literally all major banks, AIG, automobile companies, and even banks of other nations.
THE REPAYMENT SCAM
In December of 2009, Bank of America announced that it had repaid its $45 billion “loan” from the Treasury. Government officials boasted that their actions were vindicated and that taxpayers even made a profit. The media thought it was wonderful and accepted the announcement at face value. The source of the money was said to be cash reserves and the sale of a new stock offering; but there was something very wrong with that picture.
Cash reserves were not a likely source because the bank reported a net outflow of cash and was still losing money. Its loans were continuing to go sour, and defaults had more than tripled from the first quarter to the third. Bad loans were up 15 percent.  The only way the bank could have sizable cash reserves was to receive a confidential infusion from the Tr easury – what Mr. Paulson would call “a private event”. In other words, the government may have provided the money to pay itself back, in whi ch case it was an accounting trick, a publicity stunt to fool the public into thinking that bailouts were acts of great statesmanship after all.
1. “Bank of America TARP Repayment Premature, Analyst Says,” Huffington Post (Net), Dec. 4, 2009.
THE SAGA CONTINUES
The saga continues. On June 12, 2010, President Obama asked Congress for $50 billion to bail out American cities and states.3 By that time, almost every state and thousands of local governments had run out of money and began negotiations with Congress and the White House to pay the shortfall, especially the cost of welfare. The argument was that, if welfare checks stop coming in the mail, there will be riots in the streets. No one wants to see that, so federal funds are assured. Along with federal money will come control, and the states may lose their last chance to exert independence and sovereignty over their own affairs.
In August, 2010, Freddie Mac was back at the payout window asking for another $1.8 billion, bringing the total to over $64 billion. The U.S. national debt had reached a record high of $13 trillion, almost $120,000 per taxpayer, and that does not include off-budget liabilities, which are at least twice that amount. It will become larger. By the time you read these words, there will have been even more bailouts and legalized plunder of the American people.
The cost of funding states and local governments in addition to the federal government in addition to the banks and insurance companies in addition to the auto companies in addition to the banks of Europe in addition to endless wars and a global standing army will crush what is left of the American middle class. How long it can continue is anyone’s guess, but we do know it is coming close to completion. Chapters 25 and 26 are devoted to where it is headed and how it may end.
1. Blodget, Business Insider (Net), May 3, 2010.
2. “Federal Reserve Opens Credit Line to Europe,” Fox News (Net), May 10, 2010.
3. “Obama pleads for $50 billion in state, local aid,” by Lori Montgomery,Washing ton Post (Net), June 13, 2010.
TAXPAYERS PAY TO SEND THEIR JOBS OVERSEAS
Among bailout recipients, it is common to see the money used in ways that destroy jobs for the same American taxpayers who pay the bill. During the time when U.S. banks were receiving more than $150 billion from American workers, they were requesting special visas to import 21,800 personnel from other countries to replace Americans in upper-echelon jobs, including corporate lawyers, investment analysts, programmers, and human-resource specialists.3 This disdain for the American work force is partly because of corporate pursuit of maximum profit above all else and partly because decision-makers consider themselves to be internationalists, with no special interest in America except as a cash cow to be milked as regularly and thoroughly as possible. As will be illustrated in the following chapters of this book, some of these people, acting through organizations such as the CFR (Council on Foreign Relations), are consciously pursuing policies designed to lower the economic stature of America so it can be more comfortably merged into global government. Taking money from American workers to build up the economies of foreign countries has done much to advance that goal.
By the end of 2008, bailout of just the financial-services industry during the Bush administration had reached over $7 trillion, which was ten times the amount originally estimated. It was more than twice the cost of World War II.4 Although this was many times greater than anything like it in history, it was considered to be a temporary solution, leaving final decisions for the incoming Obama Administration. 1 Although many voters thought there would be a change under Obama, the handwriting was already on the wall: 90% of the donations to Obama’s inauguration fund came from Wall Street firms that received billions in bailout and were anticipating more of the same. 2 They were not to be disappointed.
1. “Ford starts making Fiesta in China,” Raw Story (Net), Jan. 15, 2009.
2. “Under Restructuring, GM To Build More Cars Overseas,” by Peter Whoniskey, Washington Post (Net), May 8, 2009.
3. “AP Investigation: Banks sought foreign workers,” by F. Bass and R. Beamish, Yahoo (Net), Feb 1, 2009.
4. “Financial Crisis Tab Already in Millions and Counting,” CNBC , Nov. 28, 2008.