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Commentary :: Elections & Legislation

Forgetting That We Are Spending Money On This

Ever since the decision to implement TARP the anger Americans have felt towards the relationship between our government and Wall Street has been palpable nationally. Far from subsiding, it has in fact grown and expanded. It has become the subject of conversations between people everywhere, even places politics are sworn off. It's just that much a part of our consciousness now.

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Actually, just like the belief we are spending too much money on foreign conflicts, the belief we have a government too close in terms of relationship to Wall Street is pretty much universal. When we think of the influence “special interests” have on national politics the first thing that pops in the minds of most Americans is corporations and with all the recent injections of cash into our economy that's Wall Street corporations. During the 2010 elections the Tea Party protesters organized by angry citizens, Libertarian groups and Republican interests were fueled by some of the very same things the protesters are fueled by today.

Anger over the fact that when our nation was teetering on the brink of collapse the people that caused the catastrophic circumstances got huge financial bailouts is in part the same fuel pushing burning beneath both movements. Both parties said they would do something to address the corruption and hold people from the financial sector responsible for the crash accountable. Neither have done a thing except to turn around and make excuses for those that caused the crash once they were elected. Pre-elections it's all “should they get away with it? No, no, no.” After taking office it's “should they be held accountable? No, no, no.” No, no, no across the board. Well someone's gotta attend White House functions right?

Why haven't more of the people, that caused the crash been made to pay for their part in the debacle? Lawmakers on both sides of the American political experience were held accountable via the best way we know. We decided they needed to be taught a lesson and so many were thrown out. There is a storm brewing for the 2012 elections and many Americans want change again because people that were supposed to bring it have not been doing their jobs in Washington.

So why didn't Wall Street also have to pay the price? There were securitized mortgage bonds worth less than zero and they were sent to ratings agencies and at the behest of large financial institutions looking to re-package them and re-sell them were re-rated top grade. Ticking time-bombs were coated with just enough platinum to appear as can't lose in falsified tranches of sub-prime mortgages and that is in large part why what happened occurred.

Mortgages were given to people with a fixed low payment set for two years ready to shoot out of control thereafter for people just barely able to make payments as it was once that time table expired. Yet these were the building blocks an entire industry of subprime bonds was built upon. They were called sub-prime bonds for a reason. The risk was alluded to in the name alone and the buck as always in life had to stop somewhere.

Folks were hauled up before Congress and finger wagging and litanies of stern lectures were read off by folks that got to know the business well. They yelled the reasons people should be held accountable. They lamented, growled and hissed. But in the end aside from a few token low level traders, nobody was held accountable. The people that saw it coming, or should have, were let go.

When you take anything rated bottom of the barrel and re-sell it as top of the line you are ripping people off. When you take food items for example that are rotten and below grade, and re-package them as fresh and top quality there are never any hesitations. Heads roll and people lose licenses, go to court and get sued etc.

If people sold bullets for hunting rifles that were rated as having a high probability of blowing up in people's faces and causing them blindness and more there would be questions and investigations. If those bullets were rated as being top of the line in terms of safety with little to no chance of anything dangerous happening when in fact the people rating them knew they were as risky as it came, again heads would roll. There would be no hesitations about prosecution. Marion Jones and Barry Bonds have ben subjected to the legal system but not those shady Wall Street dealers?

So why is it that when totally toxic sub-prime bonds packaged in large quantities through securitization as solid and reliable, finally blew up did none of the heads of the people most responsible roll? Why was there no accountability? Why were they just let off scott-free?

Worse, why were they bailed out? How does that happen? They didn't just mess up they did it knowingly. They saw these were junk bonds and they built an entire industry on the pooling of junk with stable, of taking the junk and re-rating it so pools could be resold as more lucrative and secure than they really were. They did this without even covering their tracks as though they had no problems with what they were doing.

They willingly took these risks, so why did we give them money? When politicians say it was the fault of the people taking out the loans alone they really are showing they are either ignorant, playing possum in public or perhaps have an aversion to the public. There is no way if you do a little reading up on it, you can't see what happened. It's pretty clear. How can you point the finger at the little guys alone? What kind of people do that? What kind of people campaign on the promise they will hold them accountable then don't once they get in? What are they trying to protect?

Yet even the people that acknowledged the big firms were responsible did nothing. They failed to take any action whatsoever against the people on whose desks the bucks stopped, but benefited most. This is both sides of the political spectrum. Remember all the “things will be different when I get in” and “we will not allow people that were irresponsible and ruined our economy to get away with their crimes” speeches? All the “I am with you“ stuff amounted to nothing once candidates that went around talking that way got in. In fact, when times got very conservative they swerved way right.

Fine if that's really the way they wanted to interpret things, but now that things are swaying the other way don't try and sway back towards the center or left again – not when when we saw you once already. It is as though they forget the basic point; when bailing out institutions with TARP and the other bailout measures, sending us into or keeping us in wars or conflicts of choice or spending time on the Hill making circuses out of the legislative process to garner votes, that costs us money.

We spent our tax dollars saving those institutions that are better off than they were three years ago. How many of us, the 99% can say we are now better of than we were prior to the bailouts? No one is held accountable so there's no incentive to behave themselves next time. How do they explain it? It's not just money, it's our money. Is it so small a thing to them? It is not to us.

To read about my inspiration for this article go to www.lawsuitagainstuconn.com.

 
 

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