Bailouts

[Fenrisúlfr]

There has been much banter about a housing bailout in the Kreml...er...Kongress. If they are able to use the people's money to provide moral hazard to those who were reckless with theirs and the banks' money, then the incentive to be careful and prudent with one's own funds is diminished. Additionally, the ones paying for this moral hazard will not be the elites (two words: Cayman Islands), and not the paupers (they have none to take anyway)...it will be the middle class who shall and already is paying, already strained by increased fuel, commodity, healthcare, and education costs as a result of a weakening currency and over-regulation of the economy.

The American Constitution is missing a word. There was a word left out that our Founders failed to recognize as important. The word is "Bailout." There is nothing in that document that allows the government to bailout someone whose house burned down, or a car company, or someone with medical problems, or someone who spent too much on a house they could not afford, or a bank that made bad loans.

Why did the founders overlook that crucial word? After all, we use it all the time now.

Because it is popular with the crying and compassionate crowd, government is supposed to take care of anyone who stumbles. Of course, everyone knows people will take risks that lead to stumbles, since they know taxpayers are going to pull their chestnuts out of the fire.

If government's role is to take care of its people, help those who crash their cars to get a new replacement, or those who gobble up too much fats and sugars to buy clothes that fit and ramps for their wheel chairs, what responsibility do the governed have for their own lives? If none, how did America ever become so free and prosperous.

Where, in our Constitution should we insert the word "Bailout?" Perhaps we could use that word in the Preamble to follow "General Welfare," not that the Preamble is anything other than an introductory statement, rather than law. Maybe it could be in Section 1 that describes the legislative powers vested in a Senate and House, and add, "Who shall then be in charge of bailouts."

I would be interested in knowing what the constitutional scholars think of this word "bailout," and where it should be placed in the Constitution. Judging only from all the run-up documents preceding the Constitution, and the statements of those founders, other than Hamilton, I can find no source for interest in inserting that word.

Oh well, no one really pays attention to the Constitution anyway, so who cares?

 

[razoredge]

Yet another narrow scope. Those in trouble are those trapped in the faux economy and its extended credit supercharger that was shoved down our throats by our very own governments and corporate entities... all in the name of making it appear capitalism was a awesome thing and the future was bright with globalism et all.

HellfuckinOh !

 

[Fenrisúlfr]

The credit supercharger is the government, and is not free-market by any means. It is a very simple process:

Government borrows money, issuing bonds.

The Federal Reserve takes these bonds onto its books and issues currency (Federal Reserve notes) against them.

The money supply increases, the supply of goods remains stagnant (or relatively stagnant); supply and demand adjusts to a higher price level.

The gold price alone is an indication. However, I have no problem with this. It is Darwinian: nations rise, nations fall, that is how it has been and that is how it shall be. As the people have become too insipid and lacking of even the most rudimentary knowledge to keep their government in check, this nation will fall, and I shall not shed a tear, and will in fact laugh my ass off (at the best distance money can buy) the day the dollar finally dies.

 

[razoredge]

the credit supercharger goes far beyond government

the rest of your post has little bearing on the entire problem or how it came to be. When off shoring began is when this country began to fall. It was just a matter of time before too much was sold off to reverce the trend. Now we are coming to the conculsion of a country that allowed its elite to sell us across borders.

We dont belong in Iraq, we belong in your Cayman Islands and any other place of income tax evasion, confiscating the money and jailing the offenders. But we have a government that protects the "elite" because they all sleep in the same bed. Its nothing different than a Union, only it protects those that contribute nothing to society.

 

[Fenrisúlfr]

When the tax rates became pernicious, it necessitated offshoring of finances just to remain competitive with other countries' industries. It is merely an indication of such a decline rather than the cause per se.

As for an invasion of the Cayman Islands: you wish. They have cooperated against tax evaders in the past; only amateurs hide money in the Caymans. Let the tax evaders take their medicine; it's what they get for not using the numerous legal loopholes I use on a daily basis & which any accountant worth his salt could drive a gold-plated panzer through. Tax avoidance is perfectly legal, and provides the best of both worlds.

 

[razoredge]

They are all the same, tax evaders, theifs of pension funds, theifs of others fair wages.

The industries of other countries never should have been allowed in this country, we should have remained self sufficient rather than an economy based entirely on consumption of foreighn goods not our own production and use there of. Now a large percentage of Americans are dancing with the third world, who never lifted a finger to improve their own country.

All brought to us by corporate clowns and wallstreet types only looking for cheap labor and new environments to contaminate, and a quick buck, supported fully by our own government. Same people that make sure such loop holes exist. Because they all sleep in the same bed.

Its no surprise that those involved with the fall of the counrty would sit and applaud when successful, they got rich in the process, no matter to them.

We used to hang traitors in this country.

 

[Fenrisúlfr]

It is such heavy-handedness that made business go elsewhere: increase the cost of doing business to levels at which American industry cannot compete and they will stop doing such business.

As for looking for cheap labour, everyone else is. If there are 10 Chinese workers that each can manufacture 1 widget per hour for $1/hr, and 1 American worker who can produce 15 widgets per hour at $15/hr, it does not matter if the American is more productive if the cost of doing business is lower in China. If one does not implement the more profitable business model, someone else will and drive one out of business! If the Americans cannot compete, that is their problem, but there is nothing that says one must adopt a profit model that would be economic suicide. The US has one of the highest corporate tax rates anywhere, the most red tape to slice through outside of western Europe (moribund anyway), and a horrific business climate. Clean that up and the factories may re-open.

Yes, the country is falling, and yes, I'm cashing in on it. Today, I made $2'000 off your currency not being worth the paper it is printed on; yesterday it was more, and I did so without having to take a shower. (My currency is gold btw, though I use $ for operating expenses) We on Wall St. know which side of the bread the butter is on, shame you don't. No treachery was involved; I'm not crashing this thing, I'm just riding the wave.

 

[razoredge]

But you ignore the root of it. This country was smooth even flow until the 70's when this crap began. We didnt even need two income families. We could afford American made products because we had the wages to support such purchases. We were in essence supporting each other. Until a handful of already fithly stinking rich decided they needed more and selling our assets had huge money in it. So much of the stuff put on shelves today is just junk, we are only getting our moneys worth and its going to the wrong places.

 

[Fenrisúlfr]

If I recall, around the 70s, that is when all this liberal welfare-statist nonsense intensified, as if the beast Roosevelt sired was not bad enough already.

American-made, from what I was advised, has gone to shit ever since then. If the US could compete in a global economy, we would be running a trade surplus, but it's too bad: the market has clearly spoken; the country's fate is all but sealed.

Obama's going to look like friggn' Hoover when it's all said and done. Thankfully, I shall study Chinese further once summer classes have ended; someone's got to buy what's left

 

[razoredge]

The work force cant compete in a global economy because we live in the States. We are also to a large degree "the market" due to our government and corporate advertising propaganda acclimating us into the consumer mentality. The entire system of this country they built has its hands around our throats. most of the entire thing has been a smoke screen. Take steel for example, they needed to crush the steel unions, now China owns the steel industry... yet steel prices have gone up 400%, there was no benefit to having done that, just a matter of principles and profits for stock traders. This is the problem with the entire stock trading system, the lazy get the rewards and chaos surrounds. Investment is one thing, trading is another. A solid well established properly managed business needs no investors .

 

[Fenrisúlfr]

Steel prices have gone up on account of increased demand from the thriving economies of China and India, as well as other emerging economies. Supply and demand; speculators such as myself are merely intermediaries.

You are right, the workforce cannot compete because we are in the States; the land of red-tape and bullshit that can barely keep the lights on.

As for investors in industries, who do you think actually owns the business? Shareholders do; the share price itself is the collateral as the company can always dilute the market with more shares if it requires capital.

Besides, I am not lazy. I am highly skilled in what I do, and in a few instances I have given advice to ex-co-workers in the UAE.

 

[razoredge]

which would have nothing to do with steel prices in the US if the industry was still here or then if it did it would be a benefit to Americans not a boat anchor.

Red tape has nothing to do with living in America, its the cost of our ecomomy, housing, rent, transportation, insurances, utilities. Labor wages havent moved in 20 years yet everything else has skyrocketed 2-3-4oo %

Shareholder as an investor is one thing, trading stocks every 5 minutes creates economic chaos. Whats done on wallstreet everyday has little to nothing to do with dayly life and getting any particular job done... yet it all governs where the economy of entire populations stand. Like some big game that doesnt need to be played. Anybody that has ever been in business and dealt with a hands off "investor" knows they are nothing but trouble, are clueless about the operation yet feel the need to make decisions, very very bad decisions. So many solid industries have been run into the ground by these kinds of people.

Any profitable industry needs to free itself imeaditatly of investors even if by means of shotgun. They are nothing but the chain and anchor around the neck of industry. These games became out of control and obvious in the 80's but everyone turned the blind eye, even though it was present in all forms of media, before our eyes. Now today we pay the price. A land of consumers that produce little. Gonna be funny when it bites the complacent office workers and "tech" industry in the ass too, they have already felt it some and then suddenly the same people that said blue collar got what it deserved started cryin'. They are only sweeping up the crumbs for now, then they will no longer be needed.

All of this is why people are loosing homes, going bankrupt, auto repos and the likes. Because it was all a faux economy that could not survive without also being a productive more self sufficient nation.

 

[Fenrisúlfr]

The industry is not in the US because it is not beneficial for the steel companies including their shareholders. This goes perfectly with the red-tape aspect: it increases cost of doing business and therefore prices, but reduces demand for labour because less business is being done. As for prices, keep in mind what Friedman said: inflation is a monetary phenomenon; if they keep printing money out of thin air, of course prices will go up!

Any profitable industry is owned by shareholders, so what shall they shake off? Themselves? Laughable and utterly simplistic; it is apparent someone did not pay attention in economics class...oh wait, it was probably not 'WORK oriented' so it was likely not offered.

Someone should have gone to private school.

It is people like you who make people like me have to look overseas for jobs, because they are not being created here. Keep regulating and taxing everything to death and it will wither and die, just like the auto industry!

Regarding consumption: the US dollar's status as a reserve currency delayed the reaction, thus allowing for these deficits. Now, countries are diversifying out of the dollar and instead of holding bonds, they are buying companies through sovereign wealth funds...thus instead of sitting in vaults, the dollars are floating around chasing assets, accelerating the inflation. Face it: yours is now just another chicken-shit third rate nation.

If this nation even could be self-sufficient i.e. maintaining a trade surplus, it will be under a libertarian reigme maintaining a gold or silver (or a bi-metallic) standard.

 

[razoredge]

What steel companies was it not of benefit too ?
What increased the cost of production ?
where is less business being done ?
how is inflation relevent to everyday life ?
what does a shareholder know about running a business ?
Twinky

What do I have to do with work for "people like you" being overseas ?
Should people like you being overseas bother me ?
Simple regulations and taxs will eliminate across border prospectors and those that still go would be no loss, just like one less welfare mouth to feed.
The "value" of the dollar mattered none until all these gamers started playing where they didnt belong, it has worked well for them at the expense of the country, nothing more than legalized larceny, it was the cause not the answer
Gold or silver should mean nothing unless for jewelry. Money is nothing but the value of ones labor to the other, a monetary form of barter, this would also quickly eliminate the non contributors and get us back to natural selection

 

[Fenrisúlfr]

In order:

Apparently Bethlehem Steel and US Steel.

The costs of production increased on account of rising wages and input costs that could not be passed along to customers.

Less business is being done in the US and in Europe on account of slowing (arguably contracting) GDP.

Inflation is relevant on account that it increases the price of consumer goods.

A shareholder does not run the business, that is the job of the CEO and the management who report to him. Shareholders have a vested interest in ensuring the value of their investment, and thus through corporate governance can throw out or install a new CEO. I should not be telling you this; the fact that I must answer these questions indicates a lack of common knowledge on your part.

You should be concerned when the elites start packing up or laying plans to do so as it is a sign of reversal of the nation's fortune. We want to see this country doing well as we do not want to be bothered to have to pack up and set up shop elsewhere every time the idiot peasantry decide to wreck the economy.

The value of the dollar mattered not on account that 1 oz. gold used to equal $20,67. When the Federal Reserve started inflating everything to death and currencies floated against one another, that is when the trouble started.

Regulations to eliminate cross-border speculation will wreck the economy, as domestic capital will seek greener pastures elsewhere, foreign capital likewise. This will cause the demand for dollars to pale in comparison to supply on the black market. This will mean interest rates of both government and corporate debt will spike, not just on account of lack of capital, but increasing inflationary expectations. This means companies will be unable to raise capital on neither the stock nor bond markets, it will bring what is left of this cesspit to a halt.

I will have no more of this petulance unless by some miracle you are able to utilize sufficient cranial capacity (which is either unused or simply not present) allowing one to undertake one's own due diligence in matters economical. Your public education has failed you; let it be your undertaking to succeed where the state has failed.

 

[razoredge]

In order:

Prices have been passed on to the US consumers to the tune of 3-400%, just the shipping costs of moving this shit halfway around the world and back is obsurd. Inefficency at its finest

Less demand for steel in the US would matter none if we made our own

Once again tell me how "inflation" has anything to do with dayly life.....

Share holders do run industries, you just said they appoint CEO's, so here you have an full set of morons in charge.

The idea that I have to explain any of this to you shows your delirium from written words and 0 hands on experience watching "The Cheifs" stumbling all over each other.

As the elites started packing up and boarding the jets or ships I would be ready to meet them, confiscate all their property here and abroad and throw them in a cell full of big black bucks, where they can be treated as the common criminals and ENLARGENED assholes they are.

Problem solved

 

[Fenrisúlfr]

If I recall, Hitler ordered the confiscation of property of the Jews. It is also part of the Communist manifesto that the property of emigrants be nationalized. This impudent nincompoop is likely more totalitarian than both Hitler or Stalin.

 

[razoredge]

the truth sucks doesnt it, a thief is a thief and responsibility demands consequences

nothing to do with a specific set of people, just responsibles people but nice propaganda routine anyhow.

 

[Fenrisúlfr]

Now he alleges that my not addressing him, on account his unfathomable petulance and stupidity as stated before, is an admission of guilt. This from the same one who alleged a question that was plainly answered before was not even answered.

How much longer will this continue? Let us find out.

 

[razoredge]

Now he alleges that my not addressing him, on account his unfathomable petulance and stupidity as stated before, is an admission of guilt.

What ?

This from the same one who alleged a question that was plainly answered before was not even answered.

and what ?

are you looking over your shoulder to see whos got your back, because you seem to be talking to people that are not here. As could be expected from a Twinky.

So yes how long will this denial of yours continue ? How long will you insist that the damage done to this countries profitable industries was done for no other reason than a quick buck. Irreversable damage for the profits of the few. Stole peoples jobs, stole their retirement funds, I wont get into the more personal snowballing effects.

Everyone knows selling off everything they have, the house, the car, and all other items will leave them with a pocket full of money. But alas they will have to start again and can not repurchase what they bought for what they sold. There is one aspect that is exempt from this, those that can sell and buy other peoples futures and walk away with the pocket full of money from decades of established assets. Much like the little worthless spoiled rich kid who squanders generations of a familys wealth and a well established business so he can party all day.

We were warned in the 90's about what would happen with IFTA and it has held true. The reality and imeadiate effects of it were masked with extended lines of credit and the "tech" industry for some but now today the makeup is becoming smudged on the dirty little bitch and we begin to see the her ugly face.

All propaganda, shoved down the peoples throat by "investors", corporate entities and their bed buddies the Federal Government, those with campaign donation agreements who sit at expensive diners together.

If you want to call it unfathomable petulance and stupidity for not swallowing this bullshit, its fine with me, I'll take it as a compliment.

Crying about "bailouts" after the fact of what was warned about and was more than obvious is only to be expected from those that promote the aforementioned.

As I have stated many times I would have gone for not allowing it to happen and "bailout" would not even be a thought on anyones mind. The only difference would be a few less extremely wealthy... big loss... that