Why Johnny Q. Public can’t pay his mortgage but can bail out Wall Street

Our system is broke. It’s now as morally bankrupt as Wall Street. The American dream is now a complete and utter farce and the belief that the people we elect actually “represent” us should be forgotten as fast as they forgot us with this “bailout”.

Johnny can’t pay his mortgage for a whole bunch of reasons- and not a single one of them is caused by mortgage backed securities or credit default swaps. Let’s take a look:

  1. The price of gasoline has doubled. Congress refused to raise fuel efficiency standards for years, and actually gave tax breaks for buying Hummers and Escalades. Oil companies have seen the largest quarterly profits known to man.
  2. The price of food has increased thanks to the lame idea that Corn makes gasoline efficiently. Corn makes pigs, cows and chickens fat efficiently- and high corn prices don’t even make corn growers fat, since they still have to buy diesel and fertilizer based on… well, see number 1 above.
  3. The price of health care has skyrocketed. Insurance which is supposed to spread the risk over large populations has instead been able to cherry pick and profiteer at will. CEOs of health insurance companies have taken home $100 million annual paychecks without so much as a blink.
  4. Real wages have declined in this country thanks to unfair trade policy and corporations being rewarded for cutting cost by off shoring labor. America, land of opportunity is now a service economy- does anyone want fries with that?
  5. Stock prices have been volatile, causing huge losses in pension funds and retirement accounts because of a complete disconnect between corporate performance and stock value. Wall Street has become a casino for banks, investment banks and insurance companies with programmed trading and massive transactional volume that has more to do with the market than the stocks of the companies that it is supposed to provide capital to.
  6. Changes in the bankruptcy laws were passed at the behest of the credit card companies (the banking industry that is now asking to be bailed out of bankruptcy). The free wheeling banks were allowed at will to jack credit card rates up to as much as 29% for a late payment, or an over the limit charge, and then when people couldn’t pay the credit card bill, the next thing that hit was the mortgage….
  7. Lastly, bankers were allowed to issue loans that made no sense- no money down, for 120% of value, balloon rates, no interest for a set time- and take fees right off the top- before a single payment was made. This is what we blame for the current mess- but it is just a small part of the puzzle.

The one thing that ties everyone of the things above together- all were enabled, ignored or caused by Congress- who has been either asleep at the wheel- or standing with their hands out to ask for campaign money from the people who have made money hand-over-fist from all of the above issues, and now are waiting for a handout from…. drum roll…. John Q. Public.

The “bailout” as proposed by these very same Congressional puppets of the uber “rich” Wall Street types who are now crying for help- does a very good job at protecting the walls of Wall Street’s house, but nothing to protect yours. No controls at all, other than stopping the captains from abandoning a very rich ship with an extra bag of loot (watch salaries rise to the people who are supposed to right the listing ships- so they don’t need a parachute because they’ve built a huge cushion to bail onto).

Let’s look at what should have happened:

  • Criminal prosecution and collection efforts of back bonuses and pay packages from all firms who have now failed or asked for corporate welfare payments. You dont’ get rich going broke in America under a sane system.
  • Caps on credit card rates of 19% for all banks that have had to borrow from the fed discount window (all of them).
  • Immediate investigations into oil company profits and oil speculation. It’s time to get serious about cutting consumption through ending government sponsored sprawl, raising fuel efficiency standards and considering out of the box ideas like a walk-to-work tax credit.
  • Treat any purchase of more than $50,000 in stock in any company that is held less than a year as a loan, with maximum return of no more than the prime rate as set by the Fed.
  • End Ethanol from corn- and allow it from kudzu or hemp or waste from sugar cane processing.
  • Put in place some sort of pay caps in the insurance industry connected to coverage of the US population. For example, until 90% of the population is covered, no executives in the health insurance industry or health care provider can be paid more than the President of the United States if accepting medicaid, government funds or given tax breaks as a non-profit – without suffering huge tax penalties. It’s time doctors, health care administrators and insurers came up with a solution or face a government intervention with a “socialized” health policy. We just “found” $700 billion to bail out banks, I’m sure we can find $700 billion to provide a higher level of health care to all than the current system.
  • Devise a formula for executive compensation that caps pay if US employment drops, payroll drops, benefits are cut or for being sold to foreign nationals. When we can’t even own our own major beer brewers, we’ve got a real problem.
  • Set formulas for a “standardized” loan reformulation. If your mortgage was non-standard, the bank can either buy the home back from you at FULL VALUE of the loan, or agree to a repayment schedule on a conventional loan set at low government interest rate for a longer period of time. This would only apply to banks that have had to ask for public money to survive. There will be a foreclosure penalty on banks, based on their reckless lending. If John Q. Public has to buy the banks bad paper, the banks should have to eat some of John Q.’s bad debt.
  • And last but not least- we need real campaign finance reform. If we can afford $700 billion to bail out Wall Street, it should be the least of our worries to take all the elections and fund them by an “ad tax”- with a percentage of all advertising dollars going to fund a public ad campaign for politicians with equal time and equal access to the voters.

The only problem here- is the voters have to be smart enough to understand when they are being lied to- like right now, when this bailout is being shoved through to their wallets without a single real concession to them. John Q. can’t pay his mortgage because he forgot to pay his congressman off.

That’s the real reason Johnny can’t pay his mortgage.

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