Andy Martin takes a negative view of President Bush’s speech
“Just say ‘No’ to President Bush’s Bailout,” says Andy. He remains unconvinced by Bush’s Wednesday speech and says Senator John McCain is headed in the wrong direction. Andy says he would be terrified to vote for the Bush Bailout. Martin says the financial “crisis” is a self-inflicted wound of government incompetence and mismanagement. Let the markets do their job.
Andy Martin on the U.S. financial “crisis”
Just say “no” to a Wall Street bailout: Part Two
President Bush did not convince Andy Martin to support the bailout
“Factually Correct, Not
AMERICA’S #1 POLITICAL
BLOG ON THE 2008 CAMPAIGN
We’re not always first because we’re #1;
We’re #1 because we are always first.
ANDY MARTIN: I LISTENED TO PRESIDENT BUSH AND HE DID NOT PERSUADE ME
IS SENATOR JOHN MCCAIN HEADING IN THE WRONG DIRECTION?
(NEW YORK)(September 25, 2008) I have been involved in politics and business for over forty years. It’s long enough to have seen lots of ups and downs. I remember the 1966 recession; that slump removed the Democrats’ “Thousand Year Congress,” after two years, and helped put Republicans on the road to victory. The wage and price controls of the early 1970’s? They were an accident waiting to happen; and it happened.
The stratospheric interest rates of the late 1970’s? They broke me financially; imagine what it’s like to be getting a letter from your bank almost every day, saying your “floating” interest rate went up again. The interest rate was floating and soon enough I was too. The recession of the early 1980’s? One to die for.
But I also remember opening our first office in the World Trade Center on January 1, 1974. Soon thereafter New York City went bust. Things did not look very bright. Three years later New York was in a real estate boom. Prices skyrocketed. There was a real estate slump in the early 90’s, followed by another boom.
When I graduated from college in 1966 I went to an experienced real estate investor for advice. He told me he was not buying property until interest rates fell below 6%. That took a third of a century. He had along wait. In the meantime, I made money.
And so, yes, I have seen a lot of ups and downs in the economy.
I have a friend who is a stock market investor. She went to cash over a year ago. “Better too soon than too late,” she said. Smart girl. She also lost a pile in the “dot.com” disaster. Not so smart.
Which leads me to Wednesday night.
First, President Bush’s face had a curiously flat appearance. He didn’t look the same as he usually does. Was he afraid? Dieting? Tired? Trying to be super-serious? I have no idea. Anyone have a lead on why Bush looked the way he did?
Bottom line: President Bush did not convince me we need a bailout. And he did not convince me his proposed bailout or a reasonable facsimile thereof is the right approach.
If we are going to be asked to invest $700 billion, where is the upside? The president offered none.
He proposes to buy about 5% of the bad debt being held by some institutions. What about the other 95%? That appears to be good debt. Ninety-five percent good isn’t bad. In any economy.
What about the big guys? Warren Buffet has already locked in almost a half billion-dollar profit on his latest Wall Street investment. He gets a 10% interest rate and equity kickers. What do we get for providing what Buffet calls the foundation capital? Nothing.
Excessive executive salaries? I guess Bush caved on this one. I hope. Let me see the fine print. So far there is none.
Supervision of any government fund? No one has produced any draft of a proposed law that imposes stringent review both on “The Begging Bankers” and the government bureaucrats who are going to manage the public’s $700 billion “asset.”
What makes me really suspicious is that the same people who broke the United States are now bidding to manage the $700 billion pool of assets. I believe any law should mandate that no firm that was responsible in any way for the losses, or has received any assistance, can bid for any role in the management or supervision of the $700 billion bailout fund. Why should the people who got a “cut” when they were cutting our throats, now get a “cut” for supposedly sewing us up again? That’s not right.
Treasury Secretary Paulsen has suggested the bailout is not fair, but that we still need to proceed. Respectfully, I dissent. If it isn’t fair, we should not be taking on the burdens of the bailout.
Once again in his presidency, President Bush may have been misinformed. He painted a bleak picture Wednesday night of factories closing, Main Street disasters, a dark and dreary economy if we don’t bailout Wall Street. Supposedly no one can borrow to buy a car, buy a house, blah, blah, blah. That’s just not true. It is true that borrowing standards have been raised; that’s all to the good. People have learned to be impatient about demanding possessions. Now they can afford to wait. Just ask Fox News’ Bill O’Reilly.
Lehman Brothers went bust just over a week ago. Thousands of jobs have been saved already. New buyers have come in and salvaged the value that was left by the former owners. The entire process has been orderly. And fair. The old management is largely gone. And all of this was accomplished without a penny of bailout assistance. Personally, I would have rescued Lehman in an ad hoc package, but I am not complaining about the way the federal government sat on its hands and allowed the market to act.
They say the market isn’t working. Just tell that to the people who bought Lehman’s assets. They’re not complaining about the market not working.
All of us owe money to banks or financial institutions. October 1st? We have to make mortgage payments, car loan payments, credit card payments. Bush would have us believe that banks are taking in money, and not lending it out. Not true. But suppose he is right; suppose banks are sitting on all the cash that flows in every day from interest and principal payments. Aren’t those funds an immediate cash infusion? If the cash is not going out again, it is sitting in the vault. Nothing wrong with that. Stockholders will create pressure to lend soon enough. The market does work.
There is a complete inconsistency in what Bush and the hysteria merchants are saying about imminent chaos. If banks are getting money in every day, and not lending it, they are creating their own bailout fund. If they are lending out the money they receive in every day, they are earning new returns at higher market rates, and replenishing their capital. Remember, even the Cassandras say 95% of the loans are still solid. Again without any bailout.
When the history of this era is written, America will be seen to have been brought low by self-inflicted wounds and government-induced hysteria and incompetence. In early 2007, when I saw government officials attacking the sub-prime lending industry and destroying active companies, I asked myself “Why?” If even 10% of the loans were delinquent, 90% of the loans were not. Why topple an entire industry, throw tens of thousands of people out of work and panic the entire economy because loan losses were right where they should be on the sum-primes? But that is what Federal Reserve Board Chairman Ben Bernanke did.
By all means prosecute the crooks, but don’t punish the innocent borrowers. After all, subprime borrowers would normally be expected to generate higher losses. You don’t need an econometric model to understand that basic fact. But 90% of the borrowers were living in their homes. And paying their mortgages. Government attacked. Federal regulators created panic where there was no basis to do so. And so we are living through a self-inflicted financial crisis of government incompetence and mismanagement. Now the people that created the unnecessary disaster have given us 96 hours to accept their latest solution.
Since early 2007 the hysteria has been fed by government bureaucrats seeking to pull the financial reins too tight and all at once. People are no different than horses. They say Ben Bernanke is a financial genius. I wish he had 1/10th of my real world financial experience. I tried a lawsuit at the Federal Reserve Board 35 years ago, so I know a little about the place. If you ask me, Bernanke is an idiot. If you pull too tight, too soon, without any warning, you get a reaction. And we are. But it is all unnecessary.
I worked in a bank while I was a law student. I was a part-time assistant in the installment loan department, when such departments existed. I started as bill collector. I was taught how to collect, and later how to lend. We went out repossessing cars, property, etc. I learned when to yank a borrower’s assets, and when to work with them to salvage a credit. My immediate supervisor was a crook, which helped. You can get a lot of real world experience from underhanded people. I learned what to do as well as what not to do.
I also worked in bank acquisitions. I can tell you, banks that take in money and don’t lend money will go out of business. So Bush’s threat that bankers will not lend without a bailout is sheer nonsense.
I also have a lot of practical experience in the financial world, not to mention having bought my first shares of stock over 50 years ago (even though I’m only 39).
And I am totally unconvinced by President Bush’s Bailout.
No wonder the politicians in Washington are scared to vote for Bush’s proposal. I would be terrified. The Bush Bailout could turn into a Republican Candidates’ Self-Destruction Program.
But, hey, that’s why we call this Internet newspaper “Contrarian” Commentary. Lawyer, economist and law school bill collector. I have done most all of it, and I speak from Main Street experience, not the lofty heights of Washington tax-exempt think tanks or a lifetime working on Capitol Hill.
As for Senator John McCain’s latest approach, it goes against my advice. Other than that, I can’t say. I said yesterday that McCain should use convert his latest “liability” into his greatest opportunity and separate himself from the Bush administration. McCain should simply say “no” to the bailout. McCain has chosen to go in the opposite direction. With twenty-four hours of hindsight, and after listening to Bush’s speech, I think my advice to McCain makes a lot more sense than the approach he is pursuing. We’ll just have to wait and see who is right.
Readers of Obama: The Man Behind The Mask confirm this book is the intelligent bestseller about Barack Obama, and the only practical handbook on his unfitness for the presidency. Buy it.
Buy now: Immediate shipment available from Amazon.com. Signed copies of the book from: http://www.OrangeStatePress.com. Also available from http://www.BarnesandNoble.com
URGENT APPEAL: The Committee of One Million to Defeat Barack Obama is raising money to fight Barack Obama. http://CommitteeofOneMilliontoDefeatBarackObama.com. Please give generously up to the maximum of $100. Our ability to fight and defeat Barack Obama is directly dependent on the generosity of every American.”
The Committee of One Million to Defeat Barack Obama limits itself to $100 maximum contributions; there are no bundlers, fat cats or illegal contributions. Obama is opposed to everything America stands for,” says Executive Director Andy Martin. “But while Obama has raised more than a third of a BILLION dollars, his opponents have raised virtually nothing. We can’t just sit back and expect John McCain to do the job all alone. Americans can either contribute now, or pay later. If we do not succeed, Obama will.”
FULL DISCLOSURE: I have decided to oppose Barack Obama’s election and have become Executive Director of The Stop Obama Coalition, http://StopObamaCoalition.com and CommitteeofOneMilliontoDefeatBarackObama.com. By default, I have become the national leader of the anti-Obama movement. I am not acting as either a Democrat or Republican. I have had no contact whatsoever with the McCain Campaign. The views expressed are entirely independent of McCain. I am not a member of any political organization. I am acting as an American citizen who sincerely believes Obama is not the man we need in the Oval Office. We are running a very dynamic and aggressive campaign against Obama. We know how. We are the recognized experts in the field. I will, however, continue to write my columns for ContrarianCommentary.com. /s/ Andy Martin
Andy Martin is a legendary Chicago muckraker, author, Internet columnist, radio talk show host, broadcaster and media critic. He is currently based in New York selling his new book, Obama: The Man Behind The Mask. Andy is the Executive Editor and publisher of http://www.ContrarianCommentary.com. © Copyright by Andy Martin 2008. Martin comments on regional, national and world events with over forty years of experience. He holds a Juris Doctor degree from the University of Illinois College of Law.
His columns are also posted at ContrarianCommentary.blogspot.com; contrariancommentary.wordpress.com. Andy is the author of Obama: The Man Behind The Mask, published in July 2008, see http://www.OrangeStatePress.com.
MEDIA CONTACT: (866) 706-2639 or cell (917) 664-9329
E-MAIL: AndyMart20@aol.com [NOTE: We frequently correct typographical errors and additions/subtractions on our blogs, where you can find the latest edition of this release.]