Bailout Failure

September 29, 2008

The democratic system has failed to rescue the nation at the hour of crisis. The party bickering and “partisan politics” has taken precedence over “main street” struggles. It is clear from the action of the legislators voting against the “emergency” plan that their concern for the return to power is paramount than the “average citizen’s” livelihood. The explanation for their refusal to cooperate does not resonate with the realities in the “main street”. The nature of global economy is slighted with distracted opinions and determined position in this crucial legislation.

Excerpt of one of the legislators reason to vote against the bailout.

Source : Democracynow.org – Thank you.

According to Democratic Congressman Rep. Dennis Kucinich – “Is this the United States Congress or the Board of Directors of Goldman Sachs?” Rep. Dennis Kucinich Rejects $700 Billion Bailout
The House is set to vote today on a $700 billion emergency bailout plan for the financial industry. The proposed legislation was forged during a marathon negotiating session over the weekend between lawmakers from both parties and Treasury Secretary Henry Paulson. The 110-page bill would authorize Paulson to initiate what is likely to become the biggest government bailout in US history, allowing him to spend up to $700 billion to relieve faltering banks and other firms of bad assets backed by home mortgages, which are falling into foreclosure at record rates.

AMY GOODMAN: Right, but the Democrats are in charge of this.

REP. DENNIS KUCINICH: Right. You know, I’ll tell you something that we were told in our caucus. We were told that our presidential candidate, when the negotiations started at the White House, said that he didn’t want this in this bill. Now, that’s what we were told.

AMY GOODMAN: You were told that Barack Obama did not want this in the bill?

REP. DENNIS KUCINICH: That he didn’t want the bankruptcy provisions in the bill. Now, you know, that’s what we were told. And I don’t understand why he would say that, if he did say that. And I think that there is a—the fact that we didn’t put bankruptcy provisions in, that actually we removed any hope for judges to do any loan modifications or any forbearance. There’s no moratorium on mortgage foreclosures in here. So, who’s getting—who’s really getting helped by this bill? This is a bailout, pure and simple, of Wall Street interests who have been involved in speculation.

AMY GOODMAN: Congressman Kucinich, can you explain how it is that the Democrats are in charge, yet the Democrats back down on their demand to give bankruptcy judges authority to alter the terms of mortgages for homeowners facing foreclosure, that Democrats also failed in their attempt to steer a portion of any government profits from the package to affordable housing programs?

REP. DENNIS KUCINICH: Well, I mean, those are two of the most glaring deficiencies in this bill. And I would maintain there was never any intention to—you know, well, many members of Congress had the intention of helping people who were in foreclosure. You know, this—Wall Street doesn’t want to do that. Wall Street wants to grab whatever change they can and equity that’s left in these properties. So— .”
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Review: There is no disagreement in this context. However, the repercussions of failing to act is far greater than the stakes involved in the initial bailout that is being carried out cautiously and judiciously by the remaining members of the “Congress”. The legislators’ rhetoric does not serve the purpose as the U.S economy is the engine of the global markets and the ripple effect is already felt in Europe and worldwide. Today’s plummeting of the stock market is yet another sign of the “financial catastrophe” at our doorstep.

With respect to the elimination of “bankruptcy provision” as discussed in the above interview, the “Democratic Presidential Candidate”, i.e. Senator Barack Obama’s position is apparent in the “housing market” debacle. It is time for the Democratic Party to be forthcoming to the democratic base as well as others and explain the reason behind such notion to alienate the worst hit population i.e. the “homeowners” in this bailout proposal.

As for the GOP members of Congress, defying the national interest by voting against the bailout proposal, the following questions arise,

1. Where were the legislators when the economic meltdown was happening under their watch?

2. Why did they not alert their own party and the administration that is notorious for reckless
policies and “bankrupting” the economy under their reign of power?

3.Whatever happened to the passion and pessimism about the “Wall Street” performance leading
the world’s economic power on the verge of collapse?

Alas, “Rip Van Winkle” is awakened by the financial “thunderbolt” and causing havoc in the “Capitol Hill” , the heavenly abode of the legislators.

Ironically, the two extreme political factions appear to come in terms with agreement on a single platform , i..e. protests the bailout and attempts to derail the entire economic infrastructure. The spectacular performance is to earn voter confidence and retain power for further economic disasters.

It is time to focus on the dire situation and market reaction in the United States and worldwide that is beckoning to act promptly and effectively by facilitating liquidity in the financial market.

The lawmakers concerned about taxpayers must also realize that taxpayers’ investments are the major casualty in the current political fiasco.

It is the duty of every legislator to put “partisan politics” aside and act diligently by coming forward and resolving the national and world financial crisis in the best interest of the people, responsible for their power.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Business | Leave a Comment 

Congress Adjournment

September 29, 2008

Review of the current article on;

Congress moves to adjourn with no deal on AMT

By JIM ABRAMS, Associated Press Writer 25 minutes ago – Thank you.

WASHINGTON – The House prepared to adjourn for the year Monday with no deal on a major tax relief package, increasing the odds that businesses will lose out on critical tax breaks and millions could get hit by the alternative minimum tax this year.

House Majority Leader Steny Hoyer, D-Md., suggested that it might be next year before consensus can be reached on a tax initiative that includes adjusting the AMT, providing tax relief to disaster victims and extending tax credits for renewable energy development, business investment and individual education and child care costs.

Lawmakers in both the House and Senate stressed that the bill would create tens of thousands of jobs and contribute to the nation’s energy independence. But House Democrats insisted that more of the package, totaling $138 billion in House bills, be paid for so as not to increase the deficit. Senate Republicans, averse to new taxes, said any changes in the Senate-passed tax bill would kill the entire package.

The House “has taken the morally and fiscally responsible position,” said Rep. Mike Ross, D-Ark., a leader of the 49-member Blue Dogs, a group of fiscally conservative Democrats. Meanwhile, “Republicans in the Senate continue to hold up this important legislation,” he said.

As Ross spoke, across the Capitol Senate Majority Leader Harry Reid, D-Nev., tried to bring up a House-passed bill dealing with renewable energy and extension of business and individual tax breaks that expired last year or will lapse at the end of this year. Republicans objected to consideration of the bill.

Reid acknowledged that “we can’t get it done” because Senate Democrats don’t have the votes to move the bill without GOP cooperation. He said he hoped the Blue Dogs “would understand we are not trying to embarrass them or anyone else.”

Hoyer, joining the Blue Dogs at a news conference, said “there’s not an intention” to return to Washington after the House votes on the financial bailout bill and adjourns Monday afternoon.
“I’m going to continue to work with Sen. Reid to see what can be done even if it is next year,” he said.

That delay would be a blow, at least temporarily, to a wide group of business and individual taxpayers. Without congressional action, those affected by the AMT, originally aimed at just a few very rich tax dodgers, would grow from around 4 million to up to 26 million. Those hit by the tax, most earning less than $200,000, would pay an average extra tax of $2,000.

The solar industry alone has estimated that it could create more than 400,000 jobs if it receives an eight-year extension of its investment tax credit.

“With hundreds of thousands of American jobs and billions of dollars in clean energy investment at risk, we urge congressional leaders not to leave for the election recess” until reaching an agreement, the CEOs of national hydropower, geothermal, solar and wind energy associations said in a statement.

Business groups have warned of serious repercussions if Congress does not renew the R&D credit, which expired at the end of last year, and various advocacy groups have pleaded for renewals of individual tax breaks affecting those paying college tuition, those from states with state and local sales taxes and teachers with out-of-pocket expenses.

The Senate last week, on a 93-2 vote, passed a massive package that included AMT relief, $8 billion in tax relief for those hit by natural disasters in the Midwest, Texas and Louisiana, and some $78 billion in renewal energy incentives and extensions of expiring tax breaks. In a compromise worked out with Republicans, the bill does not pay for the AMT and disaster provisions but does have revenue offsets for part of the energy and extension measures.

That wasn’t enough for the House, which insisted that there be complete offsets for the energy and extension part of the package.

Fiscal irresponsibility was a major factor in Wall Street’s meltdown and the need for Congress to step in with a bailout plan, said Rep. Dennis Cardoza, D-Calif. “It’s time for us to say no more.”
The House included steps to boost tax revenues from the oil and gas industries and close loopholes used by hedge fund managers and corporations to avoid taxes on their overseas incomes.
Senators also included in their bill a far-reaching measure to ensure parity in insurance benefits for mental health problems.
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Review and Analysis: The democratic society exercise voting rights to elect a representative in Congress and Senate to address issues affecting their daily lives and pass necessary legislation to primarily benefit the people through businesses and other economic infrastructure.

The legislators’ “priorities” from the above article should be of concern to the constituents. Their decision to leave for the election recess “after having returned from a long recess in August”, without reaching an agreement on issues like energy independence, tax relief to millions in small businesses, education and childcare costs reflects minimal importance to major economic crisis.

With election around the corner, it is important for legislators to recognize their obligations to the electorate and fulfill the commitments in restoring the nation back on track. In a gloomy economic climate, that is saddled with multi-trillion dollar debt conveniently passed on to the hard working lower and middle income groups struggling to meet ends, vacation should be the last thing on the mind of the lawmakers.

The electorate should demand that their elected officials resolve all of the above issues related to tax initiative that includes adjusting the AMT, providing tax relief to disaster victims and extending tax credits for renewable energy development, business investment and individual education and childcare costs with no further procrastination.

To quote the House Speaker “Nancy Pelosi” at the announcement of bailout deal “The Party is over” not just for the “Wall Street” but the entire “Power” specifically elected for policymaking and solving problems confronting the nation at all fronts.

When the “Presidential candidates” are advocating “performance based” salaries for “teachers” and others , the same principle should apply to “Washington” and “Wall Street” that are primarily responsible for the current economic mess.

The voter frustration and disappointment with “Washington” and “Wall Street” should be clearly demonstrated in the forthcoming electoral process.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Energy, Featured | Leave a Comment 

Economic Security

September 28, 2008

The legislators are currently addressing the financial crisis confronting our nation and it appears that a consensus has been reached to bailout the Corporations from the burden of bad debts. According to the lawmakers, the “bill” is structured to largely benefit the taxpayers and assist with the stabilization of the financial market.

It is important to recognize the fact that the twenty first century economy is a global economy and the investments are tied to one another directly or indirectly and traded in the global markets. Therefore, it is vital for the U.S. economy to remain stable and provide necessary market assurance to both domestic and foreign investors with stakes in U.S. investments.

The other important factor for the unprecedented government intervention in a “free market” environment is to eliminate loopholes to avert such catastrophe in the future. When the actual agreement proposal is presented to the taxpayers, it should reflect the absolute protection of the taxpayer’s funds and profitable return on any investments.

At the same time, politics should not take precedence over “American taxpayers” interest in terms of “Appropriation of funds” for a certain political faction like “ACORN” or for that matter a “private sector” from the “Wall Street” with any misrepresentation to provide insurance on the “mortgage backed” securities with no prospective buyer in sight.

The “bill” must include provisions for full disclosure of the deals regardless of the nature and size of the bailout amount.

Further, it is essential for the “impending bill” to fund the bailout in “installments” rather than a lump sum settlement as it would indicate the initial results on the venture carried out on a “trial and error” basis. This would also allow public opinion to analyze the “pros and cons” of such investment and facilitate the required liquidity in the financial market with a “majority” approval.

The task ahead of our nation is to restore economic security with the revival of the “housing” and “job” market. As stated earlier, the “housing market” crisis is directly related to the “credit crunch” and “subprime mortgage” failure leading to “foreclosures” and that could be resolved by overhauling the lending practices and assisting the “homeowners” with affordable revised mortgage package. The foreclosed homes should be made available for sale to potential investors with verifiable income and credit history.

Commercial lending should resume freely yet carefully to promote and revitalize the small businesses and Corporations relying on credit for the growth and development in the job market. The flow of goods and services without any disruption will contribute to the anticipated growth and help the nation in reducing the multi-trillion dollar debt due to trade and budget deficit which otherwise will be the inevitable burden on the next and future generation.

It is time to focus on this crisis as “national” rather than “individual” and collectively deal with the issue for a better future of all.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Economy, Featured | Leave a Comment 

Why is Peace rejected by the World?

September 27, 2008

How does the young mind view the world?

Author – Kanish Arhant-Sudhir

Why Is Peace Rejected By The World?

A. Everyday, when people are asked about contributing to peace or thinking peacefully, they simply
brush it aside and move on.

B. More people should be concerned about peace, and what they can do to advocate it.

C. Hopefully, this paper will explain why peace is a dying matter in this world, and what can be done
to save it.

D. The purpose of this paper is to help guide people away from stress, greed, and laziness, teaching
them about great people such as Mahatma Gandhi, Nelson Mandela, and Dr. Martin Luther King, and
acting for peace and envisioning a better world for all.

First, many people leave advocating peace out of their lives because of too much stress.

1. Business Stress –

Deadlines
Papers
Reports
Negotiations
Contracts
Jobs

2. Home Stress –

Mortgages
Payment
Deadline
Children
Grades
When they ‘disagree’

3. Academic Stress –
Homework
Papers
Reports
Tests
SAT’s
Exams

Next, there are people in the world who think they don’t have time to give thought to
peace, because the second they look away, they might lose a good client or a positive
monetary opportunity.

4. Money
Deals
Jobs

5. Business-oriented
Contracts
Job contracts
real estate contracts
Job-oriented
having a good job
hiring someone ideal

Further, contrasting to stress some people are just too lazy to be concerned about peace, because they simply do not think peace is a burning issue in our world.

______________________________

Peace is a better alternative to “war” and the world will be a better place if we all could pause and reflect on the “pros” and “cons” of “Peace and War” – Padmini Arhant

Written by Padmini Arhant · Filed Under Humanitarian | Leave a Comment 

Middle East Conflict

September 26, 2008

Vadim said…

I feel the same way about Obama. You neglected to mention his shifting stance towards Israel (perhaps it’s not your issue). He used to meet with Edward Said and do activism in the Palestinian community here in Chicago. Now he says he’s been “pro-Israel” from the start.

FISA was the last straw for me. I’m going to vote third party unless he revokes his support for the bill: http://tinyurl.com/5w9w9v

I’m in Illinois so it likely won’t make a difference but I’m too disillusioned with Obama at this point to do otherwise.

August 14, 2008 1:44 PM

Hi Vadim,

Thank you for your comment.

“Palestinian” issue is a humanitarian issue.

I have raised my concerns recently in public regarding human rights violation and the challenges faced by “Palestinian” population for more than half a century now.

I see no difference between a Palestinian Mother and an Israeli Mother’s grief stricken images resulting from this ongoing conflict that could be resolved only if everyone involved could reach out to one another as human beings first and then anything next.

As a Mother, I can’t imagine the courage and emotional strength required for any mother to bury her own child or children before her time.

Giving birth to “life” is the most arduous and joyous journey for a mother. The aspiration to raise a child in a free and secure world and provide basic to affordable comforts is a common dream of any parents.

Only if the “sources” responsible for this conflict could realize that they have been gifted with “life” by a “mother” who is rewarded with a second chance to life during childbirth despite modern medicine and technology.

Every “life” is precious and should matter.

When I see a child in Palestine, Tibet, Burma or Darfur suffering and yearning for freedom, I see beyond their ethnicity. I see the human pain and agony. The hopelessness in their eyes that “darkness” will never be expelled from their “dreams” and yet forcing
a smile for the “international press” coverage on the carnage and destruction of their lives.

I have mentioned on numerous occasions in my blogs throughout the “Democratic Primary Election” on my.barackobama.com about the “Palestinian Plight” and the importance for international support and action to restore human rights and dignity for the “Palestinian People” and others mentioned above.

My website www.padminiarhant.com to be uploaded and active from August 19th, 2008 has a “Humanitarian” header dedicated to human rights issues concerning all human beings on earth.

I am also in the process of publishing my very first book titled “Words Matter”,
The Mind of a Blogger, subtitled “How Democracy is Hijacked during War and Election”?

I have sincere and genuine concern for people deprived of basic human rights and liberty to think and express as well as those struggling to establish a place they could call “Home” like in the case of “Palestinians.”

Once again, your thoughts are much appreciated.

Sincerely,

Padmini Arhant

August 15, 2008 5:57 PM

Written by Padmini Arhant · Filed Under International Politics | Leave a Comment 

Economic Crisis

September 25, 2008

Our nation is currently experiencing a deep financial crisis due to major financial institutions, investment banks and insurance industry failure.

It all started crumbling like the house of cards beginning with Fannie Mae and Freddie Mac, Lehman Brothers, AIG and others in line with bad loans from the sub-prime mortgage crisis.

The economic meltdown in late 2006 precipitated nationwide housing market decline with saturated equity borrowing.

The entire network in the real estate and financial sector with hedge fund managers, underwriters, financial institutions processing the mortgage applications, mortgage brokers, realtors, homebuyers and sellers were primarily interested and vigorously involved in promoting and wrapping the deal with minimal and/or non-compliance of the standard rules and regulations that are specifically set up to avert such catastrophe.

The housing market bubble eventually burst contributing to credit crunch and massive foreclosures across the nation.

The commercial sectors were also hit in the process due to lenders streamlining measures and Congress legislation in an effort to slow down the escalating credit crisis.

Subsequently the ripple effect was felt in the job market with small businesses and medium size corporations struggling to maintain their credit limit from the sharp increase in interest rates on the borrowings and capital depletion essential for survival in the highly competitive market economy.

Meanwhile, some investors diverted their attention from real estate to stock market for short-term gains and as a result certain stocks earned the preferred status in stock value despite any performance history.

The stock market was warming up with superficially inflated stock prices along with futures trade speculation on oil stocks mostly responsible for the crude oil price elevation triggering the sensitive energy crisis.

At the top level, the monetary authority and incumbent administration as the economic growth and development oversight implemented policies including lowering of prime rates to an unprecedented level in recent times creating opportunities for financial institutions to outreach borrowers with no solid credit history.

The executive branch euphemism to display patriotism through home ownership factored for unscrupulous practices in the housing market debacle.

It has further come to light that some legislators are beneficiaries of personal financial deals as VIP PATRONS of the failed financial institutions such as Fannie Mae and Freddie Mac, Lehman Brothers and more.

However, it does not exclude Presidential contenders’ campaign advisors confirmed to be the financial institutions’ lobbyists/former executives enlarging the oversight conflict of interest.

Hence proving the theory….corruption and cronyism thrives in economic and political systems.

Strategy:

The government proposal to bail out these Corporations indulging in reckless undertakings with staggering $700 billion of American taxpayer’s money is currently debated in the House of Congress.

There is also anxiety over the executive branch cavalier approach for the clean bill immediate approval without tax payer investment protection or oversight for an unprecedented and historic venture.

The irony is the Treasury Department and the Federal Reserve Bank with the primary responsibility to monitor and recommend any regulation in the financial sector is experiencing labor pain after nearly twenty two months gestation and demanding Congress to deliver regardless.

With current Presidential race in process, one has to hope that this situation does not lead to the controversial Pro-Life vs. Pro-Choice debate on the financial crisis.

Congress favoring Pro-Choice to ensure the bearers safety and security would be prudent particularly with taxpayers bankrolling Corporations bailout and their erroneous decisions.

The urgency to regulate the financial sector granting unilateral authority to an individual – the Treasury Secretary with a sum approximately equivalent to Argentina and Chile’s combined GDP arouses legitimate skepticism among legislators on both sides of the aisle.

Some of them reminisce the current administration’s similar demand prior to invasion and occupation of Iraq.

Remedy:

Since the bailout is imminent and crucial for the stabilization of the financial markets, it is imperative for legislators to secure investments with conditional offers.

Several economists and experts have come forward and presented their thoughts and strategies for the existing national crisis.

1. The consensus among all of them is to establish an Independent Oversight with no Special Interests or Lobbyists infiltration posing conflict of interest.

2. Oversight Committee to approve after reviewing the proposal to invest in mortgage-backed securities to relieve the remaining financial institutions from the bad debts burden.

3. These securities purchase price carefully taken into consideration with a set profitable return upon instruments sale would be beneficial. It is also important to identify the buyers and sellers.

4. Open Bid transparency during investments’ sale or purchase is vital for investor confidence and value enhancement.

5. Corporate Executives pay off for poor judgment and weak performance eliminated as a precedence to existing and future Corporations heading in that direction would prevent repeat mistakes.

6. The hedge fund managers subjected to strict scrutiny and ethical standards is vital in addition to management fees and asset allocation determined in a manner to yield nothing less than profitable return to the investors i.e. the taxpayers.

7. Moratorium on foreclosures in bipartisanship agreement would relieve homeowners across the nation.

At the same time, the home owners to be evaluated on individual basis by the lenders with Oversight Committee alongside and encouraged to make payments equivalent to rental payments or interest only on revised mortgage package whatever is affordable.

Again, this offer made available only to the first home buyers dealing with foreclosures.

Successful sales and marketing of foreclosed homes to potential investors could expedite the housing market revival besides helping communities restore social and economic security through property taxes used for funding public school education and other services.

8. External audit on financial institutions listed as risky and brought to public focus would restrict undesirable activities.

9. The firewall resurrected between the commercial and investment banks protects public funds.

10. Sound and solid lending practices in both private and public sector would energize markets.

United States economy has proven record of accomplishments to rebound following crisis throughout the twentieth century.

The United States economy is resilient with a highly productive work force that has risen to the occasion and challenged the market forces acting against it.

The economic boom will resume and prosperity shared by the global markets.

The temporary turmoil in the market will be settled with prudent economic strategy, robust fiscal policy, leadership and confidence of the people of the United States of America.

Thank you.

Padmini Arhant

Written by Padmini Arhant · Filed Under Economy, Featured | Leave a Comment