AlterNet: Was the 'Credit Crunch' a Myth Used to Sell a Trillion-Dollar Scam?

[marmar]

Was the 'Credit Crunch' a Myth Used to Sell a Trillion-Dollar Scam?

By Joshua Holland, AlterNet. Posted December 29, 2008.

Even as the media continue to repeat the claim that credit has frozen up, evidence has emerged suggesting the entire story is wrong.



There is something approaching a consensus that the Paulson Plan -- also known as the Troubled Asset Relief Program, or TARP -- was a boondoggle of an intervention that's flailed from one approach to the next, with little oversight and less effect on the financial meltdown.

But perhaps even more troubling than the ad hoc nature of its implementation is the suspicion that has recently emerged that TARP -- hundreds of billions of dollars worth so far -- was sold to Congress and the public based on a Big Lie.

President George W. Bush, fabulist-in-chief, articulated the rationale for the program in that trademark way of his -- as if addressing a nation of slow-witted 12-year-olds -- on Sept. 24: "Major financial institutions have teetered on the edge of collapse ... began holding onto their money, and lending dried up, and the gears of the American financial system began grinding to a halt." Bush said that if Congress didn't give Treasury Secretary Hank Paulson the trillion dollars (give or take) for which he was asking, the results would be disastrous: "Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession."

For the most part, the press has continued to echo Bush's central assertion that there's a "credit crunch" preventing even qualified borrowers -- that's the key point -- from getting loans, and it's now part of the conventional wisdom.

But a number of economists are questionioning the factual basis of the credit crunch narrative. Columnist David Sirota recently looked at those claims and concluded that Americans "had been punk'd" -- that "the major claims about a credit crisis that justified Congress cutting a trillion-dollar blank check to Wall Street were demonstrably false," and the threat of a systemic banking crash was used by the Bush administration to overcome popular resistance to the "bailout." ....(more)

The complete piece is at: http://www.alternet.org/workplace/115768/was_the_%27credit_crunch%27_a_myth_used_to_sell_a_trillion-dollar_scam/

[hobbit709]

1. The kleptocrats are running wild with our money.

[ixion]

2. why yes, yes it was

and I was trying to make this point BEFORE they handed the neocon cabal a trillion dollars, but was shouted down by a few zealots who think that giving the people who caused the mess billions of dollars will solve the problem.

It has not, of course. What it did do was to provide the top 1% with a nice, soft cushion during our collapse.

[depakid]

3. The author has no idea what he's talking about

and, like the typical American- can't see beyond his own nose, and look to the actual numbers or the concerted actions of leaders of other nations, economists and reserve bank members around the world.

[Phred42]

5. I'm sure they were Shocked, SHOCKED to find out there was gambling going on....

[Phred42]

4. Is this how the AMERO is engineered into existence ?

or the New World Order perhaps....

:shrug:

[Raster]

6. One word: YES!

[On the Road]

7. Yes, All These Companies That Have Gone Bankrupt

or laid off half their workforce are just part of the plan to get government assistance.

:eyes:

The author is correct that the credit crunch is overstated by the media. I talked with Bank of America a couple weeks ago about a new home equity loan, and they're still in the business of lending money. But it certainly exists and is severe enough to be a major cause of the recession.

[leftofthedial]

8. bush? lie?

Why I never...

bush? steal?

Nawwww...

[bemildred]

9. Come come, would these people resort to financial scams?????

:sarcasm:

[Hydra]

10. I hate being right lately

Because it means we got screwed again- by our own leadership to the benefit of the Bush Admin.

[BridgeTheGap]

11. The sky was falling...they had to do something, quick...as opposed to global warming, which,

inspite of the evidence presented by the vast majority of climatologists, these same idiots claim to be a scam. Who are the real scammers!?!

[alterfurz]

12. TARP = Taxpayer Ass-Reaming Program

Proud to say I came up with that all by myself. Though undoubtedly not the first or last thus inspired.

[unblock]

13. proving only that economists rarely agree on anything.

i've seen the tight credit market first-hand. to deny it is simply wrong-headed.

now, that doesn't mean that the bailout was a brilliant idea in the form it took, nor does it mean that the shrubbies didn't lie or do other evil and/or stupid things.

but the credit crunch was certainly real enough, and the predictable consequence of too many shrub/greenspan chickens coming home to roost. things have barely improved since then, though there is a certain optimism that things will open up early in 2009.

[Festivito]

14. Yup, but the problem EXISTS, it's just not all cashed yet.

A bunch of bad paper sits in retirement accounts. When more of us retire, it gets cashed, and that's when it tanks US. They're just waiting for US to earn more, so they can then cash in and take it from US.

Also, a bunch of profit lays in the Cayman Islands and other unaccountable banking places around the world. That money can be brought back at any time, be attached to huge losses (that only exist because it's over-leveraged bank-made money), only now it comes back as real AND BECAUSE OF THESE LOSSES THEY DON'T HAVE TO PAY TAXES ON IT.

Add, that they took the 350B$ we already gave them, add another 150B$ they took for other earlier bailouts of AIG and such, and then UNDERSTAND THIS: THEY GAVE IT TO THE FED, i.e., they took it out of the money supply causing DEFLATION that now lets them buy our stuff for next to nothing.

That's why they are not lending, along with the need to bail out their bad paper when it arrives.

That's why they won't let US know what they are doing with the money.

That's why they quit reporting the M3 figure a couple years ago from the Fed, Federal Reserve Bank.

That's why they allowed the diversion of profits to the Cayman Islands to continue, legally.

That's why they DROPPED the leveraging limit for the LARGEST BANKS in April 2004. (Although, all that free money made the economy look good for the November 2004 election as well.)

IT'S A SCAM, AND A BIG ONE.

[galloglas]

15. You betcha !!

K & R #10

[natrat]

16. that fat little whore barney frank right there to give it all away, along with the rest of the dems