Bail-Ins: The Legal Framework is in Place to Continue Looting the American Public.

At the expense of the American public (devastating austerity and elimination of the middle-class), 2008 ushered in government bail-outs in order to preserve Wall Street's corrupt and bankrupt system., but what about government bail-ins (confiscation of bank deposits), the likes of which we saw occur in Cyprus, Greece? In addition to bail-outs, so far, we've been witness to severe austerity measures targeted at the masses, including sequestration, a dog-and-pony-show government shutdown, and massive cuts to food stamp that essentially puts a stranglehold on economic recovery (for the masses), not to mention the threat of default. There is no doubt that the intention is to strip away what is left of the social safety net at a time when its most needed. Meanwhile, J.P. Morgan, Goldman Sachs, Bank of America, Citibank, Deutsche Bank, etc., have not only evaded any and all consequences of their egregious actions, they are generously rewarded as they continue to gamble with taxpayer money. It doesn't take a rocket scientist to see what's going on here.

These austerity measures disproportionately affect children, seniors, and people with disabilities. According to the Center on Budget and Policy Priorities (CBPP), this recent $5 billion cut will average less than $1.40 per person per meal and jeopardize the strength of the current economic recovery. Moreover, according to the Center for American Progress (CAP) "each $1 billion dollar reduction in the Supplemental Nutrition Assistance Program eliminates 13,718 jobs," resulting in more than 68,000 job losses in the coming year.

Keep in mind that programs such as SNAP have what economists call a "multiplier effect"—in other words, "a dollar given to an entitlement recipient has amplified economic benefits. In this case, those consist primarily of the grocers who benefit when food stamp users shop in their stores. The estimated multiplier effect for food stamps is as high as 2 to 1."

The report, "Nourishing Change: Fulfilling the Right to Food in the United States," released by the International Human Rights Clinic (IHRC) at the New York University School of Law is timely as our government cut at least $5 billion-with many more cuts to come-- from the government's already inadequate $80 billion food stamp program, Supplemental Nutrition Assistance Program (SNAP), in the Farm Bill.  This report cites a study by the Center for American Progress, that calculates the "hunger bill" for the country, which includes the costs of treating illnesses and other medical conditions related to food insecurity, the impact of hunger on educational outcomes and lifetime earning potential, and the costs of running charity-based emergency food programs. For 2010, that bill came to $167.5 billion. For about half of that, $83 billion, the Center says we could extend the SNAP program to all food insecure households.

Okay, back to bail-ins.  It's the Dodd-Frank Act that passed in 2010-- it took up 848 pages at the time, as of July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages --that provides the legal framework for bail-ins.

According to the April 24, 2012 IMF report, conversion of bank debt to stock is an essential element of bail-in included in Dodd-Frank. “The contribution of new capital will come from debt conversion and/or issuance of new equity, with an elimination or significant dilution of the pre-bail in shareholders. ...Some measures might be necessary to reduce the risk of a ‘death spiral’ in share prices.” In the language of Dodd-Frank, this will “ensure that unsecured creditors bear losses.”

Under the existing legislation, the FDIC has the power to impose losses on unsecured creditors in the process of resolving failing banks. For example, the FDIC resolved Washington Mutual under the least-cost resolution method in 2008 and imposed serious losses on the unsecured creditors and uninsured depositors (deposit amount above USD 100,000). The Orderly Liquidation Authority (OLA) established under the Dodd-Frank Act further expands the resolution authority of FDIC. Subject to certain conditions, the FDIC now also has the powers to cherry-pick which assets and liabilities to transfer to a third party and treating similarly situated creditors differently, eg: favoring short-term creditors over long-term creditors or favoring operating creditors over lenders or bondholders. -- Economist, Nouriel Roubini

The U.S. is far from the only nation with provisions for bail-ins:

Bail-In Rules for Eurozone Banks Should Start In 2016

Bondholders Bail-in Shows Alternative Method to Rescue Banks

Bank Bail-in Rules Confirmed


But who cares, right? The stock market's soaring to new heights while income disparity continues to widen at unprecedented levels.

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Cyprus Banking Crisis Visualized

From Demonocracy:

The infograph that takes you from why Cyprus could not bail out its banks' to its failed financing needs and the road to confiscation:.

Click here for much larger version

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Is Cyprus Paving the Way For a Global Currency?

Sure, right now, the clear winner from the Cyprus crisis is the US dollar, which stands to benefit from public and private flows after the euro's reserve currency takes another hit. Today, the euro fell to its lowest against the US dollar in four months and the dollar came in just below its 52 week high. However, don't get too complacent because Cyprus is the canary in the coal mine, a petri dish, but unlike a petri dish, it will not be contained. It will affect the European markets and extend into the U.S.becoming the new model for bank bailouts, where money is directly confiscated from our bank accounts, not to mention, the fundamental breach in the public trust on which money relies.

From Economic Collapse blog:

"As it stands now, nowhere in Cyprus accepts credit or debit cards anymore for fear of not being paid, it is CASH ONLY. Businesses have stopped functioning because they cannot pay employees OR pay for the stock they receive because the banks are closed. If the banks remain closed, the economy will be destroyed and STOP COMPLETELY. Looting, robberies and theft are already on the rise. If the banks open now, there will be a massive run on the bank, and the banks will FAIL loosing all of its deposits, also causing an economic crash. TONIGHT there are demonstrations at most street corners and especially at the parliament building (just 2 miles from me).

Many are thinking that the ECB and EU are allowing Cyprus to fail as a test ground for new financial standards.

Just wanted all you guys to know the real story of whats going on here. Prayers are appreciated (although this is very interesting to watch) many of my local friends have lots of money in the banks.

You see, the entire western banking model is built on the dollar. So with the crisis in Europe, the flight to the dollar and flight to U.S. treasuries, makes the dollar the last safe haven.  However, once everyone’s on board this “lifeboat” full of holes will be pushed out to sea and sunk. Then, what do we do? Why, bring on the global currency, of course.

What leads me and others far more knowledgeable than me to this dreadful conclusion?

Well, it's not just Cyprus, it's what lies beneath Cyprus, and practically every economy in the world: the toxicity of the $1.2 quadrillion derivatives market. Eventually,   the cascading domino destruction of global economies will occur largely due to this monstrosity that's rarely mentioned.  The Eurozone is over leveraged on a tremendous amount of American sub-prime mortgages, a ton of derivative debt – collateralized debt obligations (cdo), credit default swaps—sold throughout the world via Wall Street.

Keep in mind, the Bank for International Settlements in Europe acts as an umbrella for all the central banks world-wide. But beware, the BIS downplays the total notional value of the global derivatives market, although, even at $600 trillion, that's much larger than the global economy by far. Anyway, nobody really knows the real amount, but when this derivatives bubble finally bursts there is not going to be nearly enough money on the entire planet to fix things.

Links:

A Secretive Banking Elite Rules Trading in Derivatives

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$16 Trillion in Secret Bailouts!

According to Senator Bernie Sanders, the first top-to-bottom audit of the Federal Reserve took place, implying that the Federal Reserve is audited, as the Comprehensive Annual Financial Report (CAFR) shows, however, that audit doesn't go far enough. Anyway, Senator Sanders said this audit uncovered "a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression."

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

"No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

From the Silver Bear Cafe:

The list of institutions that received the most money from the Federal Reserve can be found on page 131 of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

The GAO Report

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HAMP: Designed to Fail.

The Home Affordable Modification Program (HAMP), despite what President Obama says, extends the foreclosure period by entangling home owners in red tape, during which they'd accumulate hefty fees and penalties (all payable to the banks) and at the end of which they're thrown out on the street, anyway. It should come as no surprise to learn that Timothy Geithner is as an agent of the banks working directly against the interests of ordinary Americans. He admits it, himself, on more than one occasion.

Here is Neil Barofksy "Morning Joe" saying that Geithner said that the Treasury Department's housing policies were "foaming the runway for the banks" .



Links:

Money Trust Investigation: Investigation of Financial and Monetary Conditions in the United States Under House Resolutions Nos. 429 and 504

Description:
In 1912, a special subcommittee was convened by the Chairman of the House Banking and Currency Committee, Arsene P. Pujo. Its purpose was to investigate the "money trust," a small group of Wall Street bankers that exerted powerful control over the nation's finances. The committee's majority report concluded that a group of financial leaders had abused the public trust to consolidate control over many industries. The Pujo Committee report created a climate of public opinion that lead to the passage of the Federal Reserve Act of 1913 and the Clayton Antitrust Act of 1914.

The hearings were conducted between May 16, 1912 and February 26, 1913. The transcript of the hearings was published in three volumes. It is presented in the original 29 parts with the index, a table of interlocking directorates of 18 financial institutions, and the majority/minority report of the committee

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Will the US Economy Be In Free-fall by Autumn?

Greece and the EU have monopolized headlines recently in the mainstream media. Meanwhile, according to the Global Europe Anticipation Bulletin, another financial crisis is brewing that will make 2008 "seem like a small summer storm."

An IMF working paper, entitled, Systemic Banking Crisis Database: An update  by Luc Laeven and Fabián Valencia shows that most banking crises start in September.

Five of the biggest banks in the United States are crafting living wills in case they fail, as part of government-mandated contingency planning that could push them to untangle their complex operations.

At the same time, banks continue to get backdoor bailouts. 

Below are six ways the big banks rake in cash every day from services that are supposed to help working Americans.

1. Big Contracts for Food Stamps

Suzanne Merkelson at Republic Reports points out that Supplemental Nutrition Assistance Program (SNAP) benefits—the program formerly known as food stamps, which provides food aid to families—increased to $72 billion last year (from $30 billion in 2007).

And as the lousy economy keeps people relying on benefits to feed their families, big banks keep benefiting from the program too. A new paper [PDF] from Michele Simon finds that SNAP “represents the largest, most overlooked corporate subsidy in the farm bill.” Merkelson writes:

While SNAP is a federal program, USDA and the states work together to administer the program. States contract with banks, who authorize payments (Electronic Bank Transfers or EBTs) from the Federal Reserve to retailers. J.P. Morgan Chase has contracts in half the states “indicating a lack of competition and significant market power,” according to Simon. How much are these deals worth? In New York, one seven-year deal originally gave the bank $112 million for its services, but was recently amended to add another $14.3 million.

JP Morgan spends a bunch of money lobbying the Department of Agriculture on this program, making sure they get what they want—a big paycheck from state taxpayers.

And the best part? When you have a problem with your JP Morgan SNAP benefits card? You call a JP Morgan call center for help—and that call center just might be in India.

So to recap: big bank makes money off a program that helps people who are unemployed—and creates jobs in India with that money, rather than creating them here in the US.

2. Making Money Off the Unemployed

The banks get paid directly by the state to handle the SNAP program, but that's far from the only program designed to help the victims of the lousy economy that has turned into a cash cow for the banks that created the crisis in the first place.

Unemployment benefits in 41 states are provided through Wall Street giants like Bank of America, Wells Fargo, and JP Morgan Chase. In South Carolina, for instance, customers get a prepaid debit card from Bank of America to access their unemployment benefits—which is, of course, fee-free at a Bank of America ATM. But for rural South Carolinians, the nearest Bank of America ATM might be 50 miles away. Shawana Busby, a South Carolina user of the program, tells the Huffington Post that she's probably spent $350 in fees to access her benefits—which are $264 a week. Another user of the cards, Sandra Gortman, tells the Huffington Post that she was pressured to adopt the prepaid card, and then when she used it to put gas in her car, the gas station put a hold on her card for $75, which didn't come off for three days. When she called to check on the hold, she was charged a customer service fee. (The bank has now eliminated such fees.)

The bank also collects a 3-cent fee from the state each time it “facilitates” a transfer on a prepaid card. It also gets those fees for direct-depositing unemployment benefits into someone's bank account.

3. Sweet Campus Deals to Prey on Students While Distributing Federal Student Aid Money

A recent report from USPIRG, “The Campus Debit Card Trap,” dug into the deals that universities, both public and private, make with banks to produce student ID cards and more significantly, actually handle and disburse student financial aid. In other words, young people who've already signed up for a lifetime of student debt are being preyed on further by banks that can charge them fees just to access their money. (And, remember, those same big banks are already making big bucks on student aid.)

USPIRG found that 32 of the 50 largest public 4-year universities and 26 of the largest 50 community colleges—the schools in part supported by taxpayers—had deals with banks to provide debit or prepaid cards for students. The campuses often get money from the banks for the privilege of access to students, and the banks then make their money back in fees—and possibly other ways, too. Mela Heestand, writing for AlterNet about the protests at the University of California Davis that drove US Bank to close its campus bank branch, pointed out that “university contracts with banks encourage tuition hikes, because banks stand to profit directly from rising tuition, while the administration comes to rely on funding from bank contracts.” US Bank has agreements at 52 campuses around the country.

(After the protests that shuttered the US Bank branch, twelve activists were arrested and face up to 11 years in prison and $1 million in fines.)

Students are the ones bearing the costs of access to money they're already paying interest on, and USPIRG points out that the fees are “steep and frequent,” including per-swipe fees, inactivity fees (yes, you read that right), overdraft fees and fees to reload their prepaid cards. And financial aid that is paid to students through a debit card is subject, just like any other card, to ATM fees if students use an ATM not owned by the bank that currently has their money. The Department of Education has rules on this practice, banning banks from charging fees if they provide “convenient” ATMs for the students' use, but their definition of “convenient” is vague—leaving students at the mercy of a single ATM on campus, which produces long lines and leaves no alternative if it breaks or runs out of cash.

4. Cashing in on Tax Returns

It's not only your unemployment, financial aid, or SNAP benefits that the big banks control these days—they also might come between you and your tax return.

Once again, South Carolina takes the lead, claiming to save the taxpayer money by cutting a deal with Bank of America, this time to send out tax returns in the form of—you guessed it—prepaid debit cards from Bank of America. And just like with unemployment benefits and financial aid (or your regular, consumer bank card), the bank is making its money collecting fees from people trying to access their own money.

“They’re not even nickel and diming people, they’re five-dollaring and 10-dollaring people,” Sue Berkowitz, Director of the Appleseed Legal Justice Center, says.

Oh, and the bank got this deal through a no-bid contract—the Department of Revenue calls them “the best fit” for the program. The program isn't mandatory but, the Palmetto Public Record notes, it's opt-out, not opt-in. Which means that unless you request otherwise, your money will be given to you through Bank of America—which in addition to sticking you with ATM fees and other charges, is going to make interest on your money while it's sitting in their account.

5. Refinancing Homes Means Big Bucks for Banks

Getting the big banks to refinance mortgages and help people facing foreclosure stay in their homes has been a huge fight, with activists around the country putting their bodies on the line, physically occupying homes to keep residents in them.

Now the program that's supposed to help those struggling homeowners looks instead to be a big fat handout to the same banks that were preying on borrowers to begin with. According to the Wall Street Journal, banks that service mortgages could make as much as $12 billion by refinancing under the newest version of the Home Affordable Refinance Program (HARP 2.0). And the borrowers? Oh, they'll save money, too—somewhere around $2.5 billion, maybe $5 billion tops.

The program is supposed to let underwater borrowers who've made all their payments in good faith refinance their mortgages at current market value. But, Bonnie Kavoussi at the Huffington Post notes, instead those banks are able to charge steep fees and above-market interest rates.

Shaun Donovan, the current Secretary of Housing and Urban Development calls it “a monopoly on refinancing,” saying at a Senate hearing, "Whoever holds their current loan, whoever is the servicer, they can charge [borrowers]—and we're seeing this—very high fees."

6. Profiting Off The Very Idea of Another Big Bailout

In case all this profit enabled by the government wasn't enough for you, perhaps the most disturbing recent bank-related news is a report by the “wild socialists” at Bloomberg that, “JPMorgan receives a government subsidy worth about $14 billion a year, according to research published by the International Monetary Fund and our own analysis of bank balance sheets.”

They explain:

In recent decades, governments and central banks around the world have developed a consistent pattern of behavior when trouble strikes banks that are large or interconnected enough to threaten the broader economy: They step in to ensure that all the bank’s creditors, not just depositors, are paid in full. Although typically necessary to prevent permanent economic damage, such bailouts encourage a reckless confidence among creditors. They assume the government will always make them whole, so they become willing to lend at lower rates, particularly to systemically important banks.

In other words, because we bailed them out once, the expectation that we'll do it again is actually making the banks money. Other lenders are willing to lend money to the “systemically important banks” (read: banks that got bailed out by the US government because they were “too big to fail”) at lower interest rates because they presume that they'll always get their money back since the government will make sure the banks don't go belly up. So the biggest banks are paying less in interest than medium-size and small banks--and that adds up to billions.

So they're profiting just from being too big to fail. And each time there's a crisis, the expectation of government support actually grows—as of 2009, Bloomberg notes, they're saving about 0.8 percent every time they borrow. The total benefit to the big banks just of the expectation that there will be another bailout? About $76 billion a year—which Bloomberg points out is equal to their total profit from the past twelve months, and is more than the federal government spends each year on education.

Brad Sherman, a Representative from California, asked Jamie Dimon this week, before Congress, “[H]ow can medium size banks compete against you when your cost of capital is reduced by 80 basis points, 0.8 percent, because of a belief that if they go under we'll let 'em go under, but if you go under we'll bail out your creditors?”

Dimon, of course, claimed that it wasn't true, and that he borrowed in the marketplace, “with the smartest people in the world.” But it looks like the smartest people in the world are getting a whole lot of help—and making a whole lot of money—off of college students and taxpayers, off the working poor and unemployed in the U.S.

Household debt has soared far above wages for decades.  In fact, 30 million workers made below $10,000 per year in 2010.Suffice to say, far too many are in crisis already. In other words, the big crisis is here. It just hasn't hit those we call upper middle class yet.

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Bankster Back Door Bailouts Explained

Girl Bear: "What about the Goldman Sachs? Did they buy another bank?"
Boy Bear: "Because when you already own the U.S. government, you don't need to buy any more banks."

Boy Bear: "Actually, the Goldman Sachs probably profited from the failure of the AIGs".
Girl Bear: "How could someone profit from the downfall of one of their biggest clients?"
Boy Bear: "Because while the Goldman Sachs was loaning money to the AIGs, it was also making a secret bet that they would go under."
Girl Bear: "My god! Is this some kind of science fiction movie? Like the Star Wars?"

Girl Bear: "Are any of the bailouts going on today?"
Boy Bear: "Yes, the Ben Bernanke keeps the short term rate at zero."
Girl Bear: "How is that a bailout?"
Boy Bear: "Low rates means the banks have to pay the American very little interest in their savings accounts?"
Girl Bear: "That is very nice gift from the American people to the banks."
BoyBear: "Yes."
Girl Bear: "And to show their gratitude, did the banks stop their foreclosures?"
Boy Bear: "No".
Girl Bear: "Did they give them mortgages?"
Boy Bear: "No".
Girl Bear: "Did they do anything at all?"
Boy Bear: "Yes, they increased the monthly fees on all bank accounts."
Girl Bear: "That does not sound like the gratitude, that sounds like the screwing over of the American people."

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Sacrificing Real People to Boost an Illusion.

Despite Warren Buffet's huge $5 billion vote of "confidence" in Bank of America, the "too big to fail" institution is slashing 30,000 jobs - after it's already cut 6,000 jobs - in an effort to reverse a crisis of confidence in its investors. It's the single largest job reduction by a US company this year, since the post office cut 30,000 jobs, last year, since General Motors cut 47,000 jobs in 2009. The cuts which effect Bank of America's consumer businesses represent 10% of South Carolina's work force.  This year, when the real unemployment rate is over 20%.

Not to mention the poverty rate in America is rapidly increasing, especially for children under 18. And middle class wealth is falling. 

The government draws the line of poverety at an income of $22,314 a year for a family of four and $11,139 for an individual.  Oh, and Merck is also cutting 13,000 jobs. So, boosting investor confidence? In what? The only thing I can think of is that the uber rich' will continue to get uber uber rich. Because that's the only segment of the population that is benefitting.

Of course, this is nothing new. Banks and corporations often slash jobs in order to boost confidence, boost their bottom line, and whether we want to face it or not, boost the profits in order to line the already lined pockets of the powers behind these institutions. The results - the rich getting richer by the day - prove that this is true.

But isn't there something inherently wrong with a system that sacrifices its people, real people, for an illusion? For excessive profit? To maintain institutions that are too big to fail? Because, after all, confidence is not real. Confidence is often misleading and not congruent with reality, and that often leads to delusion and deception. In fact, over-confidence inflated the housing bubbles that burst in 2008, bringing our economy to its knees. And don't kid yourself, there are a few more bubbles yet to burst. Still, we're willing to sacrifice real people in order to create the illusion that everything is just fine...when, everyday, it seems, it gets worse and worse.

Then, there is the problem that if Bank of America collapses, there may not be enough money in the FDIC to cover the losses that will occur. That's right. Bank of America just might collapse the FDIC. In August, the FDIC rejected Bank of America's mortgage accord because it doesn't have enough money information to evaluate the settlement.

And I thought this was interesting. Adulos Huxley, from zerohedge posted a Goldman Sachs Case Study that may or may not predict

Buffett branding is just a first line of defense in the rescue plan.

9/15/2008 | GS=$131 | Lehman Bros files for Ch. 11

9/16/2008 | GS=$129 | AIG bailed out

9/23/2008 | GS=$121 | Buffett buys $5B of GS @ $115/share (under market)

10/3/2008 | GS=$124 | TARP made into law

10/28/2008 | GS=$91 | US Treasury buys $10B of GS @ $122.9/share (over market)

11/21/2008 | GS=$47.41 | low

11/24/2008 | GS=$65 | QE 1 begins; Fed buys MBS

For Banksters of America, we can expect same order of bailouts about a month apart with BAC falling 20-30% each interval:

8/25/2011 Buffett (private deal)

9/23/2011 US Treasury (federal)

10/28/2011 QE 3 (international overlord)

It does make one wonder why such a savvy investor like Buffet would invest $5 billion into what appears to be a powderkeg of debt.

Links:

Bankrate.com
Poverty Call to Conscience Tour

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Worldly Gain Worldly Loss

The world is charged with the grandeur of God.
It will flame out, like shining from shook foil;
It gathers to a greatness, like the ooze of oil
Crushed. Why do men then now not reck his rod?
Generations have trod, have trod, have trod;
And all is seared with trade; bleared, smeared with toil;
And wears man’s smudge and shares man’s smell: the soil
Is bare now, nor can foot feel, being shod.

And for all this, nature is never spent;
There lives the dearest freshness deep down things;
And though the last lights off the black West went
Oh, morning, at the brown brink eastward, springs—
Because the Holy Ghost over the bent
World broods with warm breast and with ah! bright wings.

by: Gerald Manly Hopkins

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Banksters Will Not Reveal Recipients of $2 Trillion.

Even after the "U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help."

Instead, all the biggest U.S. commercial banks and their lobbyists - uniting in an effort to oppose letting we, the public know which banks received how much of 2008's $2-trillion federal bailout for banks - are taking their case to the Supreme Court. That's right. The same court that always sides with Big Money against the interests of the American people. The same court that upheld "corporate personhood" in allowing corporations to spend unlimited amounts to buy our elections.

And if that's not bad enough, Comcast partnered with teabaggers to bring new right-wing broadcast network online as they fight a battle to acquire NBC and related assets (including MSNBC) without being deemed a monopoly. Fox News on steroids, perhaps?

Here's a look at their joint venture: RightNetwork

How does this tie into the Supreme Court's decision favoring "corporate personhood" and the decision it will make in keeping us from seeing where "our" $2 trillion went?

Well, Congress already enabled five corporations to control 80% of U.S. media. Considering that the ruling elite depend on the corporate media to maintain its ability to control our minds, and considering the brain-washing that is already going on, do we really need another right-wing network like this?

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).

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Follow-the-Money and Be-on-the Alert Links

ProPublica should be a must-read for every American. It is an independent, non-profit newsroom that really and truly produces investigative journalism in the public interest. Their work focuses exclusively on truly important stories, stories with “moral force.” They do this by producing journalism that shines a light on exploitation of the weak by the strong and on the failures of those with power to vindicate the trust placed in them.

Investigative journalism is at risk. Many news organizations have increasingly come to see it as a luxury. Today’s investigative reporters lack resources: Time and budget constraints are curbing the ability of journalists not specifically designated “investigative” to do this kind of reporting in addition to their regular beats. This is therefore a moment when new models are necessary to carry forward some of the great work of journalism in the public interest that is such an integral part of self-government, and thus an important bulwark of our democracy.

The business crisis in publishing and — not unrelated — the revolution in publishing technology are having a number of wide-ranging effects. Among these are that the creation of original journalism in the public interest, and particularly the form that has come to be known as “investigative reporting,” is being squeezed down, and in some cases out.

Here is an investigation everyone should read:

In the Loop: Pay Day Lenders Extensive, Expensive Ties to Washington Power Players. Charging interest rates as high as 400% to mostly the working-class, Pay-day lenders' "connections in the capital make clear that the industry has quietly -- and in a remarkably short time -- enmeshed itself into a network of Washington influence-peddlers skilled at putting a favorable sheen on a host of corporate causes."

Links to monitor:

Bailout Watch - is a collaborative effort to research, investigate, and analyze the federal government's bailout activities and publish resources and data for policymakers, the media, and interested citizens. Bailout Watch draws upon the expertise and resources of the partner organizations to identify specific data that should be disclosed (and made available in an online, indexed, searchable format), research and investigate government decision-making processes related to the bailout, and provide analysis and commentary about the effectiveness of different bailout programs.

Change Tracker - ProPublica has set up a page, with a feed, that monitors any changes to whitehouse.gov, recovery.gov, and financialstability.gov. Whenever there’s a change to any page on these sites, it’s noted in the feed. You can then view the old and new versions of the page side by side, with the changes highlighted.

Eye on Bailout Money

* A complete list of where the money's going, from AIG to the smallest community bank
* A map that charts all the bailed-out companies
* A timeline of major bailout events
* A running total of how much of the TARP bailout money has been committed
* Graphical breakdowns and plain language descriptions of the Treasury Department's bailout programs without confusing government acronyms
* A list of the banks that have returned the bailout money
* A snapshot of how mortgage servicers are performing in the foreclosure prevention program.
* The latest on the bailout from our blog and our links to the best bailout reporting

The Missing Memos ProPublica memo depository of the missing memos regarding legalities involving detainees, rendition, eavesdropping, using the military within the US, and free speech.

Open the Government is concerned that our government keeps from the American public information that we need to make our families safe, secure our country and strengthen democracy, a broad-based set of organizations formed OpenTheGovernment.org.

Side by Side Health Care Bills compare the Senate version of the health care reform bill with what it will look like with the House's changes.

Subsidyscope’s Financial Bailout Project. pulls together data on the financial institutions that are receiving benefits from the various federal programs so users can understand how and where taxpayer dollars are being spent.

It happened once:

“Army Surveillance of Civilians” (1972) - A Documentary Analysis” by the Subcommittee on Constitutional Rights, Committee on the Judiciary, United States Senate

“The following report by the Subcommittee staff analyzes certain computer print-outs and publications generated in the course of the Army’s domestic intelligence program.”

“The overwhelming majority of the reports pertain to the peaceful activites of nonviolent citizens lawfully exercising their constitutional rights of speech, press, religion, association, and petition.”

“These files confirm what we learned first from former intelligence agents – that Army intelligence, in the name of preparedness and security, had developed a massive system for monitoring virtually all political protest in the United States. In doing so, it was not content with observing at arms length; Army agents repeatedly infiltrated civilian groups. Moreover, the information they reported was not confined to acts or plans for violence, but included much private information about peoples’ finances, psychiatric records, and sex lives.”

“The size of these and other data banks confirms that the Army’s domestic intelligence operations did not begin with the Newark and Detroit riots of 1967. The events of that summer only expanded activities which had been going on, in varying degrees of intensity, since 1940, and which has its roots as far back as World War I.”

Maplight illuminating maps of all types

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What are the chances that we, the people will benefit in the long run?

After the English South Sea Bubble of 1720, a financial meltdown very similar to the current Wall Street meltdown, Parliament punished prominent politicians implicated in the financial calamity, by stripping them of all of their worldly assets and wealth. However, even though, in the short term, the South Sea bubble proved to be a disaster, according to John Brewer, author of The Sinews of Power: War, Money and the English State, 1688-1783, "its consequences were more beneficial… changing the structure of the national debt” making for a stronger state in the long run.

Fast forward almost 300 years. What are the chances that we, the people will benefit in the long run? Well, considering that the short-term mania that drove Wall Street compensation practices continues to reward the banksters for collapsing our financial system to this very day, the outlook doesn't look so good.

After transforming banking from a service industry into a zombie manufacturing industry that designed, produced and marketed worthless, exotic "securities" that eventually blew up in their faces, tossing trillions of dollars into a black hole, and as Galbraith once said about the 1929 bubble, made "a mass escape into make-believe" the banksters, nevertheless, produced enormous bonuses and rewards for everyone involved. In contrast, the American taxpayer's reward for rescuing the banksters is a costly $3.43 trillion bill and counting, high unemployment, with no end in site, and a totally corrupt political system, considering the depth of the ties between the banking industry and our political leadership in Washington.

So how can we benefit in the long run when, if anything, the conditions that caused our economy to crash are even more exaggerated than their previous forms. And no one, from Ben Bernanke to any of the banksters to the politicians at the helm, are willing to take responsibility.

“For Bernanke to blame weak regulation for the pyramid of bank-concocted, over-leveraged, high fee-producing assets—real loans mixed with a lot of price-inflating hype—is like a Super Bowl coach blaming coaching in general for the failure of his team to win the Lombardi Trophy.” -- Nomi Prins

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Credit-Default Swaps Solution For Too Big To Fail?

"Too Big to Fail" refers to the idea that our government cannot allow the large, highly interconnected financial institutions to fail because as one goes, so do the rest. This would result in economic disaster.

The most dangerous legacy of the financial crisis is the perception that some institutions are too big to fail. This perception distorts competition and the allocation of capital, favoring risk-taking and incubating the conditions for the next crisis. Ignoring the problem will only make it bigger. Intelligent regulation is essential. We have proposed a new market-based capital requirement system that we believe is superior to current regulatory proposals.

Well, what if the "tools for the fix" can be found inside the banks themselves? The following article, How the Tricks That Crashed Wall Street Can Save the World propose the following:

There is a way forward, beyond new regulators, new requirements, and new rules, for the banks to figure out how to skirt. An intervention mechanism centered within banks and reliant on market signals will work much better than a Washington edict. And we believe such a system is possible to create and put in place.

The way to do it, contrary though it might seem, lies in the much-maligned credit-default swaps (CDSs), which are like insurance policies against a loan defaulting and whose value rises as the chance of failure increases. When these contracts are traded on an exchange that ensures that they are properly collateralized, they provide a daily assessment of the risk of a loan's default. Our idea is to use this timely information to monitor banks.

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If Big Banks Are Terrorists, It's Even More Important We Don't Give In.

In an attempt to explain why the government needed to bail out the troubled banks, President Obama said that AIG is like a suicide bomber.

“We had to step in, it was the right thing to do, even though it is infuriating. The same is true with AIG. It was the right thing to do to step in. Here’s the problem. It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.

While that may be true, it is the policy of the United States not to give in to terrorism. We've already eased their fingers off the trigger. At this point, as we enter the second or third phase of the bailout, it's important that we, the people take a stand and tell the financial sector that they do not run this country. We can start by standing up to Goldman Sachs, JP Morgan, Citigroup and Bank of America.

Take Goldman Sachs, who wants to pay back the $10 billion it borrowed from the Troubled Asset Relief Program (TARP). Sounds like a good thing, right?

Wrong, according to former International Monetary Fund chief economist, Simon Johnson, currently Professor of Entrepreneurship at MIT's Sloan School of Management, in addition to senior fellow at the Peterson Institute for International Economics, co-founder of BaselineScenario.com, and a member of the Congressional Budget Office's Panel of Economic Advisers

Initially, the government wanted to carefully manage the flow of information regarding the results of the stress tests that Obama ordered on 19 banks, because any time that kind of sensitive information is revealed, the risk of destabilizing the markets becomes much greater, and increases the pressure on rival banks, who are not ready to pay back TARP funds, by undermining their business models and hindering thier ability to raise capital, possibly putting them in a position of needing more TARP money.

Goldman Sachs, by announcing that they plan to pay back the TARP money, contingent upon the results of the stress test, sent a strong signal that they were going to ace it. This, of course would greatly tilt the playing field to Goldman Sachs' advantage, something we don't want at a time when "too big to fail" is something we are trying to discourage, especially considering that big financial players are even bigger now that Bear Stearns and Lehman Bros. have been eliminated.

Goldman Sachs still receives government assistance created last Fall when the crisis came to a head, that take several forms - access to credit from the Federal Reserve made possible by government allowing them to change legal forms in the midst of the crisis; government (FDIC) backing or guarantee of loans; $13 billion dollars that they received through the AIG bailout, due to thier counter party status to AIG that Goldman will never have to pay back, etc. At the same time that Goldman Sachs receives the continuing support of the government, by paying the TARP money back, Goldman Sachs can remove all the constraints set by the government, including the restrictions on executive pay, the very thing that contributed to the current finanical meltdown.

The very nature of these compensantion schemes encouraged and greatly rewarded the risk taking that brought our financial system to the brink of disaster.

In Simon Johnson's article "The Quiet Coup" in the May issue of The Atlantic Monthly, Johnson explains that in order to improve our economy, we must break the power of the financial oligarchy that is blocking reform. If we do not break this power structure, and allow the financial sector to take back its authority America could face a crisis that in Johnson's words, "could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big."

"We face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support." - Simon Johnson

If we've learned anything from this financial crisis, it should be that big business is only interested in bigger business, nothing else, therefore we should ask Goldman Sachs, "What's in it for you, and what do we have to lose?" The answer is: everything... to both questions.

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Public Private Partnership Program Scheme

Will taxpayers end up owning even more of these troubled assets, thanks to the Public-Private Partnership Program introduced by Treasury Secretary Timothy Geithner?

This program intends to give out loans with very easy terms to hedge funds in order to encourage them to buy up toxic assets from banks. The addition of private investors will undoubtedly inflate the price of these assets well above the market price. Why can't we figure out the true cost of these toxic assets and pay the price? Could it be because the true price is not high enough for the almighty banks? This is just another attempt to subsidize the banks at the taxpayers expense.

How come the government forces out the CEO of General Motors, yet has no problem with the CEO of Citigroup? Why don't we treat the banks like we treat the auto makers?

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Sponsor An Executive and Bail out a CEO

I want some TARP:

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The New Welfare Queens are Hungry Beasts.

Using 80 aliases, 30 addresses, 12 social security cards, and 4 "dead husbands", President Reagan's mythical, Cadillac-driving, African-American "Welfare Queen" ripped off taxpayers to pay for her ten "out-of-wedlock" children. Upon hearing this tale, Americans became outraged and demanded President Reagan eliminate this anathema and her giant Cadillac too.

As it turns out, there was no evidence that a significant problem with welfare cheating even existed, as less than 5% of all welfare benefits went to persons who were not entitled to them (Green book overview of entitlement programs by the Committee on Ways and Means, U.S. House of Representatives (1994), not to mention all the people who were entitled but either because of ignorance or inability, never collected what was owed to them.

You see, President Reagan wasn't really lying, he was trying to tell us that he was about to give birth to this blood sucking beast, a.k.a. the "Welfare Queen", a.k.a. the banks and financial corporations, who would one day, reap the benefits of the biggest corporate welfare scam ever.

In other words, the banks want more bailout money, and it looks like Obama, in an attempt to win needed Republican support, is not only going to grant their wish, but has agreed to extend the number of years that firms can retroactively write off huge losses incurred in 2008 and 2009.

This business tax cut, in effect, is another gift to the financial institutions, as the banks and perhaps the housing industry, are the only companies with losses large enough to benefit. Essentially, it allows companies to receive cash, free of conditions, from the government, that they would not have received otherwise.

It's easy to go to war against folklore... a little harder when the folklore becomes reality. We can either fight the beast or end up fighting amongst ourselves as the beast hungrily awaits our remains.

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What's The Real Story Behind Eliot Spitzer?

I've always thought there was more to the Spitzer scandal than met the eye, considering his aggressive plan to fight the corruption in the financial industry. Well, it looks like the House Financial Services Committee is planning to hold hearings on the motive behind the Bush Administration's investigation of Eliot Spitzer.

According to Greg Palast, “Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet” right around the time the scandal broke out and three weeks after Spitzer's editorial appeared in the Washington Post.

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.
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What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

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Financial Enlightenment Projects.

The recent financial crisis has sparked a few projects designed to enlighten the media, policymakers, and we the people regarding the activity in the world of finance. Here are a few examples:

If you have a question about Federal programs, benefits, or services the Federal Citizen Information Center , a part of the U.S. General Services Administration
Small business answer desk.

Pew has launched the project, Subsidy Scope which aims to raise public awareness about the role of federal subsidies in the economy.

Morningstar is planning to construct a pension, endowment and foundation database that will include performance and operational information on foundations, endowments and pension funds, which they hope to launch in early 2009. The system will track foundations, pensions and endowments along about 300 data points, including portfolio holdings, fees and expenses, assets under management and quarterly performance.

The Library of the International Labour Office (ILO) has produced a new information resource guide on microfinance.. This guide is a starting point for anyone beginning research on microfinance. It provides links to key ILO publications on the topic, ILO labour standards and data, as well as other resources around the world.

With more than 6 million organizations with paid employees in the US the U.S. Census Bureau is releasing a new product, Business Dynamics Statistics (BDS), a data series that allows users to track annual changes in employment for growing and shrinking businesses at the establishment level.

The BDS monitors this activity, tracking annual job creation and destruction at the establishment level using elements not found in similar databases, such as firm age and size. Tracking by firm age, for example, allows users to distinguish between new establishments of new firms and new establishments of mature firms. These statistics are crucial to understanding current and historical entrepreneurial activity in the U.S.

“The Business Dynamics Statistics provide data users unprecedented information on the life cycle of U.S. businesses,” said Ron Jarmin, chief economist at the U.S. Census Bureau. “These rich new data will fundamentally change the way people think about job creation and economic growth.”

A number of key economic data items are tabulated by the Business Dynamics Statistics, including number of establishments, establishment openings and closings, employment, job creation and destruction, and job expansions and contractions.

And finally, the 2008 Financial Crisis Primer, which compiles some of the "best and most accessible materials related to the crisis. It provides resources such as articles on the failure of regulation, the Congressional testimony of key players, editorials on the government's bailout of banks, books on previous financial debacles, and the voices of people who have lost homes in foreclosures."

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History of U.S. Government Bailouts.

Pro Publica cleverly composed an interactive (the colored circles, if clicked at the originating site will take you to the corresponding date) display chronicling the history of U.S. government bailouts. The circles below, arranged in chronological order represent the size of each U.S. government bailout.

	Industry/Corporation	Year	What Happened	Cost in 2008 U.S. $
●	Penn Central Railroad	1970	In May 1970, Penn Central Railroad, then on the verge of bankruptcy, appealed to the Federal Reserve for aid on the grounds that it provided crucial national defense transportation services. The Nixon administration and the Federal Reserve supported providing financial assistance to Penn Central, but Congress refused to adopt the measure. Penn Central declared bankruptcy on June 21, 1970, which freed the corporation from its commercial paper obligations. To counteract the devastating ripple effects to the money market, the Federal Reserve Board told commercial banks it would provide the reserves needed to allow them to meet the credit needs of their customers.	$3.2 billion
●	Lockheed	1971	In August 1971, Congress passed the Emergency Loan Guarantee Act, which could provide funds to any major business enterprise in crisis. Lockheed was the first recipient. Its failure would have meant significant job loss in California, a loss to the GNP and an impact on national defense.	$1.4 billion
●	Franklin National Bank	1974	In the first five months of 1974 the bank lost $63.6 million. The Federal Reserve stepped in with a loan of $1.75 billion.	$7.8 billion
●	New York City	1975	During the 1970s, New York City became over-extended and entered a period of financial crisis. In 1975 President Ford signed the New York City Seasonal Financing Act, which released $2.3 billion in loans to the city.	$9.4 billion
●	Chrysler	1980	In 1979 Chrysler suffered a loss of $1.1 billion. That year the corporation requested aid from the government. In 1980 the Chrysler Loan Guarantee Act was passed, which provided $1.5 billion in loans to rescue Chrysler from insolvency. In addition, the government's aid was to be matched by U.S. and foreign banks.	$4.0 billion
●	Continental Illinois National Bank and Trust Company	1984	Then the nation's eighth largest bank, Continental Illinois had suffered significant losses after purchasing $1 billion in energy loans from the failed Penn Square Bank of Oklahoma. The FDIC and Federal Reserve devised a plan to rescue the bank that included replacing the bank's top executives.	$9.5 billion
●	Savings & Loan	1989	After the widespread failure of savings and loan institutions, President George H. W. Bush signed and Congress enacted the Financial Institutions Reform Recovery and Enforcement Act in 1989.	$293.3 billion
●	Airline Industry	2001	The terrorist attacks of September 11 crippled an already financially troubled industry. To bail out the airlines, President Bush signed into law the Air Transportation Safety and Stabilization Act, which compensated airlines for the mandatory grounding of aircraft after the attacks. The act released $5 billion in compensation and an additional $10 billion in loan guarantees or other federal credit instruments.	$18.6 billion
●	Bear Stearns	2008	JP Morgan Chase and the federal government bailed out Bear Stearns when the financial giant neared collapse. JP Morgan purchased Bear Stearns for $236 million; the Federal Reserve provided a $30 billion credit line to ensure the sale could move forward.	$30 billion
●	Fannie Mae / Freddie Mac	2008	The near collapse of two of the nation's largest housing finance entities was yet another symptom of the subprime mortgage and housing market crisis. In an effort to prevent further turmoil within the financial market, the U.S. government seized control of Fannie Mae and Freddie Mac and guaranteed up to $100 billion for each company to ensure they would not fall into bankruptcy.	$200 billion
●	American International Group (A.I.G.)	2008	When AIG was unable to secure a private-sector loan, the federal government intervened by seizing control of the insurance giant. Less than one month after the initial bailout and just days after AIG announced it had already drawn down $61 billion of its loan, the Fed stepped in with an additional $37.8 billion to bolster AIG's securities lending business. In November, with the insurance giant continuing to report heavy losses, the Feds revised the terms of the bailout and purchased $40 billion in AIG preferred shares.	$150 billion
●	Auto Industry	2008	In late September 2008, Congress approved a more than $630 billion spending bill, which included a measure for $25 billion in loans to the auto industry. These low-interest loans are intended to aid the industry in its push to build more fuel-efficient, environmentally-friendly vehicles. The Detroit 3 -- General Motors, Ford and Chrysler -- will be the primary beneficiaries.	$25 billion
●	Troubled Asset Relief Program	2008	The Bush administration has proposed a rescue plan to ease the current crisis on Wall Street. If approved by Congress, the Treasury Department will be authorized to purchase up to $700 billion of distressed mortgage-backed securities and other assets and then resell the mortgages to investors.	$700 billion
●	Citigroup	2008	After Citigroup lost half its value in the stock market last week, the government decided to throw a hefty life ring to the drowning bank. The government will back roughly $306 billion in loans and securities and will inject about $20 billion in capital. This is in addition to the $25 billion the bank received not too long ago. As part of the agreement, Citigroup will freeze dividend payments at one penny per share per quarter for three years, restrict executive compensation and absorb the first $29 billion in losses and 10% of subsequent losses. The government could absorb up to $247.5 billion of Citigroup’s losses.	$247.5 billion
●	Chrysler/G.M.	2008	Chrysler, General Motors and the Treasury Department have agreed upon terms for a bailout package to rescue the drowning automakers. The package consists of $13.4 billion in emergency loans; another $4 billion will be made available if needed. But it comes with strings. The auto giants must reduce their debt by two-thirds, and restore profitability, possibly by lowering wages and benefits. Limits on executive pay and a ban on the use of executive jets have also been imposed. Should the Obama administration determine that the two automakers have not reached the agreed upon goals, they will be required to repay the loans and face bankruptcy.

As for what happens after a U.S. government bailout, you can judge for yourself.

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