Taking Aim at Bonuses based on $23.7 Trillion in Taxpayer Gifts

see bully-bonus-11-7-billion-jpm

If they earned it, what business is it of ours or the government? On the other hand, if they stole it, why are they not in jail?

If there is money for bonuses it is because of illusory (fake) profits from an illegal scheme that I would call fraudulent. If that is profit then so are the proceeds of purse snatching. So the bonuses, the “profits” and the “capital of the perpetrators belongs to the taxpayers, the homeowners and the investors — the only real victims in this mess.

The REAL tally of taxpayer aid is coming out from members of the media and oversight committees and it isn’t $700 billion the way they have said, and it isn’t $7 trillion the way some pundits have calculated it. It is $23.7 trillion, which is roughly TWICE the U.S. gross domestic product. That’s right folks, so far, as the tally is rising, Wall Street sucked out of our economy the amount we measure as all goods and services traded in the entire United States for two years.

Just think about it. If it were really about $600 billion in defaults or even $2 trillion in defaults, why would the entire economy have taken a nose dive? Why would the world have have been paralyzed? We’ve taken hits before and it didn’t bring us to the brink of ruin. This one did, because the percentage was more than 3% or even 15% of GDP, it was around 200%, so far and it is growing.

It isn’t the bailout or the stimulus that is putting us behind the 8-ball. It’s the money siphoned off by Wall Street who have successfully disseminated two myths through the lazy media: (1) the banks had losses caused by excessive risk taking and (2) government bailout is TARP. The truth is they never had any losses from mortgage defaults or defaults on SWAPS  (how could they with $23.7 trillion covering them?) and TARP is barely 2% of the taxpayer aid through entities created, preserved or promoted with the blessing of the U.S. Treasury and the Federal Reserve.

It shouldn’t surprise me, but it always does — somehow the people with the most money get closest to the microphone and the lazy press lets them take over the narrative. My personal choice is that if they committed fraud knowing of the huge catastrophic consequences and if that fraud and associated acts constitute a crime, then they belong in jail.

If you are serious about getting the past corrected as much as it is possible to do so, and serious about sending referees back onto the playing field so this really doesn’t happen again then start writing to your congressmen, legislators, governors, the White House and DON’T STOP. Make it a weekly ritual.

Those people in the tea parties might seem extreme and some of them might be racist, but their underlying theme is getting traction simply because the people are way out in front of their government this time and the political consequences will be very painful for those who think their jobs are secure. Their theme is that government has been stolen from the people and they are right. The only people to take it back are citizens who vote and people who are willing to serve in public office.

This should not be taken as an endorsement of the tea party — just their message. Wall Street stole our gross domestic product for two years and we want it back. If we get it back or any significant portion of it, state budget deficits will disappear or at least become manageable. Foreclosures will stop or be reduced to a  lower rate than before this mess started. Wealth will be returned at least in part to the middle class so the the economy can function without government stimulus and without that ridiculous cycle of debt.

We have to get over the myth that the banks took the losses from mortgage defaults. They didn’t. They always had the securities sold before committing the funds and used investor money to fund the mortgages. That is why it is incorrect to say that they took excessive risks. They took no risk at all. They schemed like the movie “The Producers”: to open a show that was sure to fail and bet on that. Where is the risk. None to Wall Street.

Of course that’s just my opinion. Maybe the ideologues are right. Maybe we should focus on personal responsibility, selectively enforce it against the middle  and lower class, and let the country go to hell.

So about those bonuses. In the law we have a doctrine called a constructive trust where a thief or other person who is not authorized takes title to property or money that is clearly the property or money of another. Under the doctrine of a constructive trust the current holder of the property, despite his pleas to the contrary is actually holding the property “constructively” for the real owner(s).

If there is money for bonuses it is because of illusory (fake) profits from an illegal scheme that I would call fraudulent. So the bonuses, the “profits” and the “capital of the perpetrators belongs to the taxpayers, the homeowners and the investors — the only real victims in this mess.

Tags: bonuses, constructive trust, excessive risk, fraud, homeowners, investors, risk, TARP, taxpayers
Posted in bubble, Corruption, Eviction, securities fraud |