Friday, July 31, 2009

Auto Clunker Plan Update : Car Allowance Rebate System to be Extended by $2 Billion as House Passes Emergency Funding : Senate Approval Pending

Matthew L. Wald reports at the New York Times that House Votes for $2 Billion Fund to Extend 'Clunker' Plan.

What Goes on Here? Cash for Clunkers Auto Rebate Program Runs Out of Money While Bankdog Millionaires Stuff their Pockets with Bailout Money

Slumdog Millionaire - the rags to riches story of a Mumbai slum child - won eight Oscars at the 81st Annual Academy Awards in 2009, including best film of the year.

Based on recent reports about billions of dollars in bailout money paid out as "bonuses" by banks to their employees in spite of the financial crisis which many of the bonus recipients surely helped to create, we suggest a "rich to richer" U.S. cinema sequel with the title "Bankdog Millionaire".

Many newspapers have already picked up the facts upon which the "bankdog" story could be based. In the New York Times article, for example, Louise Story and Eric Dash report in Big Banks Paid Billions in Bonuses Amid Wall St. Crisis that:
"All told, the bonus pools at the nine banks that received bailout money was $32.6 billion, while those banks lost $81 billion."
The various news reports rely upon a report just released by New York State Attorney General Andrew Cuomo under the title "No Rhyme or Reason: The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture", which concludes on the basis of a probe into the way that big banks operate that:
"When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were still paid well," Cuomo said in a summary of the investigation. "Bonuses and overall compensation did not vary significantly as profits diminished."
The Los Angeles Times writes:
"The attorney general’s report -- subtitled, "The ‘Heads I Win, Tails You Lose’ Bank Bonus Culture" -- focuses in part on the 2008 bonuses paid by major banks that received government capital under the Troubled Asset Relief Program.

He found that Citigroup Inc., for example, paid out $5.3 billion in bonuses for 2008 even though the bank lost $27.7 billion and needed $45 billion in TARP capital to bolster its balance sheet.

A total of 783 Citigroup employees got bonuses of at least $1 million, Cuomo said.

Merrill Lynch & Co., which lost $27.6 billion for the year, paid bonuses of $3.6 billion, according to Cuomo’s tally."

Those are bank rip-offs which make normal criminal "bank heists" look like chicken feed.

At the same time - just to put things into the proper financial and political perspective - the paltry $1 billion that the U.S. government allocated for the nationwide "Cash for Clunkers Auto Rebate Program" to get the automotive industry moving again was used up as an amount in the first week of operation. Matthew L. Wald (with Katharine Q. Seelye as contributor) at the New York Times in 'Clunkers' Auto Rebate Plan So Popular That It’s Broke writes:
"New-car shoppers appear to have already snapped up all the $1 billion that Congress appropriated for the “cash for clunkers” program, leading the Transportation Department to tell auto dealers Thursday night to stop offering the rebates."
Apparently it is more important to funnel billions of dollars into the bank accounts of the greedy.

Essentially, when all is said and done, the "bailout banks" and other big banks and investment banking houses are operating as self-service pots of gold for their top echelons, who smilingly stuff their pockets with their bank's money, relying on what they of course claim are legitimate bonus contracts - made by them, but which contracts are actually designed for those top echelons to massively misappropriate the assets of investors and depositors - and now the bailout taxpayers - by cleverly premeditated plans of what amounts to nothing more than passively collusive corporate embezzlement. The Legal Dictionary at Free Dictionary defines embezzlement:

"There was no crime of embezzlement under the Common Law. It is a statutory crime that evolved from Larceny. Whereas larceny requires a felonious trespassory taking of property at the outset, embezzlement is a wrongful appropriation subsequent to an originally lawful taking. Embezzlement is, therefore, a modification of larceny designed to cover certain fraudulent acts that do not come within its scope. Although they are mutually exclusive crimes, larceny and embezzlement do overlap slightly under statutes in some states.

Embezzlement was created by the English legislature, which designated specific persons who might be liable for the offense. These were essentially persons entrusted with another's property, such as agents, attorneys, bankers, and corporate officers.

The English definition of the offense is followed in the United States. Statutes do not usually list the persons who might be liable but, instead, generally describe the offender as a person entrusted with, or in possession of, another's property."

Exorbitant bonus contracts bearing no reasonable relationship to the salary of employees or to the actual services or benefits performed are merely cloaked embezzlement agreements - and recipients of the money know full well they are ripping off their depositors and investors.

This is corporate corruption in its most highly developed state. Monies are not embezzled secretly, but are rather misappropriated in gigantic quantities right in front of everyone's noses under the cover of legitimacy.

It is a nearly foolproof scam for the inner circle of bankers - who are aided by the incompetent ignorance of many of the popularly elected - and increasingly ill-qualified - representatives in Congress, who sometimes seem to prefer to waste their time on religious rather than secular issues or, for example, on senselessly grilling Supreme Court nominees ad nauseam rather than properly legislating the nation's affairs.

Perhaps people in Congress should be given CLE lessons in the difference between true entrepeneurial capitalism - which should continue to be rewarded - and blatant bank theft - for which many of these bonus recipients should probably be compensated with a term in jail.

The odds that anything will improve in the near future are however quite small and all signs point toward the continued plundering of America by a small and rapacious minority of greedy yahoos (in the Gulliver Swift sense) and their clueless legislative and regulatory enablers.

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