Alternatives to bailout

It seems the “inevitable” bailout of Wall Street might not have been as certain as the Wall Street Journal and New York Times made it out to be.

This bailout will happen in some fashion in the coming weeks, barring an all-out grassroots movement to kill the bill. But the bailout is not inevitable because it is inherently the right thing to do, but rather it is expected due to the type of people crafting the legislation who will authorize the largest nationalization in the history of humanity.

The chief player in this bailout melodrama is Treasury Secretary Henry Paulson, former chief executive of recently defunct Goldman Sachs.

Senate Banking Committee Chairman Christopher Dodd and Rep. Barney Frank, chairman of the House Financial Services committee, also have long-standing ties to many key players in Wall Street and have been fervent supporters of this bailout.

When this many ex-Wall Street executives, friends and lobbyists have this level of bipartisan consensus, the American people should be extremely wary – since only a third of the U.S. views it favorably.

The consensus by the political elite is that the free markets will be too slow to fix the current predicament, or so they would like the public to believe.

They also have determined a return to a sound monetary policy and the abolishment of the Federal Reserve System off the table.

The extortion racket that is the Community Reinvestment Act should be immediately repealed.

The act forces banks to make loans to less-than-credit worthy borrowers, sub-prime, at below market level.

Once the system of ever-rising prices due to scarcity and market over-saturation – in conjunction with a lack of real equity in housing – now the system is destined to collapse after a sizable portion of home owners are priced out of their homes.

The practice of fractional-reserve banking should also immediately be abolished, discontinuing the ability to loan 90 percent of its deposits and then call the assumed profit on long-term interest loans an asset. It also allows banks to loan even more money due to disingenuous accounting practices.

The practice of artificially manipulating interest rates must discontinue before a sound economy can return.

E-mail James Cannon II at staff1@unfspinnaker.com.