Greece’s prime minister abandoned his explosive plan to put a European rescue deal to popular vote Thursday, keeping his government alive â€” but passionate squabbling in Athens left the country’s solvency in doubt and the eurozone in turmoil.
Papandreou sparked a global crisis Monday when he announced he would put the latest European deal to cut Greece’s massive debts â€” a hard-fought accord that took months of negotiations â€” to a referendum. The idea horrified other EU nations, Greece’s creditors and financial markets as investors fretted over the prospect of Greece being forced into a disorderly default.
Reminds me of our twice over TARP vote. So much for democracy, the moneyed interests win again, maybe..
The political troubles of Greek Prime Minister George Papandreou mounted on Thursday after his finance minister publicly opposed a plan to tie a referendum to the nationâ€™s membership in the euro zone.
â€œGreeceâ€™s position within the euro area is a historic conquest of the country that cannot be put in doubt … [and this] cannot depend on a referendum,â€œ said Evangelos Venizelos, Greek finance minister and deputy prime minister, in an early-morning statement issued following his return to Athens from Cannes, France.
Analysts at Danske Bank noted that Papandreou is rapidly losing support, which may open the door for a unity government.
â€œA unity government passing the austerity package as well as general elections seem plausible outcomes,â€ they said. â€Both scenarios imply that no referendum will take place.â€
Shouldn’t the people of Greece have a say in this? Apparently not, according to some.
Policy-makers better listen up and do so soon. This, along with Rick Santelli (and by the way, CNBC ran a poll on the “TeaParty”, and over eighty thousand people said they would show up!) is tapping into what America feels about all this nonsense.
Let’s face the facts – 92% of Americans are either paying their mortgage or don’t have one. We didn’t use our homes as ATM machines. We didn’t lie about our incomes. We played by the rules and do not have bone-crushing debt loads.
The rest of America is a different story.
I was watching this video today of Nouriel Roubini, Paul Krugman, Suzy Welch and George Will. It’s interesting that the proponents keep making the point that this solution targets the “social problem” of people who lost their jobs and now can’t pay their loans. But this program doesn’t target people who lost their jobs, it targets people who qualify for the new lowered rate / principal loans. (i.e. people who still have a job.) The only folks I can think of who obviously wouldn’t qualify for their current mortgage, but do qualify for a reduced mortgage at taxpayers expense are the speculators who took out risky loans with balloon payments or interest only periods.
Also, in the interest of fairness, why is there no claw back in these subsidies so that when these owners sell their property down the road for a profit (assuming they don’t default anyway) the taxpayer gets paid back?
CBO estimates that the net cost of the TARPâ€™s transactions (broadly speaking, the difference between what the Treasury paid for the investments or lent to the firms and the market value of those transactions) amounts to $64 billionâ€”that is, measured in 2008 dollars, we expect the government to recover about three quarters of its initial investment.
It’s been so successful, Obama plans on accelerating the mortgage assets purchase program using the newly approved TARP fund. Yeah!
While Summers told Congress Obamaâ€™s Treasury would use between $50 billion and $100 billion for a mortgage modification program, a good chunk of the rest of the funds could be used to buy the illiquid assets from banks. The FDIC, which has authority to take â€œany actionâ€ with insured deposit-taking firms deemed necessary to counter â€œadverse effects on economic conditions or financial stability,â€ could also play a role.
â€œWe think by leveraging TARP funds in this way, you could have a significant capacity to acquire troubled assets,â€ Bair, who is set to stay on under Obama, said. Officials could â€œrequire those institutions selling assets into this facility to contribute some capital cushion themselves.â€
When governments nationalize a business, they do it like this.
What’ really frightening is that this appears to be a common theme amoung Democrats these days. Case and point – a post from HuffPo yesterday –
President Bush in a press conference today strongly supported drilling, arguing that it would greatly enhance supply and take pressure off of oil prices.
Well and good. But if this is the moment to consider opening large swaths of offshore federal lands to drilling it should also be the moment to consider the creation of an American National Oil Trust, much in keeping with the highly successful and citizen-owned Norwegian Oil Trust.
Is this for real? Do a majority of Democrats really feel this is the right solution?