Letter to the editor:

Bailout would let culprits off the hook

Philip K. Goldstein, Las Vegas

Friday, Oct. 3, 2008 | 2:05 a.m.

As a local bankruptcy attorney who has represented both debtors and creditors, I believe our current financial crisis has its roots in 2005, when Congress (Democrats and Republican alike) rammed through a bankruptcy bill that was ill-intentioned and ineffective.

It wasn’t so much that bankruptcy was the problem, but that the underlying issues were ignored. Bankruptcy attorneys and bankruptcy judges warned of an out-of-whack housing and lending industry to a Congress that was not listening. Apparently it was too busy collecting major donations from the banking industry. I contacted our senators and representatives of both parties but was ignored.

I was already meeting clients who were not in good financial shape but were somehow qualifying for multiple home mortgages. I saw the hotel car jockey who had four houses, with a $400,000 mortgage on each property, while earning only $30,000 a year.

I saw homebuilders eager to sell to anyone, without financial information, because they didn’t hold the mortgage. I saw the broker and real estate agent push through a sale, because they made a big commission.

I watched the mortgage company and bank buy this questionable paper, because they were passing it on to Wall Street. I watched Wall Street buy the paper so it could package “mortgage-backed notes” and pass them on to their investment customers. Now we see the Wall Street companies with the bad paper amid their own collapse.

If Tony Soprano had put together such shady, nefarious deals, the feds would be all over this with RICO (Racketeer Influenced and Corrupt Organization Act) charges, throwing many people in jail! Why are we letting these bank and mortgage people off the hook?

Meantime, the banking executives walk out with millions in compensation as their companies tank and the shareholders lose everything. Too bad our politicians didn’t listen to us in 2005, and too bad they won’t listen to us now.

Discussion: 16 comments so far…

By jfnance32

10/3/08 at 2:51 a.m.

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Joe 'Gaffe' Biden was a leader in getting that bankruptcy bill passed.

His son made over a half of a million dollars in lobbying fees in getting that bill passed.

Reid's family makes millions of dollars in lobbying fees in DC each year, too.

You gotta like those family values.
By gunowners4obama

10/3/08 at 6:14 a.m.

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This is the time for Americans to take up the fight, one way or another. Those mentioned in this well-written letter need their assets seized and their wages garnished until the country is paid back. If the government doesn't do it, then the people of this country need to do something.

You know the senators will shore up the stock market, because they have so much in it, but most won't go far beyond that except as it affects their re-election. And their re-election depends to some degree on the money they receive from the culprits. This is up to us to do something about, and not rest until people pay. Our elected representatives should not be voting for a long-term plan until it requires compensation from culprits.

By the way, since the Reagan years we've seen the stock market turn from a risk-based enterprise into something Americans see as a right to make money - stocks aren't supposed go down. What's with that $&!#? And who is responsible for investing workers' retirement funds in stocks? They need to pay as well.
By azsk8fan

10/3/08 at 7:47 a.m.

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And of course there aren't ANY republicans raking in any lobbying fees right? Thought so.
By redferret

10/3/08 at 7:51 a.m.

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What are you talking about azsk8?
Republicans are as pure as the driven snow. Their stand against the gays is not at all contradicted by other party members. They care deeply for the poor, and love helping the middle class.
These people really do care about the suffering of uninsured children and want to help. OH wait, I've got most of that backwards.
By tokaloshe

10/3/08 at 8:19 a.m.

Comment removed by staff.
By uddeboda

10/3/08 at 8:52 a.m.

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Its just sleaze right across the board
By redferret

10/3/08 at 9:12 a.m.

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wow tokaloshe, where the comments about the laziness of the poor?
So kindergarden eh?
You're utter lack of historical knowledge leads me to believe you barely passed high school. The stock market tanked in October of 1929. Demand/consumption had already slowed drastically before 1932. Or are you just trying to pin the blame for the depression on FDR?
Also the problem was the cascade effect of the stock market tumbling, housing tumbling, and the auto industry tumbling. The result of the latter two falling off meant a drastic decrease in the need for the sundry raw materials needed to make homes and autos. All of that happened between 1929-1931. By 1932 we were trying to get out of the hole that had developed. Also increasingly the draught in the bread basket regions of the US caused an accute farming crisis as most of the area's soil literally blew away in dust storms. All in all the overreaching of the 20s popped and receded drastically at the end of the 20s/very early 30s. All of which was under the watch of Hoover, hence the reason why tent towns were called Hoovervilles.
Another linking factor was the loans that were extended to Germany as a part of the Dawes Plan to help Germany out on its reparations to England and France. Once Germany defaulted on those loans, a bad situation in the US became worse.
So basically once you've actually read up on that time period and not just spouting off talking points that AM radio has spoon fed you we can have an academic talk.
By tokaloshe

10/3/08 at 9:23 a.m.

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I never said anything about 1929,
you need to check your history, I said "by 1932"
everyone knows when the crash was.
In 1930 the economy had not yet collapsed.
consumer and business spending were down in 1930 but not horribly so.
It was late 1930 when panic started, and banks started to go under eventually hundreds. don't ever question me on history.
By redferret

10/3/08 at 9:28 a.m.

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Just did, and consider yourself powned on that. And I will continue to question you when you evince shaky knowledge of the subject...as well as a total disrespect for those less fortunate.
By tokaloshe

10/3/08 at 9:35 a.m.

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The kindergarten remark got my post removed but if it was still up there you would see that I was more specific than you, and more accurate.
I'll bet you listen to NPR.
By redferret

10/3/08 at 9:39 a.m.

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Don't think so, and you gave bland generalities. Also I don't listen to radio. I would listen to NPR, but half the time it seems like their talking about some obscure library act that's going through somewhere. In the car I prefer music, or Adam Corrola in the morning if just for their "news" segment that usually talks about some moron somewhere, like the idiots that dug up a grave to make a bong out of a dead 1918 11 yo's skull. You simply can't make that stuff up.
By tokaloshe

10/3/08 at 9:58 a.m.

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anyway redferret,
my point was not to get into the 1929 crash,
my point was to timeline 1930 attitude to todays attitude. unemployment shot up in 1931, not 1930.
20 percent unemployment, check it redferret.
Everyone said why should i bail out so and so? in 1930 they said that. just like people say now, why should i pay for wall street, which i do not understand, beacause that is not what started the problem, it enhanced it greatly of course.

All this said I think 700 billion really makes no difference at all, because I don't think the plan will be executed properly and efficiently, greedy people already have their eyes on that money. In one to two years at most
we will be forced to make lifestyle changes.
By tokaloshe

10/3/08 at 10:09 a.m.

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actually allow me a correction,
1931 unemployment; 15.9 percent
1932 unemployment; 23.6 percent
1933 unemployment; 24.9 percent

remember in 1929 unemployment was 3.3 percent,
by the way redferret or should i say robinhood?
It is not ok for me to refer to someone as poor lazy and jobless? are there no people who exist like that?
I was not picking on a poor person, the person I was picking on fit the earlier description, big difference, I'll have a beer with a poor guy any day, but i dont like drinking beer with a poor lazy guy ever.
By tokaloshe

10/3/08 at 10:10 a.m.

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1930 unemployment; 8.8 percent
2008 las vegas; 7.1?
By tokaloshe

10/3/08 at 1:20 p.m.

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my remark to philip again,
You are misled. let me give you examplo-----
people say (including you)
I am not paying for those fat cats
I am not bailing out wall street
Why should Joe six pack pay? (really stupid)
(who is joe six pack) I know it aint nance and i am darn sure its not redferret.
You are the government, you philip are wall street you in every essence of the word are what you won't fix, I am the same as you, human nature is to blame, but we are the ones who created this, yes, we are all connected.
When we are in war times and see people die, who takes accountability? God? no. people. mankind.
Hey philip, I would buy you a cup of coffee but If we do it your way with no bailout I guess i'll see you in the soupline.
By tokaloshe

10/3/08 at 1:26 p.m.

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A man named Mishkin owned a small business in 1930 and he said the same thing, I am not paying for the crazy stock market people and their mistakes. In 1931 Mishkin lost his business, and never had another decent job the rest of his life, remember unemployment did'nt fall back below 14 percent until 1941.
This story is well documented look it up.
If somebodye lies to you, do you distrust everyone from now on?