The biggest bank failure of 2009 happened last week when the FDIC moved to shut down Colonial BancGroup of Alabama, along with four other banks, bringing the total thus far this year to more than 70. A quick deal with BB&T to purchase Colonial caused its shares to rise. FDIC will be shouldering much of the losses, of course, which adds billions to the bailout of the banking system while at the same time working to further bank consolidation for the wealthiest banks still standing.

Such situations are a ‘win-lose’ proposition. Win for BB&T and their stockholders, lose for We the Taxpayers. This scheme where the feds cap the buyer’s losses at taxpayer expense is just another outrage to the hard-pressed public at a time when all the glorious pronouncements of economic recovery have yet to even begin to touch the lives of the general public still losing jobs at a high rate while no new jobs seem to be forthcoming.

And on top of the still-dismal economic situation for average people in this country, now we have the extremely contentious health care reform debate ongoing that looks more and more like bad street theater every day. Between the noisy hoards of idle old folks bused around the country to shut down discussion of provisions during Town Hall meetings held by vacationing congresscritters, and the absurd lies being spewed by the usual suspects at FoxNews and right wing radio, it’s looking more and more like the final result will be a significant new tax on the working poor that will be earmarked directly to the health insurance industry by means of mandatory purchase of junk insurance.

The situation is really health insurance reform, though reform isn’t really a good title either considering how much the Death by Spreadsheet crowd will end up getting from the public directly and from the government as subsidies. Yes, they will have to stop excluding anyone with a pre-existing condition, retroactively canceling policies if the insured person gets sick, and simply not paying for covered health care after the fact. But they will more than make up for however much this costs them by the ~40 million new policies the uninsured will have to purchase, and with government subsidies for many of those as well as losses incurred by having to honor their contracts.

And I am sure readers know that “junk insurance” – insurance that has a high deductible and hefty co-pays – isn’t going to help a person living on a shoestring budget already. Whatever ‘extra’ money those people might have saved over months to pay for a doctor’s visit will be taken by the insurers for that junk insurance. Leaving the working poor even worse off than they were before.

Even the so-called “Public Option” Obama and other Democrats have been touting is just another insurance option. Basic buy-in Medicaid, for which the government plans to auto-deduct from people’s bank accounts to make sure their premiums get paid on time. No word yet on whether they’ll do that for bank accounts that don’t have enough money in them to cover the deduction (like mine, for instance), thus causing families to suffer huge bank overdraft charges and messing up their other payment plans, or if a too-slim bank account qualifies people for automatic subsidy to make those insurance payments. But if I were to guess, I’d guess it’s just going to shaft the barely getting by yet again by throwing their bare budgeting into chaos and costing them more than they can pay.

Isn’t it funny how the wealthy and well-off are somehow able to convince themselves that we at the low end of the spectrum somehow have lots and lots of ‘extra’ money they should be able to take at will?

At any rate, we will not know until Christmas at least what the health care bill looks like or what’s in it. None of us should be holding our breath hoping for real reform or actual access to health care. In the end it’s way more likely that the government will simply be able to claim that they’ve ‘fixed’ the access problem – those ~50 million uninsured and ~100 million underinsured – so the U.S. will no longer rank #37 on the list of 37 industrialized nations on all measures of health care. While We the People will simply be poorer than we were before. I’d like to be pleasantly surprised, but don’t expect to be so long as people like Sarah Palin and Glenn Beck are spouting lies about killing granny and the Medicare crowd is hollering for the government to keep their hands off their Medicare. Stupid and/or evil people always seem to win in this country.

If you haven’t called or written your representatives and senators yet, please do so. We don’t have much of a voice in what happens in this country, but they at least need to know we’re out here and want real access to health care instead of just another theft of what little we do have. Then when we lose we’ll have earned our own bitching rights!

One of my favorite series bloggers sarahnity has a weekly series at Daily Kos called “Frugal Fridays” that offers different tips and ideas every week, by her and a number of volunteer authors, on how to make your money go farther, how to earn money on the side, and how to hang on to what you’ve got. Last Friday the theme was frauds and scams geared toward those being most harmed by the current economy, entitled Don’t Get Fooled Again.

I’m just going to list the major confidence games going around in recent weeks/months, and the several resources and good advice offered to help people determine if something’s on the up-and-up or just more grifters targeting the weak to make themselves strong. The series is awesome, definitely worth bookmarking by all readers of this blog and checked every Friday afternoon for the latest in resources for the frugal.

The major scams making the rounds these days – particularly via the internet – are sometimes old and sometimes new. There’s the standard Work from Home sting where you have to pay to find out who’s hiring. If someone wants your money before showing you the want ads, it’s likely a scam. Real employers aren’t looking for you to pay them, they’re seeking people to pay for good work.

Then there’s the new-ish trick of Facebook identity theft where a clever grifter assumes an identity from among your networking ‘friends’ (often a relative) to beg for money. Be suspicious if someone on your Facebook page suddenly asks for money. Often the real person knows nothing about it – so check on regular email before sending anything.

There are also property tax scams going around where someone tells you you’re paying too much for property recently devalued. All you have to do is send money and the scammers won’t do anything for you. These can come in the regular mail too, so always do your homework and check with your real property tax officials about what’s what. If you really do pay too much, they’ll let you know for free. In line with this there are also housing and mortgage frauds, where someone offers you a “special rate” to refinance, take your money and disappear. Don’t fall for it.

There are more, of course. Please click on Sarah’s linked diary and check them out, there is good advice on how not to be victimized and who to report suspected scams to in your state and locality.

We’ve seen a lot of desperation as the world (and US) economy tanks in the wake of the mortgage-loss pyramid scheme crash. We’ve heard a lot of hyperbole and rhetoric from the candidates who want to replace Bush-Cheney as President and Vice-President of the United States. This is The Week That Was, votes will be counted tomorrow night, and we should know sometime in the wee hours of Wednesday which of the contestants gets the erstwhile “prize.”

As Wall Street began its precipitous fall, Republican candidate John McCain was busy informing the nation that the ‘fundamentals’ of our economy are strong. No, they aren’t strong, they’re utter failures after years of massive tax cuts to the wealthy, heavy borrowing to support two wars, and the “Unfettered Free Market” [TM] frenzy allowed by blanket de-regulation of the banking and investment sectors.

To get an idea of just how outrageous things had gotten, consider the so-called “Mortgage Meltdown” that took so many once-staid capitalist houses into ruin. We all know that housing prices had ballooned in most urban areas of the country, a ‘bubble’ sustained by the practice of lending to workers whose incomes haven’t seen even a minimal rise in more than 30 years, for houses that cost easily twice as much as they could hope to afford and three times what they were actually worth. Many of these loans were made with specific criminal intent to skim fees off the top, and saddled with adjustable interest rates that worked just like time bombs to force people into bankruptcy.

Knowing that these time bombs would explode X number of years down the line, the banks and futures traders on Wall Street invented a new paper vehicle called “Credit Default Swaps” for the express purpose of betting on strapped families defaulting on their mortgages. [Greenspan Slept as Off-Books Debt Escaped Scrutiny]These are an insurance vehicle, insurance to be paid out to the holders of the policies on bad mortgages. And those policies – as “Credit Default Swaps” were sold and resold hundreds of times. This is what led corporate insurance giant AIG to be one of the first Big-Time Players to fail, our government moved right in to nationalize it.

This situation is a prime example of the philosophy of “Privatizing the Profits, Socializing the Losses.” It’s a bail-out to rich gamblers necessitated by unregulated greed. Pure and simple. Look at how it worked…

The number of risky, possibly criminal, largely ARM mortgages in the US that have or soon will default amounts to approximately 1% of all the mortgages outstanding. The re-insurance scam ended up valuing these mortgages at 5 times the annual Gross Domestic Product of the entire world. They were of course never worth anywhere close to that much, this is just the amount of insurance pay-outs once they DID default. And default they did, that brought Wall Street – and the world markets which participated in the scam – to their knees.

Despite the fact that candidate McCain did not seem to have the slightest grasp on the impending doom (his chief financial advisor Phil Gramm famously called people concerned about the situation “whiners”), his tax promises to the nation if elected is still to maintain George W. Bush’s blanket tax cuts to the top 2% of wealthy citizens and corporate giants. Democratic challenger Barack Obama would reverse this situation by taxing the rich and giving significant tax cuts to the middle classes. Even to the point of eliminating income taxes altogether on seniors who make less than $50,000 a year.

McCain of course calls this tax-the-rich situation “Socialism,” as if that’s as scary a word these days as it was back in the ’50s. It is not. All governments receive taxes and use them to support infrastructure, public education and other social programs, thus all government is essentially socialist at heart. The fine points always apply to who pays the taxes and gets the benefits of governmental largesse.

CNNMoney recently published an article about the different tax plans of the candidates, along with a breakdown of just how much your taxes will go up or down according to your income. McCain, Obama and your tax bill is recommended reading for everyone out there who hasn’t already voted, and is concerned about the recession/depression that we now know will last more than a year.

Then get out there and vote on November 4th, as if your way of life depended on it – because it does!

Links:

McCain, Obama and your tax bill
Greenspan Slept as Off-Books Debt Escaped Scrutiny
Economists see recession through 2009