One aspect of this package, that receives little attention from the media, is the Housing-Financial Industry Bail-out.

I received a letter from Senator Barbara Boxer, regarding her advocacy of this part of the bail-out--which consists of raising the conforming loan limits on mortgages that Fannie Mae and Freddie Mac can buy, from the current $417K to an astronomical $795K.

My take on Boxer's sellout to the Financial Industry is this:

Boxer has an undergraduate degree in Economics, and she knows exactly what will happen if conforming loan limits are raised, on loans purchased by Fannie Mae and Freddie Mac. (and raised tremendously—from the current $417K to ~ $800K) This will provide more loan money to maintain current home prices. It will help keep California home prices unaffordable. It will prevent them from falling to a true market level, consistent with historical levels dictated by Californians' income.

And it will put taxpayers on the hook for the inevitable bail-out of Fannie Mae and Freddie Mac. Worse still, it will make the size of the taxpayer-funded bailout even larger.

This is an unabashed bail-out of banks, mortgage brokers, MBS purchasers, and housing speculators. Not only does it bail out the same financial "geniuses" and con-artists who created this mess, it actually rewards them. And it does so at the expense of most Californians, especially those Boxer claims she's trying to help.

If there are 10 million Californians who are poor enough to be on Medi-Cal, they must also be eligible for Welfare (TANF). This means there are at least 10 million Californians that will be hurt by keeping home prices high by raising conforming loan limits.

But this 10 million number grossly understates the number actually affected. Most recent survey's put California home affordability at 10-12%. Which means that 88-90% of Californians can not
afford homes. The proposed increase in conforming loan limits hurts all of that 88-90%, ensuring that homes will remain unaffordable.

Once again, our government has concocted a "stimulus" package that offers only crumbs to most Americans--hoping to disguise its true intent—that of bailing out their rich campaign contributors and cronies in the Financial Industry.

The goal is to save the richest Americans from the consequences of their greed-motivated actions. The goal is to ensure that those at the top can continue privatizing profits, while socializing their losses.

The goal is to maintain our Corporate Welfare state, making sure the wealthy don't become less wealthy—by allowing them to dump their losses on non-wealthy taxpayers. This is just another reverse Robin Hood scam--ensuring that wealth continues to be transferred upwards.

It's no surprise that the Financial Industry bailout aspect is rarely mentioned by the news media. They're hoping no one will find out about it. They're hoping to fill air time by discussing the other aspects, and divert attention away from the Corporate Welfare aspect.

The Financial Industry is getting plenty of help already, Senator Boxer. How about worrying more about ALL of your constituents, instead of just the rich ones? How about worrying about the voters, instead of your big campaign contributors only.

There may be some good proposals in the suggested package. But they're more than nullified by the Housing/Financial Industry bail-out. If the Corporate bailout aspect becomes part of the package, most Americans will be worse off, not better.

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