THE NATION’S FINANCIAL CRISIS Part 1:
The 7/11 SOLUTION
Bankruptcy has two very different realities. Chapter 7 is a bankruptcy liquidation and end of a corporate life. Chapter 11 is a reorganization of a business within limits. In both 7 and 11, the investors, creditors and business partners take a haircut. In effect, the partners, and those who did business with the filing company, pay the price.
In today’s reconstruction, starting in the W years and continuing today under O, U.S. taxpayers, you and I, are the suckers picking up the tab. Unfortunately, I have to use profanity like AIG, Citibank and those other “words” who the U.S. is bailing out.
The reasons given by the bailout boobs to justify the U.S. capital infusion is that allowing these businesses to go into bankruptcy by filing under Chapters 7 and 11 would impact the nation’s economy. Why don’t we let those companies file under the bankruptcy laws so that those businesses, and people who they were in bed with, get the haircut they deserve?
The U.S. Treasury can thereafter offer some source of financing for a recovery. To bail out the big AIGs and Citibanks benefits the thieves who were their partners in their demise. In the meantime, those executives get their bonuses. Under Chapter 11, this would not happen.
In Part II, I will set forth a pattern that has been a major source of this nation’s financial crisis.