Bait and Switch is a common type of fraud in which a customer is lured to a product advertised at a cheap rate and then redirected to a more expensive substitute product. A local car dealer used to lure customers from three and four hundred miles using this technique.We Americans have just experienced the greatest bait and switch in the history of economics. Last fall the Treasury Secretary Henry Paulson used terror techniques to dupe Congress and the American people into accepting his bailout proposal.
One day our history books will record this as one of the greatest frauds in history. Mr. Paulson declared to gullible congressmen that if they failed to vote for the proposal the sky would surely fall. The market would drop two to three thousand points on a day that would be followed by another day of a couple thousands points come crashing down in a matter of days. If the bill was rejected another great depression would occur.
The Bush administration was so concerned by Paulson's ploy that they discussed the possibility of instituting marshall law in order to control hungry and unruly citizens. The bait was described as absolutely crucial to avoid a total collapse of the economy. The vast some of money would be applied to paying off "Toxic debt". On October 1, 2008 the bill was rushed through Congress and many congressmen voted for the bill even though they had no time to read it in its entirety. After the money was secured the switch took place. No one seems to be sure just where the money went but all are certain it wasn't used to buy toxic debt. Instead, it seems most was injected directly into the troubled banks. Some financial organizations tried to refuse the TARP (Total Asset Relief Program) funds but subsequently they were forced to accept them.
The massive fraud they were trying to cover up was a system in which loan institutions could receive high ratings for "liar's loans', loans that the recipients were unqualified to receive. Who was suppose to be regulating these institutions? The Ponzi-like scheme was based on the idea that bad loans pay better, they grow faster. Borrowing grew out of control. The loan was toxic because an illusion was created that it was a zero credit risk. The Bush administration simply turned their heads, either ignorant or fearful of the consequences of what they might find.
It seems that some of our greatest and most respected financial institutions were participating in fraud. Sadly, it looks like not only will they get away with it, they will actually get rewarded for it by the people we voted to represent us in Washington, D.C.!!!