There does not seem to be any way we are going to avoid shelling out a major amount of money to save banks from the unregulated greed of bankers. Dean Baker and Doug Henwood and every person with any economic expertise whom I find credible predicts disaster if we don’t.
But, as Baker pointed out on Democracy Now! this morning, the bailout can punish those responsible rather than rewarding them. It can also be done without creating new dictatorial powers for the executive branch of our government.
Congress must reject Paulson’s Plunder and enact a plan with these progressive principles from the Backbone Campaign:
A. The people who caused the problem or profited most should pay for it
1. Highly compensated executives total compensation should be capped or taxed heavily as a condition for being bailed out.
2. Tobin tax on all transactions in Finance, Insurance and Real Estate including currency transactions.
3. Government takes an equity stake, proportionate to the size of the bailout
4. Tax hedge fund managers’ income
5. Accountability - fire executives of failed companies as done in the UK, and abrogate their severance packages.
6. Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers.
B. Re-regulate to prevent this from happening again
1. Direct the Federal Reserve to intervene to prevent asset bubbles.
2. Extend reserve requirements to new security categories
3. Regulate the packaging of loans so they can be evaluated, rated, and priced rationally.
4. Regulate hedge funds and private equity funds in a way comparable to banks
C. Include Main Street in the bailout and invest in a new productive economy
1. Establish a moratorium on foreclosures, renegotiating mortgages or institute a rent-to-own plan to keep people in homes.
2. Create a major economic recovery package which puts Americans to work at decent wages, in productive jobs that add value to homes and communities.
3. Invest the taxes on speculation, executive compensation, and the surtax on the wealthy in clean energy, infrastructure, education, and health care.
You can send this proposal to Congress by clicking here:
By David Swanson
“No Blank Check” or “No %$#!*@ Check”
By David Swanson
The last time the Democrats all started bleating “No blank check - No blank check” it meant only one thing. They were signing a check and scribbling a bunch of nonsense in the memo line.
If history is any guide, we can expect a bill to come out of Congress requiring that the Secretary of the Treasury make a report to Congress within three months on all areas covered by the legislation, with the exception of those he chooses not to report on.
In particular, he will be required, if he chooses, to report on the progress being made toward compelling families that have lost their homes to pay for their own foreclosures. Fair is fair, and the Iraqis are going to start paying for their own occupation someday very soon.
The Treasury Secretary will be required to report, if he chooses, on key benchmarks, including equitable sharing among all plutocrats of our Social Security savings. This is a question of fair and equitable distribution of resources and might serve as a model for the still badly needed Iraq hydro-carbon law, which is also purely about fairness. The same goes for Medicare and the money raised from selling off our schools.
At least that’s the pessimistic prediction. On the other hand, there is an important variable that has been altered in this case. We are talking about throwing a trillion dollars of our grandchildren’s money at people who do not need it, but this time we’re proposing to do it for something other than war. There are no flags waving or war music playing for this one. As a result, it’s possible to see things like an article on CNN that begins:
“NEW YORK (CNNMoney.com) — ‘NO NO NO. Not just no, but HELL NO,’ writes Richard, a reader from Anchorage, Alaska. ‘This is robbery pure and simple,’ Anna from Denver posted on CNNMoney.com’s TalkBack blog this weekend. ‘It’s our money! Let these companies die,’ added Claudio from Plainville, Conn.”
Similar comments on wars are simply not published by CNN in the heat of an invasion. Will our so-called representatives notice the difference? I wouldn’t count on it. The smart investment right now is in a moving van pointed toward Canada.
I just read Thomas Frank’s “The Wrecking Crew,” and his central point is a timely one. When neocons wreck government they consider it a victory. Scandalous earmarks on bills are a good thing because they make people hate government, which is the higher purpose of all governmental malfeasance. When FEMA proves incompetent, success has been achieved, because the goal is to convince everyone that government is incompetent, that corporations are where all skill and responsibility can be found.
“People being pissed off at government is the very ore of right-wing discontent,” Frank writes. “Corrupt earmarks, inserted by conservatives, lead to conservative victory. But, you protest, nobody really falls for this. Everyone knows that the guy who got the ‘Bridge to Nowhere’ earmark was a conservative Republican. People know where the blame belongs, and they punish the malefactor.
“Maybe so. But remember the long-term effects of Watergate. While the immediate consequences of Nixon’s outrageous behavior were jail sentences for several conservative Republicans and the election of a bumper crop of liberals to Congress in 1974, Watergate permanently poisoned public attitudes toward government and stirred up the wave that swept Ronald Reagan into office six years later — and made antigovernment cynicism the default American political sentiment.”
All of which puts a different perspective on a government proposal to hand governmental levels of funding over to Wall Street. If the proposal goes through and the companies survive, the credit goes to Wall Street and the crushing debt requiring slashing of useful services goes to government. If the proposal fails, it also succeeds, by turning people against big government spending and interference in the Marketplace. After all, this proposal is “socialism,” and if you oppose it, then you certainly must oppose such identical horrors as “socialized medicine.”
For neocons, this was an easy decision. When you control the media, and your opponents are Democrats, there’s almost no way for you to lose. So why wouldn’t you propose borrowing a trillion dollars to hand out to your friends?
Of course, in theory, the Democrats could stop saying “No blank check” and start saying “No +&*^%!# check!” but I’m not going to hold my breath until they do.
The Eight Year Bailout
By David Swanson
Every time there’s a new Cheney-Bush scandal, every time we discover that Dick Cheney lied to Dick Armey, or another top Iraqi informed the White House there were no weapons, or another missile kills another large family in Afghanistan, or the wars in Pakistan and Iran get out of control before we’d realized they’d begun, or we discover that Cheney’s lawyer signed the Attorney General’s name to an authorization to search Democrats’ body cavities, or a chunk of the North Pole floats past the Republican convention, every single time this happens … there’s a moment of thrilling fantasy in which we can imagine that the American people or their so-called representatives in Washington will snap out of their hypnosis and ship the whole damn kleptocracy to the Hague in wooden crates.
And the same goes for the latest proposal to steal a trillion dollars from our unborn grandchildren and give it to Wall Street. And here I though the unborn were the only people these fascists did care about!
While I love the idea of clinging briefly to the notion that there really is something new here and that it will wake somebody from their slumber, I secretly have to wonder how exactly this differs from the past seven years and eight months. For that length of time, our government has enthusiastically gone out of its way to provide protection for (rather than from) predatory mortgage lenders, and to treat foreclosures as no more verifiably real than evolution or global warming. In March of this year Bush and his treasury secretary transferred a pile of public money to J.P. Morgan/Chase via the Federal Reserve to assume the liabilities and assets of Bear Stearns at a price not determined in the free market or via public bidding.
But borrowing money and throwing it at the people who least need it began before Cheney and Bush moved into their new public housing in 2001. Remember that Cheney had earlier served as secretary of “defense” and given Halliburton the contract to draw up a plan calling for giving more contracts to companies like Halliburton. Then Cheney had revolved out the revolving door to spend five years as the chief executive of Halliburton, during which period Halliburton had illegally done major oil and construction business with Iran, Iraq, and Indonesia, and had illegally sold nuclear technology to Libya. Cheney had then left his Halliburton job, along with a $33.7 million parting gift, to return to government as vice president, in which position he directed the Pentagon to grant no-bid contracts worth many billions of dollars to Halliburton. For at least two years as vice president, Cheney received hundreds of thousands of dollars from Halliburton in “deferred compensation.” Of course, that was justifiable in terms of the public good: society might have collapsed had Cheney not piled up more riches.
But his riches and Halliburton’s were a little crumb off the loaf of large-scale looting that has been the primary focus of our government all these years. While Joseph Stiglitz and Linda Bilmes called their book about Iraq “The Three Trillion Dollar War,” they were being very conservative. If you read their book, you find that incredibly conservative calculations place the amount of money wasted at no less than five trillion dollars, and mounting, with no end in sight. And who gets that money? Well, certainly not “the troops” so cynically used to squeeze it out of those gelatinous masses of spineless goo that go by the name “House” and “Senate.” And certainly not the Iraqi people. Nobody’s been liberated, and nothing’s been reconstructed. Over a million men, women, and children lie dead, but killing them didn’t cost five trillion dollars. Most of that money has gone to war profiteering robber barons, the people who handle the financing of the debt, and China.
The as-yet-unsuccessful proposal to give our Social Security savings to Wall Street is part and parcel of this same scheme. The mission of our government simply is to transfer wealth from those who need it to those who do not, and the most absurd thing about this is the number of commentators who claim that George W. Bush is in some way a “failure.” Most of us can just be grateful we have so little to lose, and give thanks to Nancy Pelosi for having taken impeachment off the table. She did so on May 7, 2006, and I would like to propose that the next Congress honor her wisdom by legislating a national holiday. Every May 7th from here on out let’s celebrate by getting too drunk to stand up straight and going pheasant hunting with shotguns.