Centerblue.org

The more I read and think about the proposed government bailout for Wall Street, the more outraged I get. As are many others across the entire political spectrum, I’m coming to view this bailout as nothing less than the mass raping of the American taxpayer–with no accountability, no help for people in foreclosure who really need it, and no stopping the people who benefited from this disaster from benefiting even more.

Nobody puts the flaws I find in this proposal better than my friend and consumer advocate Boztopia. I shamelessly rip this off from his blog, because I could not possibly say it better myself:

No oversight. The Bush administration is asking Congress to hand it a blank check for $700 billion without any controls or strings attached. This is the same corrupt regime that has wasted uncountable billions in Iraq through fraud, graft, corruption, and simple wasteful spending on unnecessary projects. The same regime that demanded vast new powers of surveillance with only the most minimal oversight to ensure that it is not abused. Do you really think Paulson is going to tell the truth in those reports to Congress, or that Congress will do anything about it if he lies?

Unchecked power. If this bill passes as written, it will make Henry Paulson the most powerful man in America, with incredible leverage to utilize trillions of dollars’ worth of capital as he sees fit. As an unelected official not chosen by the people, do you trust him to look out for your interests?

Foreign bank bailouts. Henry Paulson is on record as saying that Americans are too stupid to care if he uses our money to prop up banks based outside of the United States (Seriously, go read this article–that’s essentially what he says.) If that doesn’t set my right-wing friends in firm opposition to this plan, I don’t know what will.

No protections for homeowners or curbs on CEO pay. Paulson is actively resisting any attempt to add punitive or regulatory measures to the package, including foreclosure protections, additional economic stimulus packages, or stronger oversight of the financial markets to prevent something like this from happening again. This is a life raft to the very people who got us into this mess, mortgaging our financial futures to do so.

Rewarding irresponsibility. This is a clear message to Wall Street and the global markets that it’s completely okay to engage in ever-more-complex and opaque financial tomfoolery, because the government will bail you out when it gets rough. No consequences, no responsibility, no real fear of the vicissitudes of capitalism. In a true free market, banks that overleveraged themselves with crappy loans and nonsensical derivatives would collapse. It would be painful and turbulent, but is that really worse than enabling them to keep on going with the same awful practices that have left thousands of people with homes worth less than what they paid for them, with 401ks barely performing at a value worth the investment, and a dollar that can’t buy a fraction of what it used to? Again, tell your right-wing friends that this is as blatant an example of ignoring personal accountability as there ever has been.

Constraining our future. As I said yesterday, not only will this bailout deny us access to capital that we could have used for countless new projects and investments that we desperately need, but it will further constrain us from engaging in any sort of new infrastructure building or real innovation to put this country back on track. While Obama’s administration may be able to push through legislation that amends or changes existing laws, the real big-ticket items–climate change mobilization, national health care, broadband investment–will not happen without capital to fund them. This is a political time bomb designed to sabotage any attempt Obama will make at real change by hamstringing him financially until the Republicans move to take back Congress in 2010. It’s no coincidence that Paulson’s package is on a two-year timeframe, after all. [Me: I don't agree with this last characterization, I think the intent is truly to rescue the economy no matter how misguided the effort--but I can see why Boztopia would feel as he does.]

It won’t solve anything. Most of all, this bill is a Band-Aid on cancer. As this excellent article by Joshua Holland details, our financial structure and system is fundamentally sick, crippled, and retooled to act solely as a process to transfer money from the many to the few. Pumping more capital into it is like giving a blood transfusion to someone who’s undergoing heart surgery and is being kept alive by machines–it’ll help keep them alive, but it won’t fix the problem at hand.

On the last point, the issue really is that nobody knows if it will solve anything. The crisis on Wall Street is exactly because nobody knows what these toxic financial products are worth, and people therefore refuse to buy them or trust others who have them. That’s why it’s impossible to say how much this bailout will really cost, or whether it will work.

I’m not stridently opposed to ANY bailout–just THIS one. I’m deeply troubled by the complete lack of accountability, the inability of taxpayers to potentially profit from this move, and by the concentration of too much power in the hands of the Treasury Secretary.

One Trillion Dollars. That’s how much the government’s plan to fix the financial crisis is going to cost.

One Trillion Dollars. An unimaginably large sum of money very roughly equivalent to the real cost of the Iraq war. One that is not news, as I said recently. I’m glad the government is being up front about the cost, but it doesn’t have a choice. Actually I think $1 trillion is understating the case, as I think that’s the cost for Fannie and Freddie alone.

Here’s what we could have bought for One Trillion Dollars (and could have bought twice, if you include the Iraq War):

–Doubling of cancer research funding, treatment for every American with heart disease or diabetes, and a global immunization campaign for children–combined, for two decades.

–Giving every man, woman and child in America $3400, or sending $150 to every single person on the planet.

–Five years’ worth of investment towards complete energy independence, along with associated new job creation and other benefits.

–Taking huge steps towards solving the impending insolvency of social security.

–Funding two hundred aircraft super-carriers for the US Navy.

–Securing loose nukes and fissile materials, and securing our ports, so as to prevent terrorists from ever exploding a nuclear weapon in an American city (cost: merely $315 billion over 10 years.)

–Funding the equivalent of 170 National Science Foundations and 200 National Cancer Institutes for one year. Alternatively, funding 28 Departments of Homeland Security and all the work they do securing the nation, for a year.

–Benedictine nun Joan Chittister’s view:

“you could buy a $100,000 house for every family in Kansas, Missouri, Nebraska, Oklahoma and Iowa and you could put a $10,000 car in the garage of every one of those homes. Then there would be enough money left to build 250 $10 million libraries and 250 $10 million hospitals for every city in those states. And after that, there would still be enough money left over to put in the bank and, from the interest alone, pay 10,000 nurses and 10,000 teachers and still give a $5,000 bonus to ever family in those five states. That’s what one trillion dollars will buy in this country today.”

One Trillion Dollars: the price for a failed conservative Republican ideology that pushed the phony ideas that markets are 100% efficient, that they function best completely unfettered by regulation, that government was nothing but a hindrance. Scads of laws, rules and regulations have been modified or repealed in pursuit of this ideology over the last decade.

I’ve never been a fan of excessive regulation, preferring the market to usually sort things out for itself. But in cases where failing to tell the truth, failing to disclose all facts, or failing to do something materially harms the consumer’s health or pocketbook then the government has a duty to step in and enforce truth and honest dealing. The market, left unfettered in these situations, will simply reward selfishness and people lying to one another.

This entire debacle happened in the absence of sensible regulation because of a failure of all parties to tell the truth. Everyone lied: banks lied to customers about their creditworthiness; customers lied to banks about their income and ability to support payments; banks lied to mortgage-buying financial institutions about the quality of what they were selling; financial institutions lied to the SEC and to investors by hiding financial toxic waste through accounting chicanery that allowed them to both mislead and operate their businesses with grossly undercapitalized debt.

One Trillion Dollars is the price the rest of us will now pay for all this lying, enabled by by the rabid and irrational deconstruction of common-sense “tell the truth” regulation pushed primarily by Republicans and George Bush.

One Trillion Dollars that will never be used to capitalize growth, or create new industries, or finance research for medical cures–those benefits will now be left to other countries.

One trillion dollars (and another trillion for Iraq): the price of Empire run amok. The bill is coming due.

Think about that, and about who is responsible, before voting in November.