People with much money have no trouble demanding lots more
To bail or not to bail -- that should be the question
We trim, blend, and append four 2008 articles, the first three from AlterNet which accept Bush’s parting sting as a fait accompli and merely ask for strings attached and, saving the best for last, one from the Asia Times (Sept 23), thinking outside the subsidy box.
by Jeffery J. Smith, September 2008Richard W. Behan: “The $700 Billion Bailout: One More Weapon of Mass Deception”
The American economy needs help, but there are other, far more equitable ways to accomplish it.
JJS: No surprises there, just the usual wish list of tax the rich, hire the poor -- to do work that commentators would never have to do. Nevertheless, the title merits mention, it’s so catchy and true -- the economy and Wall Street are two drastically separate entities; we can do without one but not the other.
Sen. Bernie Sanders: We can't just give away $700 billion of taxpayer money to the banks. Unless … have government buy bad mortgages but not at the bankers’ list price, instead at what they could really re-sell for in the market.
JJS: But if lenders are willing to accept such low prices, there’s already buyers out there. The politicians need not get involved.
Robert Kuttner: The worst possible result would be for financial markets to return to "normal" -- the speculative casino of the past decade, abetted by figures like Treasury Secretary Paulson, ex-CEO of Goldman Sachs.
Insurance against bad debt, underwritten by companies such as A.I.G, totals about $42 trillion dollars alone. That's trillion.
Why use public money to bail out the wizards of Wall Street who caused the damage, but not the ordinary Americans who suffered it?
JJS: Those “wizards” were not fools; they knew precisely what they were doing and fully expected to be able to railroad the politicians into bailing them out. And let’s face it: ordinary Americans are just as much speculators in real estate as the rogue rich. There’s no difference in intent or moral outlook, only in means and manner of gambling.
Otto Spengler: Let's Stop the Greatest Theft in the History of Humankind
Part of the problem is that Wall Street, like the ethnic godfather in the old joke, has made America an offer it can't understand. The collapsing of the mortgage-backed securities market embodies great complexity. But that is a lesser, superficial side of the story.
If we no longer expect anyone to pay their debts, why have socialism for the rich rather than the poor? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who garner $5 million a year? We can't let them get away with it.
Some are asking for oversight, but it is hard to imagine how Congress might use it. Professionals with years of experience set prices on these securities with great uncertainty. How would an overseer determine if the Treasury (whose current Secretary comes from Goldman Sachs) had set the correct price? And if the Treasury decided to bail out one bank (say, Goldman Sachs) rather than another, how would the overseer judge whether that decision was judicious, politically motivated, venal, or arbitrary?
There is no reason to expect the bailout of bank shareholders to have any effect at all on American home prices, which will continue to slide.
Why not let other banks join the unlamented Brothers Lehman in bankruptcy court, and start a new bank with taxpayers' money? Even better, why not let the Chinese, or the Saudis or other foreign investors take control of failed American banks? They've got the money, and they gladly would pay a premium for an inside seat at the American table.
Will Americans fall on their fountain-pens for their bankers? Probably they will tax themselves to keep the casino in operation, but it will not profit them. Where, oh where, is America's Vladimir Putin, who will drive out the oligarchs who have stolen the country's treasure and debased its currency?
JJS: That’s for authoritarian society. America is supposed to be a democracy. For the bankers to be stopped in their tracks, and for the economy to be restructured fairly, to work right for everyone, then citizens have to counterbalance multi-million dollar campaign contributions and, by signing a petition at any number of websites, browbeat their elected representatives in Congress to do the right thing.
Jeffery J. Smith runs the Forum on Geonomics.
Lose a home, suffer; lose billions, get a bailout
Let’s hope their cure is not worse than the disease
Bailing out the top does little for the bottom
Email this article Sign up for free Progress Report updates via email
What are your views? Share your opinions with The Progress Report:
Page One Page Two Archive Discussion Room Letters What's Geoism?