The Bailout Is An Outrage
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| Sat, 09-20-2008 - 1:36pm |
This trillion dollar plus bailout of the people who not only created the economic meltdown, but profited from it, is a travesty. All of our tax money will be used to ensure that the gamblers and speculators in our economy will feel no pain. With this economic legislation the underlying assumption is and has always been that what is good for the owners of mega-business is always good for the rest of us. Americans need to seriously consider this bailout. Do we really want to commit all of our treasure to a bailout of the speculators? The follow-up question to that is, if we commit a trillion dollars to rescue the speculators of our aristocratic class, will there be any money left to invest in public works programs or New Deal style job creation programs? Shifting all this public money away from the middle class - the class that actually fuels the economy the most- and into the hands of the wealthy is another major experiment in trickle down futility. Make no mistake, this bailout is a momentous decision that will have a huge impact on our lives. Consider it carefully. I'm not saying there is really anything we can do about it because our political class will ram this rotten bailout through, but it's useful to remember these moments so you can measure their consequences later and know exactly what ideology enabled them and who the proponents of that ideology are.
Greenwald has some excellent commentary on these events:
David Herszenhorn,New York Times, today, "Congressional Leaders Stunned by Warnings":
It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.
"When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.
As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program "Good Morning America," the congressional leaders were told "that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally."
Mr. Schumer added, "History was sort of hanging over it, like this was a moment."
When Mr. Schumer described the meeting as "somber," Mr. Dodd cut in. "Somber doesn't begin to justify the words," he said. "We have never heard language like this."
"What you heard last evening," he added, "is one of those rare moments, certainly rare in my experience here, is Democrats and Republicans deciding we need to work together quickly."
Leave aside for the moment whether this gargantuan nationalization/bailout is "necessary" in some utilitarian sense. One doesn't have to be an economics expert in order for several facts to be crystal clear:
First, the fact that Democrats are on board with this scheme means absolutely nothing. When it comes to things the Bush administration wants, Congressional Democrats don't say "no" to anything. They say "yes" to everything. That's what they're for.
They say "yes" regardless of whether they understand what they're endorsing. They say "yes" regardless of whether they've been told even the most basic facts about what they're being told to endorse. They say "yes" anytime doing so is politically less risky than saying "no," which is essentially always and is certainly the case here. They say "yes" whenever the political establishment -- meaning establishment media outlets and the corporate class that funds them -- wants them to say "yes," which is the case here. And they say "yes" with particular speed and eagerness when told to do so by the Serious Trans-Partisan Republican Experts like Hank Paulson and Ben Bernake (or Mike McConnell and Robert Gates and, before them, Donald Rumsfeld and Colin Powell).
So nothing could be less reassuring or more meaningless than the fact that the Democratic leadership has announced that what they heard scared them so much that they are certain all of this is necessary -- whatever "all this" might be. It may be "necessary" or may not be, but the fact that Congressional Democrats are saying this is irrelevant, since they would not have done anything else -- they're incapable of doing anything else -- other than giving their stamp of approval when they're told to.
Second, whatever else is true, the events of the last week are the most momentous events of the Bush era in terms of defining what kind of country we are and how we function -- and before this week, the last eight years have been quite momentous, so that is saying a lot. Again, regardless of whether this nationalization/bailout scheme is "necessary" or makes utilitarian sense, it is a crime of the highest order -- not a "crime" in the legal sense but in a more meaningful sense.
What is more intrinsically corrupt than allowing people to engage in high-reward/no-risk capitalism -- where they reaped tens of millions of dollars and more every year while their reckless gambles were paying off only to then have the Government shift their losses to the citizenry at large once their schemes collapsed? We've retroactively created a win-only system where the wealthiest corporations and their shareholders are free to gamble for as long as they win and then force others who have no upside to pay for their losses. Watching Wall St. erupt with an orgy of celebration on Friday after it became clear the Government (i.e., you) would pay for their disaster was literally nauseating, as the very people who wreaked this havoc are now being rewarded.
More amazingly, they're free to walk away without having to disgorge their gains; at worst, they're just "forced" to walk away without any further stake in the gamble. How can these bailouts not at least be categorically conditioned on the disgorgement of ill-gotten gains from those who are responsible? The mere fact that shareholders might lose their stake doesn't resolve that concern; why should those who so fantastically profited from these schemes they couldn't support walk away with their gains? This is "redistribution of wealth" and "government takeover of industry" on the grandest scale imaginable -- the buzzphrases that have been thrown around for decades to represent all that is evil and bad in the world. That's all this is; it's not an "investment" by the Government in any real sense but just a magical transfer of losses away from those who are responsible for these losses to those who aren't.
And all of this was both foreseeable as well as foreseen -- see the 2002 grave warnings from Warren Buffett on pages 14-15 of his shareholders letter (.pdf), among many other things -- and it's also happened before, when the Federal Government bailed out the S&L industry that (with John McCain's help) was able to gamble recklessly and then force the country to protect them from their losses. The people who did this have no fear of anything -- they lack the kind of healthy fear that impede reckless behavior -- because they know how our Government works and that they control it and thus believe that their capacity to suffer is limited in the extreme. And they're right about that.
What's most vital to underscore is that the beneficiaries of these extraordinary Government schemes aren't just the coincidental recipients of largesse out of some incredible good luck. The people on whose behalf these schemes are being implemented -- the true beneficiaries -- are the very same people who have been running and owning our Government -- both parties -- for decades, which is why they have been able to do what they've been doing without interference. They were able to gamble without limit because they control the Government, and now they're having others bear the brunt of their collapse for the same reason -- because the Government is largely run for their benefit.
If there is any "pitchfork moment" -- an episode that understandably would send people into the streets in mass outrage -- it would be this, or at least should be. Nobody really even seems to know how much of these losses "the Government" -- meaning working people who had no part in the profits from these transactions -- is undertaking virtually overnight but it's at least a trillion dollars, an amount so vast it's hard to comprehend, let alone analyze in terms of consequences. The transactions are way too complex even for the most sophisticated financial analysts to understand, let alone value. Whatever else is true, generations of Americans are almost certainly going to be severely burdened in untold ways by the events of the last week -- ones that have been carried out largely without any debate and mostly in secret.
Third, what's probably most amazing of all is the contrast between how gargantuan all of this is and the complete absence of debate or disagreement over what's taking place. It's not just that, as usual, Democrats and Republicans are embracing the same core premises ("this is regrettable but necessary"). It's that there's almost no real discussion of what happened, who is responsible, and what the consequences are. It's basically as though the elite class is getting together and discussing this all in whispers, coordinating their views, and releasing just enough information to keep the stupid masses content and calm.
Can anyone point to any discussion of what the implications are for having the Federal Government seize control of the largest and most powerful insurance company in the country, as well as virtually the entire mortgage industry and other key swaths of financial services? Haven't we heard all these years that national health care was an extremely risky and dangerous undertaking because of what happens when the Federal Government gets too involved in an industry? What happened in the last month dwarfs all of that by magnitudes.
The Treasury Secretary is dictating to these companies how they should be run and who should run them. The Federal Government now controls what were -- up until last month -- vast private assets. These are extreme -- truly radical -- changes to how our society functions. Does anyone have any disagreement with any of it or is anyone alarmed by what the consequences are -- not the economic consequences but the consequences of so radically changing how things function so fundamentally and so quickly?
Other countries are debating it. The headline in the largest Brazilian newspaper this week was: "Capitalist Socialism??" and articles all week have questioned -- with alarm -- whether what the U.S. Government did has just radically and permanently altered the world economic system and ushered in some perverse form of "socialism" where industries are nationalized and massive debt imposed on workers in order to protect the wealthiest. If Latin America is shocked at the degree of nationalization and government-mandate transfer of wealth, that is a pretty compelling reflection of how extreme -- unprecedented -- it all is.
But there's virtually no discussion of that in America's dominant media outlets. All one hears is that everything that is happening is necessary to save us all from economic doom. And what's most amazing about that is that the Natural, Unchallenged Consensus That Nobody Questions can shift drastically in a matter of days and still nobody questions anything. This is what Atrios observed as I was writing this post:It's fascinating to watch how easily consensus is manufactured. A few days ago elite opinion seemed to be cheering Paulson's "no bailout" line, and now they're cheering a trillion bucks thrown down the crapper. All the Very Serious People will spend their days coming up with their pony plans, oblivious to the fact that the pony plan is not an option. The Bush administration's plan is the option.The way it works is that Bush officials decree how things will be, and then everyone -- from Congressional Democrats to the Serious Pundits -- jump uncritically and obediently on board, even if they were on board with the complete opposite approach just days earlier, and then all real dissent vanishes. That's how the country in general works. As Atrios says: "We've seen this game played before."
I don't pretend to know anywhere near enough -- in terms of either raw information or expertise -- in order to opine on the Latest Plan. But what I do know is that an injustice so grave and extreme that it defies words is taking place; that the greatest beneficiaries are those who are most culpable; and that the same hopelessly broken and deeply rotted institutions and elite class that gave rise to all of this are the very ones that are -- yet again -- being blindly entrusted to solve this. http://www.salon.com/opinion/greenwald/2008/09/20/bailout/index.html
Edited 9/20/2008 2:55 pm ET by glitter_girl_5000

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" "next to nothing," "
Next to nothing as negligable to overall government revenue and negative when you consider government payout.
Oversight is easily doable, and is already being discussed. The hurry is actually having an economy, and not 100 million people out of work.
How does one know an idea is lousy if they can't offer an alternate solution?
The reason Friday might be ok is if markets *know* it will be Friday - someone had to suggest 'we are working on it.' If there is a strong
Full length fiction: worlds undone
"You have no power over my body..." ~ Anne Hutchinson
Doc, it looks like you will have one less sensible voice here.
Money for rich people who have mismanaged money is called a bailout. Good.
Subpoenas issued to average people are accepted or these folks go to jail.
Subpoenas issued to politicians or the high and might folk are just ignored and nothing happens to them.
The main reason I am voting Democrat this election year is because I am tired of two sets of rules for Americans. I hard-working, law-abiding citizen. I am tired of Republicans ignoring the laws they do not like and making things up as they go.
9-11 happened on their watch. The collapse of our economy came because of their deregulatory policies. I totally blame Reagonomics, Bush, and McCain for this whole mess.
I hope that I can convince you not to leave. Now that I know that this board is part of NBC I understand much better what is going on here. There doesn't seem to be very many of the rational Democrats that I meet in my every day life. Only the extreme hysterical kind. This has thrown me for a loop a bit, because where I live there are far more rational Democrats than the other kind. I have been wondering if a couple of people are actually the same person using a couple of names, because the writer's voice seems the same. (I have also wondered if crazy Keith Oberman himself posts here, lol)
Anyway, judging from the sheer numbers of the loud left, we need as many rational voices as possible. If a non-extremist lurker visits the board, they will probably be inclined to understand the side that actually posts rational arguments, that have not come from ridiculous left wing extremist bloggers.
"Sorry, but you're wrong.
Quite easily.
Most people are not economists, nor do they spend their days doing nothing but digesting and analyzing political and economic history. But most people can remember what a recession feels like - or a financial crisis - and they can remember things to avoid doing. Most people can also sense when an idea isn't a good one. That's not to say there mightn't be WORSE ideas out there, or that doing nothing mightn't be a bad idea all on its own....but it is untrue to the point of intentional obliviousness to suggest that just because someone doesn't have a ready-made solution of their own in their back pocket - one which anyone, at quick glance, can tell is better than the current suggestion - that they shouldn't even be THINKING of criticizing the idea that IS being offered....no matter how wrong or harmful it seems to them. Saying that one shouldn't speak up in criticism of an idea if one isn't in possession of an obviously-better idea before doing so is merely a not-very-sophisticated way of shutting people up. As usual, Digby hits the nail squarely on the head regarding why it is a monumentally, epically stupid idea to let "we need to do something NOW" turn, in practice, into "we don't have time NOT to do what the Bush administration is asking for":
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness is in fact held to be enhanced in proportion as truth decreases and illusion increases, so that the highest degree of illusion comes to be the highest degree of sacredness.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness
Oy.
Anyway, good luck!
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness is in fact held to be enhanced in proportion as truth decreases and illusion increases, so that the highest degree of illusion comes to be the highest degree of sacredness.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness
But because the Bush DoJ and administration have literally encouraged this sort of behavior from everyone from Karl Rove to Harriet Miers to Josh Bolten, others are now following suit. If conservatives wondered, during the Clinton years, whether the President's word-parsing definition of oral sex not really being "sex" officially meant that others would look to - and follow - that example, on the theory that if the President himself defines it thusly (or at least feels comfortable using it as an excuse), why wouldn't others think "hey, if it's good enough for him, why not me" - I wonder what those same conservatives think now about the ignoring of legally-issued subpoenas, of ignoring rules one doesn't agree with (through the use of "signing statements"), etc?
I expect crashing silence on this issue, of course - though we certainly heard no END of it when it was Clinton's penis which was under discussion - but I'm no longer surprised by such open hypocrisy on the right.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness is in fact held to be enhanced in proportion as truth decreases and illusion increases, so that the highest degree of illusion comes to be the highest degree of sacredness.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness
Would you believe that those sentiments are literally EXACTLY what many of the liberals and Democrats on this site feel with regard to the conservatives we meet here?: Braying, whining, bullying conservatives who think that fifteen years of Rush Limbaugh telling them that liberals are "kooks" or "liberalism is a mental disorder" (from Michael Savage) entitles them to treat those liberals in a manner which they would themselves recoil from and complain loudly about, were they subjected to it themselves?
Probably, you wouldn't believe that, nevertheless, I assure you that it is true. I have no relationship with anyone else who posts here off-board - with one exception, which pre-dates my even being part of this board - and I suspect the same is true of most of the rest of the people who post here, liberal, conservative or in-between: we are people who found our way to a web site through luck, happenstance and a desire to discuss politics. That's perhaps the only thing which is a common thread: an above-average interest in things political (and willingness to discuss them). But have you noticed something in general about the Internet? That many - MANY - people feel liberated and empowered to act and speak in ways they'd never dream of in the course of their real life. Many of the things said here - by various people, regardless of political orientation - are things which almost certainly would never be said around the water cooler at work, or at the local tennis court or gym, or in the coffee room after service at church or in fact anywhere else. Why? Because we've been inculcated to believe that politics is often a messy, contentious thing which isn't really fit for "polite company." Too many different viewpoints out there; too easy to offend or upset or alienate someone without really meaning to, or even without realizing it.
And when we're face to face with others - all of us - we understand what's TRULY involved in looking them in the eye and telling them they're hateful, wrongheaded, America-loathing people. Most of us would be unable to look someone in the eye and tell them what we blithely type out here on a regular basis; many of us wouldn't even be able to THINK it....because, standing in front of someone, you're unable to deny that they're much more than the sum of their political opinions; they're also people with plenty of other qualities which have nothing whatsoever to do with politics, some good, some not as good. But the idea of flat-out calling someone a traitor or an idiot (as is routinely done here), when you're standing in front of them, seems not only much more difficult, not only potentially hazardous, but also just WRONG, because we can see other parts of these people, and we know instinctively, unless we are single-minded zealots, that disagreement with a political position or even worldview doesn't - by itself - automatically render the person with whom we disagree into someone worthy of being told, straight-up, that they're stupid or a traitor.
Yet I cannot even remember how many times I've been called that - and worse - by people here who see nothing wrong with referring to someone else as "hysterical" or "irrational," as if they're merely using a benign descriptive adjective like "warm" or "heavy" or "chartreuse." I tried, for longer than was probably good for my own equilibrium, to get people to behave more like they would in real life (and, equally if not more importantly, to NOT behave as they would NOT in real life). But when nothing - at all - really changed, when some of the people I was debating with here repeatedly refused to acknowledge or even openly mocked the notion that there was anything whatsoever wrong with referring to others with a blanket "hysterical" or (usually) worse, and refused to grant to others the respect they were sure to demand for themselves, I realized that those who do not OFFER respect do not DESERVE any of mine....and that the deep interest in how politics shapes our lives which drew me to this board in the first place was sufficiently strong that I would not allow my (considerable) distaste for the deplorable way many here treat others (as opposed to the way I'm sure most of us operate in our daily lives) to lead me to conclude that the lowest-impact way of solving this problem was merely by shrugging and walking away.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness is in fact held to be enhanced in proportion as truth decreases and illusion increases, so that the highest degree of illusion comes to be the highest degree of sacredness.
But for the present age, which prefers the sign to the thing signified, the copy to the original, representation to reality, appearance to essence.....truth is considered profane, and only illusion sacred. Sacredness
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