Bailout Blues

Top ten reasons why the Wall Street bailout doesn't smell right:

10. George W. Bush is a lame duck president who will be leaving office in less than 3 months. Why would a Democratic Congress authorize W's Treasury Secretary to spend $700 billion as he is going out the door with no real strings attached (forget the oversight board talked about in the media--the bill that Congress considered on Monday had a sham of an oversight board with no real enforcement authority)? This is the equivalent of giving a kid the keys to the candy store.
9. George W. Bush and his Administration are proven liars. They have lied about the presence of weapons of mass destruction in Iraq, they have lied about the Justice Department firings of state attorney's, they have lied about their involvement in the "outing" of former CIA agent Valerie Plame, they have lied about domestic spying, and they have lied about using torture at Guantanamo Bay and elsewhere. Why should the Democrats or the country trust them now?
8. The Wall Street Bailout does not address the source of the problem. People unable to meet their mortgage terms have caused unprecedented numbers of foreclosures which have in turn caused banks that extended the loans and companies that trafficked in mortgage-backed securities and related products to go belly-up or experience severe financial strain. If mortgage foreclosures are the source of the problem, then why isn't the bailout structured to stop the hemmoraging at its source by helping people to restructure the terms of their mortgages?
7. The Wall Street Bailout would leave the next President of the United States with little to no financial wiggle room. The next President would be without the resources needed to implement important new investments such as universal healthcare or a broad-based energy plan designed to wean the country off of its dependence on foreign oil.
6. The Wall Street Bailout continues to use the failed trickle-down economic approach. Under this philosophy, wealthy people and corporations get the most support from government under the theory that their wealth will trickle down to the average-earning people on Mainstreet. This approach, the same one that undergirded the Bush tax cuts, has been a proven failure. Instead of trickling down, the money has gushed to the top and stayed at the top. Average people are losing jobs, unable to pay their bills and the gap between the super-wealthy and the middle class has gotten larger.
5. Free market Republicans who have historically poo poohed the need for government have turned into born-again Democrats. You know that something is wrong when Wall Street titans and Bush Administration officials agree that there is a good role for government: providing taxpayer subsidies to companies (otherwise known as Welfare for Wall Street). Some Republicans are even calling for the need to better regulate the market--after more than 20 years of fighting against such regulations (thereby contributing to the current crisis)!
4. The Bush Administration does not have a track record of good fiscal management. The unprecedented amount of Waste, Fraud and Abuse that has characterized the Bush Administration's handling of the public's tax dollars does not bode well for how the bailout money will be spent. The level of cronyism (giving federal money to its friends) shown by this Administration has been unprecedented in scale and scope. There have been billions of dollars unaccounted for in Iraq. Many of these dollars have been spent on well-connected defense industry contractors who have taken the money without completing work or performing satisfactory work. Additionally, why is noone taking notice that the federal government is in the same predicament as many of the bailout banks teetering on the brink of destruction? The nation is trillions of dollars in debt and is promising to print more paper money to float the bailout. If the foreign countries whom the U.S. owes decide to quit financing our nation's excesses, our nation will essentially be facing insolvency. Simply put, we can't afford $700 billion.
3. By essentially leading the charge on the need for the bailout (Bush's version with light modifications), the Democratic Congress is placing itself in a position to be punished by angry voters in November. Why would the Democratic Congress--an entity that should have all of the leverage in negotiations (given Bush's lame duck status and the Republican's minority status)--take the lead in promoting and defending a bailout plan that largely favors Wall Street over Mainstreet? One reason why this Democratic Congress has such low approval ratings may be that the average person feels that it has failed to leverage its position of power to benefit the people who gave them the majority in 2006.
2. The Bush Administration has resorted to staging a public stickup to get what it wants. Instead of a gun, Bush has used the media, the stock market and timing (it waited until the last minute to admit the seriousness of our economic troubles) to pressure a nervous Congress into getting what it wants--$700 billion of your tax dollars for its Wall Street friends. Many experts and even Administration and Congressional leaders have stated that they are not certain that the bailout as currently structured will stop the economic losses. Despite calls to take the time to develop a rational and workable plan, the Congress has gone along with the Administration's stickup timeline by holding votes within days of the ill-concieved bailout package being presented.
1. The Wall Street Bailout is a massive transfer of wealth from taxpayers with modest means to corporations and people with vast resources. The money used for the Wall Street Bailout is money that you pay the U.S. treasury every April during tax season. This is your hard earned money and instead of redirecting it to help you, it is being directed to help those who earn profits and bonuses on a scale unimaginable by most working families. Welfare for the wealthy, indeed. But it is at your expense. Instead of stealing from working families, why not ask corporate tycoons to help make their companies financially secure by returning their excessive bonuses and paychecks from the last 5 years? And, for those who believe that the Wall Street Bailout package has enforceable provisions to curb the salaries of corporate CEO's, well I have some swamp land in Florida that I would like to sell to you.

I know that people's pensions, savings, credit lines, etc. are on the line and that measures are needed to stabilize the economy. This post is designed to point out that there are good reasons to be very careful in terms of how we craft the stabilization measures as the results are likely to stay with the country for a long time. Despite the reluctance of the public, the media, Wall Street and the Administration are trying to convince the public that we need to strike a bailout deal (their bailout deal) immediately. There are good reasons to be suspicious of the high-pressure tactics being utilized and the content of the currently proposed bailout deal.