View From Table 9

October 26, 2008

Bait and Switch

One of the things I’ve been doing over the past couple of weeks was talking with others about this whole bailout. Talking with the young man driving the hotel shuttle in Charlottesville VA. Talking with my seat mate on a train. Talking with waiters and campaign workers and colleagues and telephone customer service folks and friends and my doctor and the grocery store clerk. My principal question: What the heck are they going to use our $700 billion for and how will that fix the mess we’re in?

The answers I got:

Somehow pay off people’s mortgages so they can keep their houses (no one was really clear on how this would work or who would benefit)

Buy the mortgage loans and keep collecting them

Buy the foreclosed houses from the market

Let people refinance their bad loans through the Government

Give banks money they can lend out to people and businesses

Not one person could describe how any of that above would fix the economy, and nobody was really sure of any of what they said above. Almost universally, the answers started with “I don’t really know, but I think…” We’re talking about $700 Billion (or, in other terms, 75% of the gross national product of Mexico) of our tax dollars, and we couldn’t say how this would work to help us get out of this Second Great Depression. Do you smell a rat too?

Guess what? None of us were right. We’re now starting to see how this great Bailout (which our children and grandchildren and great grandchildren) will save us:

Banks will use the money to buy other banks whom the Treasury believes are ‘weaker’, using Bailout dollars and getting special tax breaks (meaning paying less in taxes) on top of that. Stronger banks will get stronger, and weaker banks will get absorbed, and all at our Federal Government’s behest and direction.

Who says Republicans can’t be Socialists? (Not to mention hypocrites – progressive tax plans are Socialist but direct ownership and control of our banking system is not. Amazing.)

Now, notice, there’s not a word in there that talks about loans – in fact, what’s coming out that despite telling Congress that they’re insisting that banks use the money to make loans, they’re essentially asking really really nicely with sugar on top and hoping that this is what banks will do. These same banks who lied about so much, who cheated and stole, are being asked rather than told what to do with our taxpayer dollars that they insisted they needed to fix things, and then turning around and enriching themselves even further at our now very direct and very equally distributed expense. In other words, they’re still lying, cheating, greedy bastards. Heck, there’s even more of them begging for our money so they can remain, well, rich. White Collar Gangsters on Welfare.

I say we repeal that law that gives Treasury the $700 Billion, recoup the money given out already, and have Really Smart People who don’t have an interest in their post-election private sector big money jobs develop a bailout that really works

Something like the We Deserve it Dividend. Now, when I outlined that fabulous We Deserve it Dividend program (which can be accomplished for a fraction of the Fatcat Bailout), there was also not one person who could not describe exactly how they would use their dividend, and relate how that would help solve the economic conditions for which the ‘bailout’ was designed. People would pay off their mortgages, pay off their cars, buy a new car, invest, put the money in the bank, save for kids’ college, do home improvements, buy a condo or house (if they didn’t own one) and near the very bottom of the list they would take a small vacation. All of these things would fix problems – of debt, infusing capital, distributing wealth, helping businesses survive. What a great idea! Much better than the “We-have-no-idea-how-this-works-bailout”, don’t you think?

Or, and maybe alongside the Dividend, something like Paul Krugman’s idea of taking those dollars (he didn’t say these specifically) and getting people to work fixing our crumbling bridges and roads, infusing dollars into our National Parks and schools and public transportation and developing new industries so we don’t make money only lending to each other so we can buy big screen TVs. Something not totally unlike FDR’s WPA and Civilian Conservation Corps. Both programs worked – giving people jobs, building infrastructure we still use today (many of our National Park buildings were CCC projects). Many regard the programs as lifesavers and sources of great hopes during our First Great Depression.

What is it they say? Those who don’t remember history are condemned to repeat it? Yep. I’d rather say “Fool me once, shame on you. Fool me twice, shame on me.”

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1 Comment »

  1. Thank you very much for your post. Absolutely excellent information and very useful for me. Great done and keep posted. Looking forward to reading more from you.

    Comment by Edwin — November 22, 2008 @ 2:10 pm | Reply


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