In Bush's world, we are puppets to be manipulated. Photo of vintage French handmade puppets from James Jaulin's stand at Chatou, France, March, 2008. The next brocante at Chatou begins Friday.
Congress is considering a one-sided deal to give George Bush a blank check — offering over a trillion taxpayer dollars to Wall Street to cover its bad debts. That works out to somewhere between $2000 and $5000 from every American family. So what do we taxpayers get in return? Nothing. No new regulation or oversight to help avoid a similar crisis in the future. Further, taxpayers get no share in the profits if and when these financial titans bounce back - even though we are now assuming a great deal of the risk.
This is worse than a bad deal; it's a blank check for some of the richest companies in the world. Because on Sunday, Treasury Secretary Henry Paulson told ABC News that foreign banks will be able to unload bad financial assets under a $700 billion U.S. proposal aimed at restoring order during a devastating financial crisis. "Yes, and they should. Because ... if a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution," Paulson said.
Presumably that would include John McCain's good buddy Phil Gramm's Swiss employer UBS. You remember Gramm, McCain's chief economic adviser, who said the economy was fine and we are "a nation of whiners?" The same Phil Gramm who opposed regulating Wall Street's financial institutions? Yet McCain's own spokesman Tucker Bounds (whose delusion seems to know no bounds) has trouble denying Gramm would be McCain's choice for treasury secretary, if elected. (McCain's chief of staff and campaign manager Rick Davis was paid $2 million by Fannie and Freddie Mac for access to McCain and to stop regulation of the banking industry).
UBS already has written-down roughly $38 billion in losses. Phil Gramm tried lobbying the US government for a bailout on behalf of UBS. So Paulson's announcement that foreign banks will be included in the bailout certainly raises questions about influence-peddling. The lobbyists will be out in full force, seeking to curry favour for their clients beset with financial woes. Wonder who will be left to staff the McCain campaign?
Congress does not have to agree to a one-sided bailout. Instead, it can choose to impose a few sensible conditions to ensure that the bailout will be used responsibly. Here are a few suggestions, courtesy of former Labor Secretary Robert Reich:
1. If the taxpayers are shouldering the risk, the taxpayers should reap any eventual benefits. We accomplish this by giving the government an equity stake in every company we bail out proportionate to the amount we give them.
2. If we're paying (more than) our fair share, the CEOs and executives should have to, too. All the fat cats who got us into this mess should relinquish their stock options and salaries until they start showing us, their investors, that they can once again be profitable. Future salaries should be linked to profitability.
3. No more campaign contributions from Wall Street executives and PACs. Taxpayer dollars should be used to get our nation out of a crisis. They cannot be used to fund giant, powerful lobby operations that will be used to strong arm Congress into making bad policy.
4. Better regulations start right now. Wall Street can't expect to take thousands of dollars out of your paycheck without agreeing to increased transparency and more stringent oversight — the kind that might have helped avoid this mess to begin with.
5. Bankruptcy judges get broader leeway to help homeowners. Why should we lose our homes so the CEOs can keep theirs?
If Wall Street doesn't like these conditions, it should find private investors to finance this debacle. If the American people are going to take the hit, then we must have a say in terms of the deal — even if we don't have an army of high-paid lobbyists at our disposal like John McCain.
Congress must take swift and prudent action to avoid making the crisis worse. We can help by making our voices heard to House Speaker Nancy Pelosi, House Majority Leader Steny Hoyer, Senate Majority Leader Harry Reid, House Finance Chair Barney Frank, Senate Banking Chair Chris Dodd and the de facto party leaders: Senators Barack Obama and John McCain.
And from the Buffalo News: "Voters, meanwhile, must pay attention to this issue as the election approaches. Barack Obama supports greater Fed oversight, though he hasn’t offered many details of this approach. McCain’s views, meanwhile, remain no better than muddy and often contradictory. One day he says the fundamentals of the economy are sound, while they next he says they are troubled. On another day he opposes a bailout for AIG, while the very next, he says a bailout was unavoidable. Before this campaign, he waved the conservative flag of deregulation; now, he says lack of regulation helped bring about the current fiscal crisis."