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This Is What Democracy Looks Like
www.NationalView.org's Note From a Madman
September 30, 2008
What to do?
Democratic Michigan Governor Jennifer Granholm is playing the part of Governor Sarah Palin of Alaska as Senator Joe Biden prepares for this Thursday's debate. Granholm graduated from UC-Berkeley in 1984 Phi Beta Kappa and holds two BA degrees (Political Science and French) She then graduated from Harvard Law School with honors. If it weren't for the fact that she was born in Canada, Granholm (a former winner of the Miss San Carlos, California beauty pageant) might very well have been an opponent of Senator Obama in the Democratic primary herself. Knowing that, I just have one question for the Obama-Biden campaign:
Where did you put the other half of Governor Granholm 's brain and make sure you give it back to her.
A Third World Nation
Quick: What would you think of a nation who's economic system is in shambles; ignores their citizens after a natural disaster; only provides health care to those who can afford it; and with major population centers tied up with long gas lines and little fuel to fill the tanks; Would you call it a Third World nation?
Or would you call it The United States of America?
With our nation's top one percent in control more than twenty percent of its economic resources, creating an almost feudal-like system; and with the disappearance of the middle class in favor of those at the top, can we describe our nation as a First World - Western Power leader anymore?
We are in a position seen mostly by Third World nations with leaders who care more about their own bottom line than those they represent. And that philosophy starts at the top.
We've been told over and over again that huge tax breaks, given as a great percentage to the very wealthy, will put our nation on the track to prosperity. And even though we were apparently on that road some eight years ago, the new government which came in 2001, led by George W. Bush, Dick Cheney and a Republican-controlled Congress (the Senate was soon to follow), they insisted we change things.
Today when we desperately need someone to take control - to take a leadership role - we have partisan bickering. I blame the Republicans, and here is why:
First, the President took the lead role in removing any and all regulations which governed the banking and financial industries. They wrote these laws and gave those who were able to take advantage of the economy a free hand in satisfying their greed needs.
Second, the Bush administration, with the support of his GOP-led Congress, pushed through those tax breaks mentioned above and targeted them toward the very rich, or the Bush "base of haves and have mores". By doing this they took a budget surplus of nearly $300 billion and created a budget deficit which stands in the trillions of dollars.
Third, they kept their blinders on. As our nation bled jobs through President Bush's first four years (the first time our nation had a net job loss for an administration's first term since the Great Depression) the administration did nothing. Instead of trying to keep jobs in America, they were complicit in helping giant corporations take those jobs overseas. Most of us will remember the haunting words of the President's chief economic advisor Dr. N. Gregory Minkow who said, "Outsourcing... is a good thing." It wasn't.
Fourth, as the housing market was creating its bubble, instead of insisting restraint and warning of its eminent burst, the Bush administration, along with John McCain, pointed to it as proof that the economy was growing. Even though all other indicators showed the kind of stress which can cause financial collapse, the Bushies and McCain-ites stood the course and insisted all was well and getting even better.
Fifth, the $125 billion per year spent on the Iraq war. Thee are so many more things we could be doing with that kind of money: Job creation through public works programs and health care for those without are just two obvious ideas which would have contributed to the economic health of our nation.
Lastly (but only for the purposes here), as the markets were crashing, finally forcing Wall Street to suffer as we here in Main Street have suffered for the past seven years, the word came down, not only from the administration but from their would-be successor, John McCain that the economy was "fundamentally sound." Insisting there is no problem, as then-President Herbert Hoover did as he helped usher in the Great Depression and twenty-five percent unemployment rates, helped put us where we are today as well. Surely there were those in and outside of Washington who noticed what was going on. Why were they ignored? Perhaps Bush and Company were hoping the crap didn't hit the fan until after they were no longer in power.
On McCain's involvement in the financial industry bailout negotiations, I have a question: What was said in the meeting between the House Republicans and Senator McCain last Thursday? Right before the meeting, it appeared that there was a deal; and right after the meeting the del fell through.
McCain said that he went to DC to "help". Was it his intention to stop the rescue efforts, with the help of the House Republicans led by Minority Leader John Boehner only to take up the mantle of "leader" when the bill eventually passed? And why hadn't McCain met with his Senate Republicans, a group who could have stopped the bailout talks with a simple filibuster, instead? That answer certainly could be a distrust they have for their "Maverick" colleague and why the meeting was set up with the House GOP instead.
McCain put a lot on the line when he suspended his campaign and did his best Alexander Haig "I'm in charge here" impersonation. (In the hours after President Ronald Reagan's assassination attempt, Haig made that remark seemingly forgetting that he, as Secretary of State, was way down on the list of succession.)
McCain bet that his name would be atop the "I made it happen with my leadership" list. Instead, it appears that his end-play was to run interference.
In the end, McCain's "support" (as if there was any) didn't gain even one more vote towards getting the bailout bill passed. Not one Arizona Congressional member (and only four of nineteen Representatives from George Bush's home state of Texas) actually voted for the bill.
There was a bill, bipartisan with the support of the White House, ready to be out before the House and Senate until McCain showed up.
There is no bill today.
by Victoria A. Brownworth
copyright c 2008 Journal-Register Newspapers, Inc.
What’s good for Wall Street is supposed to be good for Main Street. So goes the conventional wisdom. If the market does well, ordinary Americans are also supposed to prosper because stocks will go up, dividends will be high, credit will be flowing and most Americans are represented by the stock market in one way or another--so Wall Street impacts us all.
That said, it’s difficult for most Americans–myself among them–to comprehend how the $700 billion bailout House and Senate leaders agreed upon in a rare Sunday session September 28 will be good for us here on Main Street, particularly as it is something the Bush Administration proposed.
Americans who are not wealthy have seen a radical economic downturn under the Bush Administration as compared to the Clinton Administration, which was one of the most prosperous in the 20th century. For everyone.
Both the House and Senate will likely vote on the bailout plan this week after major tweaking is done. About 60 percent of Congressional Democrats were behind the bailout, but only about 30 percent of Republicans favored the plan with House Republicans standing firmly against it until the Sunday session. Speaker of the House Nancy Pelosi had consistently demanded bipartisan response to the bill.
Neither presidential candidate supported the original plan, but both have said they would “likely” vote on a final version as long as it includes protections for those of us here on Main Street. Both Barack Obama and John McCain have been strongly advocating oversight of the agreement and assurances that taxpayers would not be stuck carrying the full weight of the bailout.
But taxpayers will indeed be stuck with the price tag for this monumental decision and what’s more, it will have a decided impact on the next president and his plans for the country.
In the September 26 presidential debate, moderator Jim Lehrer tried to get both Obama and McCain to state their opinions on the bailout and what they would cut in their administrations to pay for it, but both candidates skirted the issue, although both did voice their concerns for Main Street.
Most economists have agreed something dramatic is needed to keep an increasingly fragile economy from further damage. (Most economists not in the Bush Administration have failed to used the word “collapse” as Treasury Secretary and former Goldman Sachs CEO Henry Paulson has, however). But a majority of economists have urged restraint and careful consideration in the negotiations–something echoed repeatedly by House Financial Services Committee Chairman, Rep. Barney Frank (D-MA). Frank has been one of the key arbiters of the bailout plan and has voiced the most consistent concerns for those of us on Main Street, saying that average Americans should not be expected to pay for Wall Street’s mistakes.
It’s been a rocky few months on Wall Street. We’ve witnessed four of the major investment banking corporations in the country tank and the fifth completely restructure itself. On September 26, the country’s largest thrift bank, Washington Mutual, was sold for pennies on the dollar to J.P. Morgan Chase after it went under. Stock market volatility has been the most dramatic in 24 years and economists who believe the country is already in a recession, have cautioned that a depression might follow.
Most Philadelphians I’ve spoken to in the past few weeks have echoed what congressional leaders are hearing from their constituents, however, and are saying one thing: No bailout.
Sen. Arlen Specter (R-PA) was among the first to publicly say “Not so fast” when Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke both exerted pressure on President Bush to urge the bailout.
Yet without the infusion of cash into the market, Paulson and Bernanke argued, the stock market would continue to take terrible hits, banks would continue to founder or collapse, credit would dry up–all of which would damage the American economy in ways that would effect not just the average citizen, but America’s standing in the global marketplace.
Paulson and Bernanke are right, of course. But what they and the President have consistently failed to note as they have sounded their urgent alarms about the imperative for the bailout *right now* is that this problem has been brewing for over two years and they and the Administration have done nothing until two months ago to staunch the financial bleed.
At that time, they began the bailouts with investment corporation Bear Stearns, followed by the bailouts of mortgage giants Freddie Mac and Fannie Mae and the mega-insurance corporation, AIG. When Paulson talks about a $700 billion bailout, that is over and above the bailout of more than $400 billion already provided by the Treasury to Wall Street, with the price tag accruing to the American taxpayer. In addition, there has been a steady infusion of billions per week into the market by the Fed.
Most Americans are not fluent in economics. It’s a complex system that includes not just our own economy, but the global marketplace. Thus the $700 billion bailout will include bailing out quite a few foreign banks and investment corporations–small-print items glossed over in the negotiations because Americans have already been phoning their congresspersons with a 200 to one ratio of calls *against* the bailout.
I was one of those callers. One of my concerns in the bailout–which has not been assuaged by the Democrats bending to Bush’s will with alacrity yet again–is that foreign countries will now own a majority of American assets as defined by this plan. I also wonder why, if America is indeed a free market capitalist system, the Treasury is leading the charge toward nationalizing the banks.
If I were to choose what we were going to nationalize in America, it would be health care, not the banking system.
And yet, that is what we are doing–socializing banking, credit and loans.
No one can argue effectively that the deregulation efforts by Republicans in the 1980s has not led to the current state of affairs. Yet in the 1990s that same deregulation helped surge the economy forward. But when greed took over in the past eight years, government failed to intervene. The current crisis is the result.
It would be easy to blame the whole of this mess on the Bush Administration and certainly they are responsible for much of the problems we face right now. But Democrats and Republicans bear responsibility for where we are now because no one has–before Sunday morning–made any effort at oversights. Democrats believed as much as Republicans that growing the economy would benefit everyone.
In the end, it hasn’t. Instead the government has encouraged speculators on Wall Street while also encouraging a credit-heavy economy on Main Street. Most Americans carry at least $10,000 in credit-card debt–that’s debt that simply eats away at one’s financial foundation and grows annually with no return on the “investment.” The difference is, no one will be bailing *us* out for deciding to buy the kids new winter coats on credit, while Wall Street will be given a reprieve for bad investments based largely on greed.
The proposed plan now stipulates that the government would buy mortgage-backed securities and other bad debts now held by banks and other investors. The $700 billion would allow these lenders to make new loans and keep credit lines open. The government will allegedly try to sell these now wildly discounted loan packages at the best possible price to someone–most likely foreign investors, because China doesn’t have enough of a hand in the American economy already.
There’s a murky clause that suggests but does not demand that CEOs of companies aided by the bailout can only take “reasonable” bonuses. There’s another equally vague suggestion that people facing foreclosure might be helped out by some restructuring of mortgages.
Put those two things together and see if they don’t enrage you. Washington Mutual’s CEO will still get a bonus, but if your mortgage is held by WaMu, as mine is, expect nothing to be done to help you out.
Another disturbing surprise is that House Republicans–not the Democrats who are the ones most of us depend on to take care of the average American, not the CEOs–have demanded that a portion of that bailout fund be set aside for a program that would encourage holders of distressed mortgage-backed securities to keep them and buy government insurance to cover defaults, thus keeping the money in the country and keeping taxpayers from footing the entire bill.
One concern I have is that this kind of governmental bailout has failed in other economies much like our own–notably Japan and Brazil. In addition, the nationalizing of the banking system in Italy has resulted in wide-ranging inflation and a tax burden on the citizenry almost unmatched in the European Union.
Why do Paulson and Bernanke believe it will work here?
What you might have gotten for that $700 billion if the government had been paying attention to this problem before it escalated is this: National health care for every American for five years. Two Iraq wars (we’ll pass on this option). Total revamping of either the public education system or the transportation system.
These are just some of the options we might have had with that money.
But another alarming fact is–the $700 billion doesn’t actually exist. The Treasury is just going to print it up and use it on Wall Street.
Since you and I can’t just print up more money in our collective basements, we will be paying for this new money for years to come while having no new money to pay our own impressive debt load.
The immediate cost of the bailout is more than $6,000 for every American. But that will actually expand, not decrease over time, just like any bad debt.
And the bottom line is that the next president–Obama or McCain–will be saddled with the sure knowledge that he will not be in any position to give the proposed tax cuts each has promised while campaigning. The money simply isn’t there. This debt will accrue to all of us one way or another. If we don’t get it ourselves, our kids will. The punishment to all of us will come in cuts in services to us, our kids and our towns. Wall Street’s bill may never come due, but Main Street’s always does.
Which means no matter how you look at it, the government has failed us once again and this bailout–essential or not–reeks. We own it, but we should make it clear to our representatives in Congress that we are very unhappy about it.
An Event for the Environment
Please participate in this great fundraiser for Obama featuring environmental leaders including Robert F. Kennedy Jr. (named by Time as one of the Heroes for the Planet) and Dr. Michael Oppenheimer (member of the Nobel Prize winning Intergovernmental Panel on Climate Change). It will take place on Monday October 6 at George St. Playhouse in New Brunswick. The main event starts at 8 PM and the minimum contribution is $100. The minimum contribution for the pre-reception which starts at 7:15 is $500/person or raise $1,000 for this event.
The campaign needs to raise more resources now so it would be terrific if you could make a contribution to this event soon. Please contribute by clicking on following website. After making a pledge, please click on "Fulfill your pledge" and make your donation on-line:
If you have questions or prefer to send a check (made out to Obama Victory Fund) please contact either Josh Haimson ( firstname.lastname@example.org; 732-740-1238) or Meryl Frank (Mfrankhp@aol.com)
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