Now Where The Hell is That Bailout?
With the exception of Kevin Drum over at Mother Jones I’ve noticed that politicians and blogger proponents of the federal bailout for Wall Street investment firms and the banking industry have become very, very quiet lately. Hilzoy at Washington Monthly occasionally posts doomy econ news from Roubini about the whole scene, but otherwise Obama and McCain say nothing, while Pelosi now proposes a public investment bailout. After Congress adjourned.
One can hardly blame them, really, because after two weeks of scare tactics and frantic shouting that we must do something! the Treasury Secretary, Paulson, did nothing, and then said, well, we got the bill out of Congress but, never mind! The Europeans are going to do something that makes sense, if they do it of course our people will be screwed because we were dunderheads who could do nothing after screaming we would do something, we have to keep up, so we’ll do that too.
Direct federal investment into select banks to inject cash into the banking system, so the rationale goes. Taxpayers get an ownership stake to the loaned banks, everyone feels confident and flush enough to loan cash again, and things will be better. Right?
Well, maybe. Not maybe as in the scheme may or may not work, but maybe as in Treasury might not be able to actually perform the monetary mechanics in a timely fashion, say by the end of the year. These things take time, President Bush said, meaning Paulson is flying blind and making it up as he goes a day at a time. At this point there’s no shame for Paulson in that, just an important reality to acknowledge.
If Treasury cannot in fact act in a timely manner because they’re flying blind and it’s highly likely new Treasury leadership will be in place in January why give Congressional authority for potentially $700 billion now? That question is as pertinent as ever, and still produces the same irrevocable answer: doing so was a foolish, stupid mistake. If in fact there was good clarity on a real plan of Treasury and Federal Reserve action much more time and care should have been taken to safeguard the public from abuse of their money.
It is extremely doubtful, for instance, that gross heinous CEO pay for these fattest of fatty fat cats on Wall Street and Banking will ever be reigned in, no matter how gluttonously they slobber at the public trough. Will hedge fund managers ever be taxed on their income? Ha. Americans desperately need faith in their government, and proponents of this bailout stupidity, infuriatingly at times, have simply written off with amazing flippancy the public anger this legislation provokes.
There’s an incredible price to pay that can’t ever be measured in dollars from that anger and loss of faith in our government as the Treasury Secretary wanders blind and billionaires laugh their way to the Bahamas with our money. I’ve always felt that fact was given enormous short shrift in the intense brief boiling brouhaha over the matter.
Indeed, now that the gale has subsided, so to speak, what should Americans and bloggers who are friends trying to do the right thing take away the noxious, reeking mess?
One, Treasury and Fed still have no idea what they’re doing and what they’re trying may or may not work, if in fact they can do it. As the Jedi Atrios at Eschaton has tried to explain many times, banks lost a tonload of money, they don’t know how much, and we’re screwed with bad times. Republican leadership got us into this incredible self-inflicted mess and the best chance to get out of it is to elect Barack Obama for Democratic leadership of the United States.
Two, for the love of baby Jesus, Tom Paine and the saints, question authority. What in the fark are y’all doing allowing yourselves to get scared and then doing what you’re told? Ay curumba, it’s been an extremely well-researched fact for forty years humans are tragically, absurdly, horrifyingly pliant to authority, scare them and tell them what to do and they scurry forth to implement the orders as if they ran on ms-dos, programmed by that hoofbeat of Satan, Bill Gates.
If someone yells the sky is falling and one must act now now now, don’t do it. As a matter of course I automatically never do anything that I’m told, often instantly just the opposite, but that’s a personal preference on life.
Three, well, at least Bush and Treasury asked for the money, with little fanfare Treasury has loaned AIG an amazing $140 billion on the fly, not even a by your leave, essentially no strings or conditions, along with “rescuing” other financial giants for others of hundreds of billions of dollars, oh well. Our leadership is flying blind and has smashed all the capitalism rules we used to work under.
In the dark and hard times that are sure to be closing in on us soon cold, real comfort can be gleaned from that knowledge: the rules have changed. If banks are so critical for us all and we’re all in this together well, then, our children can get healthcare. Our schools can get textbook money. We don’t have to live with hordes of hungry poor in slums, we really can make government work since it’s always the solution to our problems. Right?
Right. There wasn’t any room for the little people at the table when it all was so rush rush rush, but with time and new Democratic leadership legislation can finally start to be crafted next January for the people of the United States, not Wall Street.