09/29/08: Congress votes TODAY on $700 billion Wall Street bailout
Submitted by staff on Mon, 09/29/2008 - 6:45am
Economist Nouriel Roubini, who accurately predicted the crisis when Treasury Secretary Henry Paulson was still claiming the “fundamentals of our economy are sound”, describes the bailout as "a disgrace" and "a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer.”
Professor Roubini also writes, "It is pathetic that Congress did not consult any of the many professional economists that have presented alternative plans that were more fair and efficient and less costly ways to resolve this crisis."
We have time to do this the right way, protecting workers and homeowners without rewarding corporate criminals. Contact your members of Congress here...
Not sure what to say? Here are 10 reasons to "just say no" to the Wall Street bailout and an alternative plan is outlined in "A bailout we don't need." Progressive economist Dean Baker writes, "we did get through the crisis last week with quick actions by the Fed and Treasury. There is no reason to believe that with comparable steps in the future, coupled with the raising the $100,000 limit on deposit insurance, as suggested by Jamie Galbraith, that we cannot keep the financial system operating." And Senator Bernie Sanders says "no" to any bailout that isn't paid for by increased taxes on financial speculators and the rich.
Monday, Sept. 29: WNPJ past chair Bonnie Block writes to her Representative, Tammy Baldwin:
Dear Rep Baldwin,
I know that tomorrow you will vote on the proposed $700 billion bailout for Wall Street. This bailout is being proposed by Secretary of the Treasury Paulson who is in part responsible for creating this mess, so how can more of the same solve our problem and why ever would we trust him to do what is right when at Goldman Sachs he ran with the pack of CEO's getting multi-billion dollar salaries, stock options, bonuses, and other perks?
My son lives in Princeton, NJ and Rep Rush Holt (12th District) replied to his objection of a bailout with a suggestion that seems to me very logical. Holt said:
For any problem, you should go to the root in order to solve it. The root here is that the bad mortgages mixed with the good mortgages have poisoned the financial papers. In buying those papers, taxpayers won’t know whether they are getting any value for their dollar, and neither Secretary Paulson nor the market will be able to determine the value. So go to the root of the problem: repair the bad mortgages. The Administration approach is to help Wall Street and hope eventually that helps Main Street. That is backwards. Helping Main Street will help Wall Street, and it will restore confidence, liquidity, and solvency.
There is antecedent for this: the Home Owners Loan Corporation (HOLC), which the Federal Government created in 1933 in that mortgage crisis. This program, which lasted 20 years, shored up a collapsing market by purchasing delinquent mortgages at a discount and working with homeowners to restructure the mortgages into more manageable terms. Congress and President Roosevelt authorized HOLC for $4.75 billion – or $76 billion in today’s dollars. With this investment, in its first two years, HOLC helped more than 1 million homeowners. In fact, when the HOLC finally ended, it showed a net $14 million surplus for taxpayers. Congress would be wise to consider the HOLC as it works to pass a financial bailout package. If there needs to be a bailout it should be a Moratorium on foreclosures (my emphasis)
I just don't believe this ungodly rush to bailout the greedy and incompetent people running our financial institutions is a good idea. This is the third time the Bush Administration has used a supposed crisis to push Congress to enact an immediate solution that I believe is worse that what it was meant to cure. The first was the disastrous Patriot Act passed right after 9/11, the second was the authorization for war against Iraq because of the supposed WMD, and now this $700 billion dollar bailout to rescue Wall Street because Bush/Paulson and company think that the folks who made this mess will fix it if only we give them a blank checkbook.
Furthermore, I believe our economy will collapse, bailout or not, as long as we continue:
1) spending 60% of our federal budget on the Defense Dept, Homeland Security and Veterans Benefits (mind you I support veterans getting what they need when they return from war but we wouldn't need to spend this money if they stayed home in the first place)
2) giving tax breaks worth $1.3 trillion dollars to the super rich
3) worshiping at the altar of corporate globalization with it's mantra of "privatization, deregulation, and cuts in govenment spending" which has resulted in a huge and growing divide between the very rich and the rest of us (see www.faireconomy.org)
4) overconsuming so we have a huge trade imbalance and are a debtor nation using 25% of the earth's resources when we are only 6% of the earth's population and
5) refusing to drastically reduce our carbon footprint by a major investment in sustainable energy and development.
If we waste this $700 billion in rewarding executives that ought rather to be charged for the crimes of fraud, malfeasance, and corruption where will we find the money to provide for real human needs so we can end hunger and homelessness and provide health care for all of us?
Please vote NO!
Sincerely,
Bonnie Block,