Photo by Flickr user jonnystiles, used under a Creative Commons license.
In yesterday’s post on Sarah Palin and Hugo Chavez, I implied that redistribution of wealth runs contrary to Republican principles. As the past few days have shown, there’s one massive exception to that: when redistribution all goes up the food chain instead of down it.
The whole mess is complicated and I don’t pretend to understand all of it. Basically, though, it’s clear that Wall Street fat cats gambled with their money, and those of us who are very small kittens by comparison will now be forced to cover their losses. Scandalously, the Bush Administration’s plan does not provide for any oversight, re-regulation of the banking industry, or restrictions on the compensation of executives in these high-flying financial companies.
We do need some sort of a bailout, I think, because the alternative would risk economic collapse. But any bailout should enforce accountability on these people who have not shown themselves to be trustworthy. Also, if we taxpayers are forced to make what amounts to a massive involuntary investment in these highly risky companies, we should at least gain a serious equity stake in return! That is, as investors we should partake in any future profits.
Ideally, the Wall Street bailout should be coupled with relief for homeowners facing foreclosure. I don’t know if this is politically feasible right now, but justice demands it. So does economic good sense: Our economy depends, after all, on consumers being financially healthy enough to actually consume.
Glenn Greenwald has a great analysis that puts the radical magnitude of the problem – and its proposed solution – into perspective.
The headline in the largest Brazilian newspaper this week was: “Capitalist Socialism??” and articles all week have questioned — with alarm — whether what the U.S. Government did has just radically and permanently altered the world economic system and ushered in some perverse form of “socialism” where industries are nationalized and massive debt imposed on workers in order to protect the wealthiest. If Latin America is shocked at the degree of nationalization and government-mandated transfer of wealth, that is a pretty compelling reflection of how extreme — unprecedented — it all is.
Yeah. Funny how it’s only “socialism” when the little guys are getting help. This sort of redistribution? It’s just hard-nosed capitalism. Help me out – can somebody please explain that to me again??
The Democrats are as panicked as anyone about this, and I’m afraid they are going to just go along with the bailout sans accountability unless we hold their feet to the fire. We’re talking about at least $700 billion and maybe upwards of a trillion dollars that our children and grandchildren will still be financing. It’s time for the Democrats to grow a pair.
I don’t often urge my readers to take some specific political action, but I really think this warrants a call to your representatives in Washington. I called Senators Sherrod Brown and George Voinivich today, along with Rep. Charlie Wilson. If you don’t know your representatives’ numbers, the Capitol switchboard is at (202) 224- 3121. Please let me know in comments what you think ought to be done about the mess – and what you’re doing about it.
Update, 9/24/08: Here’s another reason why we can’t give the fat cats a blank check without any accountability. The FBI is investigating AIG, Fannie Mae, Freddie Mac, and Lehmann Brothers on possible fraud charges.
Patron cat of Kittywampus (1985-2001)
What an interesting point you have raised here, Sungold! The fundamental criticism of the Left by the Right is that if you create a safety net the feckless will snuggle down and live in it, while the true knights who have the strength, the intelligence, the courage and the industry are dragged down – and with them the health and success of the whole nation.
The great vision of the Right is improvement by social Darwinism – the fittest, the ablest and the most circumspect survive, flourish and strengthen the national stock, providing jobs and sustenance for the rest.
But now it seems that seven hundred billion is being used as welfare for failed City gamblers!
It is another case of the cosmic cow (anathema to the Right) – poor orphans that we are, we stretch up to the sky and pull the teat of the great cosmic cow. She will save us. She will give us milk when we need it. All we (or they)have to do is pull and suck.
This quandary has arisen just when the spotlight is on Darwinism versus compassion, and random mutation versus planned improvement (and I think soon we will come to a new understanding of all these at things at once).
A friend of mine who is the nicest fascist I know (he extends a helping hand to the fallen, not because he believes in it, but because he just can't stop himself)writes as follows:
"Re your other e-mail on U.S. mega billions bail-outs, what judgment can I offer beyond what I have already suggested? I think Hank is conscientious, sincere and a good diplomat in securing much cross-party conscensus on support. Sworn enemies of each other seem to trust him as a straight shooter. Rather a joke that, in the Japanese banking brouhaha in the 90s, the Americans were recommending they let the odd bank go bust. I find it surprisingly lacking in imagination re public perceptions that the bail-outs were not accompanied by elimination of severance packages for those supposedly responsible for disasters. (C.E.Os of Freddie & Fannie cleaned up about $21m. between them. This is atrocious P.R. for a suffering electorate.)"
Meanwhile Alister McGrath wrestles with Richard Dawkins (who expects no unseen compassionate hand to help him to his feet when he gets knocked over).
Agree. Also re redistribution – don’t forget the $ we’re floating for Iraq. And the fact that the blue states provide the lion’s share of revenue, yet we’re stuck with the debts incurred or caused by our red state leader. Why don’t we just bend over, ya know? Grrrrr….
Hi John. Yeah, Social Darwinism only applies to the poor. Perhaps that’s why we seem to have such poor leadership in large swaths of the economy? Mind you, that’s mostly tongue in cheek – I’m no proponent of Social Darwinism. Yet I do think a little selective pressure on these CEOs would be a good thing. I don’t see why the rest of us would lose our jobs for such performance, yet they reap millions in bonuses.
Laura – those are good point. I’d like to see a calculation of the total national debt incurred for stupidity under this administration.
I don’t know how much of the burden Ohio is bearing; we’re kind of an economic basket case, after all.
Cool, you’re purple. For more on the the disparity between incoming revenue and outgoing expenditures (Blue versus Red), see:
http://www.fuckthesouth.com/
(You have to have a sense of humor when the economy is on the brink of collapse, right.)
Purple’s a great color – it’s just a nervewracking political position. People here are talking – ranting – venting – about politics at the after-school pickup, soccer games, my women’s studies meeting today. It’s not just me who’s obsessed, though I’m surely among the worst offenders.
I don’t know about the rest of the state, though, because I’m in a deep blue bubble. Our town may well go stronger for Obama than any other, especially if we get a good student turnout. It’s hard to say how much passion is present in the dark red areas – the surrounding poverty-stricken Appalachian counties, the Cincinnati suburbs, etc.