Sunday, September 21, 2008

WMD spotted on Wall Street. Congress rushes to invade our pocketbooks

(Note: I've been working on these thoughts on the Bush bailout of his Wall Street friends for a few days. It's not finished, but I thought I would try something different. I am publishing it and will keep working on it. If you have any comments that would be really helpful. Thanks, Dan)

Remember those pesky WMDs that brought all but a few members of Congress to vote to give Bush (Cheney?) the power to invade Iraq. There was no time for questions and anyone who didn't go along was unpatriotic. Well we know how that went. The Democrats caved in and disaster followed apace. Here we go again. The Democratic cave in: the sequel.

Bush "experts" rush to Congress asking both parties to solve the latest problem by giving more power to the administration. "The sky is falling, the sky is falling," Chicken Little Paulson (Secy of the Treasury) cries and there's no time to waste asking questions or discussing alternative measures that might pick our pockets a bit less. If you hesitate for even a moment, you will be labled an obstructionist by Bush. That scares the votes out of the Democrats.

The Congressional Republicans are no problem for the administration's latest scam. They know who they work for and on which side their political bread is buttered. But will the Democrats - who ostensibly work for us - fall into line or will they ask questions and consider alternatives. At the moment it doesn't look promising. [Note 9/23: It's hard to tell yet, but there may actually be some resistence this time-even from Republicans.]

But maybe Candidate Obama will remember that he's also Senator Obama or perhaps Sen. Clinton can exercise some leadership and speak for us. So far the only opposing senatorial voice I've heard is Vermont's independent Bernie Sanders

I don't have a handy solution in my economic quiver, but it would seem as if the bulk of the solution should come out of the pockets of those who caused the problem and benefited from it, not from those of us who have been helplessly watching from the sidelines. Let's not forget that this crisis is a direct result of the right-wing ideology of deregulation. Much like the Iraq invasion and subsequent occupation was a result of a delusional strategy for solving the energy crisis (under the cloak of spreading the American way to the benighted Middle Eastern infidels by whatever means necessary). It's not surprising that, in yesterday's announcement, Bush said we shouldn't waste time looking for explanations of why it happened, but just let him protect us from the Wall Street WMDs.

Always be fearful of a Bush demanding speed and a "clean bill," which according to Paul Krugman (NYT, 9/22/08):
But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.
Since it was elected by the Supreme Court in 2000, the Bush administration has been devoted to achieving two results: (1) To enhance the powers of the imperial presidency at the expense of the other two branches of the government; and (2) to use this enhanced power to enrich the wealthiest portion of the population to the detriment of the middle and poorer sectors. Just as they used 9/11 to pass the Patriot Act and create the Homeland Security Department and ultimately to carry out the long-desired invasion of Iraq. They now want to divert a minimum of $700 billion to the richest corporations. And get absolute control over this "bailout." Here's what Bob Herbert says (NYT, 9/23/08):
Lobbyists, bankers and Wall Street types are already hopping up and down like over-excited children, ready to burst into the government’s $700 billion piƱata. This widespread eagerness is itself an indication that there is something too sweet about the Paulson plan.

This is not supposed to be a good deal for business. 'The idea is that you’re coming here because you would be going bankrupt otherwise,' said Mr. [Dean]Baker [of The Center for Economic and Policy Research]. 'You’re coming here because you have no alternative. You’re getting a bad deal, but it’s better than going out of business. That’s how it should be structured.'
Here's a really good analysis by Katrina Vanden Heuval's Editor's Cut

Naomi Klein applies her Shock Doctrine theory to the current situation:
It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same.

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