Isn’t there a phrase, “You broke it, you bought it”? Wall Street asked for Washington to break our economic system. The economy is lashing back at Wall Street, and Wall Street should not be given a “Get Out of Jail Free” card.
While Greider’s writing gives a stunning indictment of American policy, American government, and the American people, it stops short of indicating the reality of the situation---neither party, Republican or Democrat, is going to stand up to Wall Street, attempt to reform economic policy, and defend Main Street against the speculators on Wall Street intent on robbing all classes of Americans blind.
Jim Hightower, a well-known progressive writer, has this to say in his most recent column:
For me, however, two other fundamental flaws in the bailout are the most damning. First is Bush and Co.'s assertion that these financial corporations are "too big to fail," so taxpayers simply have no choice but to pay billions of dollars to preserve them. Hello. Instead, shouldn't we be breaking them up, so America is not at the mercy of such behemoths and so we can instill a bit of competition in the system?
Second, with the Paulsen plan, Congress is again being rushed into subverting our country's democratic heritage by authorizing autocratic executive supremacy. Paulsen himself would have dictatorial power to allocate the money and set the rules. Congress would get semi-annual reports, but have no control. And the judicial branch of government is peremptorily dismissed by the White house scheme, explicitly barred from considering any aspect of the bailout. We the People would have no recourse to stop executive abuse.
Hightower voted for Nader in 2000. And a transcript of a discussion where he defends his decision to support Nader from 2000 can be found online.
Bob Kuttner has put forth a slew of fantastic analyses on the financial turmoil we are in. This is from his article on Paulson’s Plan:
But what about the core of the Paulson plan itself? Here, Congress needs to think outside the box. Paulson's basic idea is to have government buy up $700 billion worth of dubious mortgaged-backed securities, hold them for a time until normal markets resume functioning -- is both necessary and sufficient. The plan has three larger purposes: recapitalize banks; get bad paper out of the system; and restore confidence generally so that the downward spiral ceases and the frozen credit markets unlock.
However, Paulson's approach is not the only way of fixing what's broken. At the heart of the problem is that the exotic mortgages that were the underlying basis for additional layers of derivative securities are, to use the technical term, crap. These securities include bonds backed by the mortgages, insurance contracts guaranteeing the bonds against default, etc. They are valued at many times the mortgages themselves, thanks to the miracle of leverage. As the whole show "unwinds," financial institutions and their investors are out many trillions.
What if Congress doesn’t think outside of the box? We have Kucinich and Paul scrambling madly to get some to take this opportunity to do much more than simply bailout Wall Street. Both have views of the economy that could be considered polar opposites, but the two are sticking up for what they believe in and are standing up for this so-called Main Street we keep hearing politicians refer to.
Kuttner wrote in 2002 in a column titled, “Nader Had It Right All Along,” that “if anyone look[ed] prophetic these days, it was Nader”:
The Enron collapse is having a ripple effect on the rest of Wall Street, reflecting years if not decades of corporate balance-sheet abuses, insider enrichments at the expense of workers, pensioners, and communities, and bipartisan regulatory defaults.
President Bush's new budget cuts outlays for children, hospitals, worker training, and spending on the needy. A serious prescription drug program is nowhere in sight. Regulatory agencies - including the Securities and Exchange Commission in the Enron era - take major hits.
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