I am not an economic expert, but the experts created the financial disaster knocking at our door. The vote in the House of Representatives against the massive economic bailout of criminals on Wall Street reminded me of my favorite limerick:
There was a young lass from Australia
Who painted her ar*e like a dahlia
The color was fine
Likewise, the design
But the aroma? Now that was a failure
True compromise requires opposing sides to sacrifice some of their goals to obtain an agreement that also provides substantial benefit to the opposing sides. The economic bailout/sellout agreement that was rejected by the House of Representatives was more of an extortion racket than a compromise. The intense anger directed by the public against the economic bailout/sellout proposal stems from the fact that it rewards the recklessness and greed which led us to the brink of financial ruin, and in return, the American public receives window dressing. The pending bailout/sellout plan supposedly curbs excess executive compensation for participating businesses, but candid architects of the failed bailout/sellout plan admit that this provision is a sham. A very large number of business executives are primarily concerned with plundering their businesses, and the angry constituents of corrupt members of Congress think that the proposed "compromise" bailout/sellout plan will fail due to the same abuses which precipitated the bailout/sellout.
As the departed George Carlin observed: "Bipartisan usually means that a larger-than-usual deception is being carried out." Most opponents of the bipartisan bailout/sellout plan acknowledge that the current financial mess will hurt ordinary Americans, but the solution that has been offered does more harm than good. In a standard protection racket, the victim pays the criminal to prevent the criminal from ruining his/her business. In the bailout/sellout agreement negotiated by congressional leaders, the victims are being asked to pay the criminals to prevent the criminals from ruining our economy even more than they already have. The victims of a protection racket know that the payments to the crooks never end.
As dire as the situation may be, the current financial crisis offers a good opportunity for necessary regulatory reform, but the howls of protest from members of Congress are just bad theater to provide cover for a "compromise" bailout plan that pours good money after bad. There have been some bleats from Congress about the prospect of the U.S. Treasury Department artificially inflating the value of the bad debts that financial institutions seek to excrete on the American public, and that is certainly unconscionable, but some of us have memories, and another factor which should be (but will not be) considered by Congress is to ensure that, when any assets which may be acquired by the government are later sold back to the private sector, these transactions should not be sweetheart deals that again rape the American public, such as the sales of assets made by the Resolution Trust Corporation in the aftermath of the Savings and Loan scandal.
A better solution to the financial crisis (and a solution that would not infuriate the public) would result if much more stringent regulation of the financial services industry (including, but not limited to, making it illegal to trade in derivatives such as credit default swaps, legislating significant limits on short-selling stocks, and requiring that all stockholders be allowed to vote on executive compensation packages) were incorporated into the current bailout proposal. This suggestion does not originate from me, but the public would be more willing to accept an economic bailout plan if it required the people receiving the most benefit from the proposal to pay for the bailout via a tax on securities exchanges, and if significant inequities in our tax system were also addressed (such as by increasing the tax rate on capital gains, and by rejecting any extension of most of the tax cuts initiated by the Bush Administration, and by eliminating the fraudulent transfers of capital to offshore tax havens). These proposals certainly would be opposed by the Bush Administration and their unreliable Republican allies in Congress, but the Democrats will have no leverage for such proposals if they are not included in any agreement to prevent the criminals on Wall Street from destroying the economy for themselves and the rest of us. Unfortunately, the Democrats who have been leading the parade for the current economic bailout/sellout plan are as corrupt as the Republicans.
