It was a blackmail scheme, for sure. “THIS IS A SERIOUS CRISIS! Give us what we want or we’ll trash the economy, (and maybe declare martial law) THIS IS A SERIOUS CRISIS,” was the mantra of all the talking heads in the Bush junta–hardly the way to calm a serious crisis, more like the way to fan the flames. Congress blinked, and gave them the money, and agreed to overlook the fact that Paulson and Bernanke (and their godfather, Alan Greenspan) were the ones who ran the economy into the ground in the first place.
If Bernanke and Paulson had a shred of integrity, they would have offered their resignations. If they were traditional Japanese, they would have committed seppuku….(hey, I can dream, can’t I?) but no, they’re neocon men from Wall Street, aka American Fascists, so they just asked for more money. That’s a fundamental rule in the neocon playbook–never, ever, ever admit that you screwed up. No way anything they did could have been what trashed the economy, nossir.
They admitted that $700 billion was a number they pretty much pulled out of their asses. They even admitted that this was something they’d seen coming for a while. But somehow that didn’t matter when they said, “pay up NOW, on THESE TERMS or we’re all screwed!” (even though they’re not actually going to start handing the money out until mid-November!) They had America by the short hairs and everybody knew it, and so the Senate and ultimately the House squawked and grumbled and grew the proposal from three pages to over four hundred, with a few half-assed conditions thrown in, plus a lot of bribes to get people to feel a little better about the whole ugly mess–a hundred and fifty billion dollars worth of tax breaks for everything from toy wooden arrows to solar panels. Talk about perversion!
But hey, if they didn’t, Bush might declare martial law–after all, Congress gave him the power, since he was gracious enough to ask for it, and a brigade of US Army regulars has recently been reassigned to the US from Iraq, and are busy training in “non-lethal crowd control”–rubber bullets and tasers, which have proved lethal to plenty of people in their time. Uhh..anybody seen the Posse Comitatus act lately? Hmmm……but there’s no significance to that, no, none at all….just give us the money in small, unmarked bills, like what you gave us for Iraq…..
And what did these neo-con artists propose to buy with our seven hundred billion dollars? Worthless assets that banks created and got stuck with in the course of the Ponzi scheme that has been the American economy ever since Bill Clinton crammed NAFTA down our throats and America’s manufacturing economy literally went south.
Seven hundred billion dollars worth of bad mortgages. Seven hundred billion dollars for overvalued, trashed-out, abandoned houses, many of which would not sell for a dollar at public auction. Houses that it will cost money just to tear down. Actually, the financial instruments are so Byzantine that owning the debt on the house may not convey title to the house, so that means we’re not even getting the lot under a trashed-out house, we’re just getting a piece of paper, and good luck ever selling it for anything besides making “Save your CDO certificates/The United States Will Rise Again!” posters.
Hank and Bill will be generous with our money, giving the poor bankers whatever price they claim those mortgages are worth, but basically, Congress voted to spend seven hundred billion dollars on–nothing. We couldn’t afford thirty-five billion for childrens’ health care. We can’t afford to take proper care of Iraq war veterans. We can’t afford to rebuild our country’s infrastructure in a way that will mute the effects of climate change. We can’t afford health coverage for all. None of those things we really need will cost seven hundred billion dollars, all would have a clear payback, and in fact will save not only our money but our asses to the tune of far more than seven hundred billion dollars, but we can’t afford them.
Seven hundred billion dollars is what we spend every year on imported oil, and we can afford that. Seven hundred billion dollars is about a quarter of what the war in Iraq is likely to cost us, maybe less than a quarter. The tax cuts for the wealthy that the Bush junta pushed through have cost the government about four hundred billion dollars a year since 2003, for a total of two trillion dollars and counting, but none of the high muckamucks in our government seem to have any qualms about the cost of any of that. Hey, that’s all money into (or at least not out of) their pockets, and besides, they own the presses, they can print more dollars if they need ’em. Sure, they’ll be worth less (worthless? or just worth less? who knows!), and foreign governments and other investors may be a lot less interested in taking them, but the asses of the wealthy have been covered, and that’s what counts to the neo con-men. They will all be going off to someplace safe, leaving you and me to go down with the ship–and the bills.
Oh, and just in case Obama gets elected and has any ideas about doing anything creative, this will tie his hands, just like his pledge to continue the “war on terror” by escalating in Afghanistan will tie his feet. Smooth move, Mr. Rove!
There are a few sops thrown into this bill. Some of them could mitigate the chilling effect this bill will have on our national budget, if Obama’s government is progressive and courageous and not just a replay of the Democratic Leadership Council-led Clinton years that set us up for this mess. Now, maybe I’m crazy to expect courage from the Democrats at this point, but if Obama’s Secretary of the Treasury has the nerve, he can, instead of buying bad bank assets at high prices, buy preferred stock in the banks, so that the government will then own them in exchange for bailing them out. As bank owners, the government can change bank policy–and fire the scheming, selfish jerks–I mean executives–who got us into this mess. Paulson has this option, too, but you can bet he won’t take it. He’s not gonna sell his banker buddies down the river. From all indications, Obama is going to feel the same way–his main economic adviser is Jason Furman, who thinks Walmart has been great for the economy and free trade is a wonderful thing. La-la land stuff, y’know?
The bill also suggests that banks could renegotiate their nonperforming loans and mark them down to the real value of the homes involved, but that’s like asking Dracula to pretty please quit sucking the blood out of people. He ain’t gonna do it.
If they wanted to provide some real relief, they could have outlawed eviction, directing banks to negotiate a reasonable rent with folks who can’t make their mortgage payments. They didn’t do that. They could have loosened up our country’s newly draconian bankruptcy laws, which Joe Biden championed and which make it all but impossible for individuals to get out of debt, but they didn’t. Individuals need to take responsibility for their actions, but big rich banks can count on having the government to fall back on. That seems to be the lesson here.
Oh, by the way, one of the main reasons people fall behind on their house payments, besides losing their jobs due to corporate downsizing, is falling into debt and out of work due to serious illness or injury and consequent serious medical debts, even with insurance. But we are not going there, people, we can’t afford to do anything about that, no way–we got rich bankers to bail out–they’re more important than you common folk, dontcha know?
Congress capped the income and bonus payments to the top five executives in companies that accept a certain level of federal help, but you can bet there are loopholes in that provision. They also kept in most of Paulson’s original bid for dictatorial powers, saying that he could only be challenged legally if Constitutional grounds are involved.
What the bill does not admit is that home prices in this country are seriously inflated, and need to come down to reflect reality. The other thing this bill does not admit is that there are going to be more economic crises after this one, and the government has just used its last ammunition. In fact, as I write this, the headlines tell me the Down Joe average is, yep, down seriously, and that more economies around the world are in trouble.
Whatever comes next, we as a nation are now too strapped to do anything about it. Make sure you’re stocked up on food and have a way to cook it, and get set for some real fun.
music: James McMurtry, “We Can’t Make It Here Anymore“