“No one can rightly deny the fundamental correctness of our economic system.” — Herbert Hoover, 1928
Let’s talk about McCain, Obama, The American Taxpayers, the Bailout of Wall Street and why we are probably up the creek with an imaginary paddle. The $700,000,000,000.00 bailout (I had to write the number out completely just to see all the zeroes… it gives me a chill) which Secretary Paulson is asking for, with a statement that Decisions by the Secretary “are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency,” is being pushed by Bush (I guess… he has made himself pretty scarce) and Cheney (who visited Congress and left looking just as angry as when he went in.)
Paul Krugman in the NY Times, whose opinion on economics I respect pointed out:
The Treasury plan, by contrast, looks like an attempt to restore confidence in the financial system — that is, convince creditors of troubled institutions that everything’s OK — simply by buying assets off these institutions. This will only work if the prices Treasury pays are much higher than current market prices; that, in turn, can only be true either if this is mainly a liquidity problem — which seems doubtful — or if Treasury is going to be paying a huge premium, in effect throwing taxpayers’ money at the financial world.
And there’s no quid pro quo here — nothing that gives taxpayers a stake in the upside, nothing that ensures that the money is used to stabilize the system rather than reward the undeserving.
As Congress debated this bailout – they continue today in a joint committee session – it became apparent that Secretary Paulson and Chairman Bernanke’s insistence that this had to be adopted immediately would be up against serious opposition. There appears to be an overriding opinion that oversight is necessary, that firms bailed out should not walk off with millions leaving every taxpayer with a $2300.00+ tab and no equity in the affair, and that “Main Street” should not suffer at the hands of “Wall Street.”
This may all be mask and costume on our regular performers… there is an election season coming up for Congressfolk as well as Presidents. If there was a lot of trust on the part of the voters for those that have been in charge, it is now absent.
Obama has stated that “the power to spend $700 billion of taxpayers’ money cannot be left up to the discretion of one man, no matter who he is or which party he is from. I have great respect for [Treasury] Secretary [Henry] Paulson, but he cannot act alone.”
McCain said he is seeking “basic improvements” to the legislation but also wants a “path for taxpayers to recover the money.” He does not, however, define that path.
It is not clear how either candidate will get specific changes into any legislation.
I began this post with a quote from Herbert Hoover, the last Republican President whose administration let the powers of Wall Street get away with whatever they wanted and screwed the average taxpayers. They left us with the Great Depression. I am convinced that this is a Republican phenomena. Some facts:
And the current administration has actually helped companies that once employed Americans to move overseas, raised our unemployment rates, and tried with all of its might to privatize social security.
So here we are, pretending to row upstream with our hopes, wondering when we will have to accept the fact that the paddle is imaginary.
