It is interesting to read the New York Times columnists and editorial writers, among many other papers, ridicule the Neanderthal Republicans for voting against and killing the bailout package negotiated between the Democratic congressional leadership and the White House. They seem to forget that 40% of Democrats in the house (90) voted to kill the package, as well.
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Without the Democrats voting no, the bill would have passed despite Republican grassroots anti-government conservative opposition. The Democrats who voted no were Progressive Democrats, Mexican American and Black members (many, not all), the Blue Dog populist southern and working class democrats who did not trust this bail out of wall street that did not have enough safeguards for working people, regulations on the financial industry or controls over the fox Paulson watching the banking/financial industry henhouse.
They knew when they voted against this that the nation is in a crisis that has to be addressed. They did not believe this bailout package was the answer. Perhaps the congressional representatives who voted no thought that the idea that the government would come back in five years to report to congress made little sense, or that that the little guys’ interests would never be taken into account when the bill presented used words like "may" instead of "shall" or "encourage" instead of "mandate" when it came to aiding Americans confronting losing their home or rising mortgage costs.
The Republican opposition may never vote for a bailout. They love deregulation, voted for it, created it and bow down to it. They think the market will correct itself, and the people should not be bailing it out. They helped create this mess and they seem content to live with it. They have a strong, passionate ideological belief in small government and an unfettered marketplace and they are sticking to their poltical guns.
In the eighties and nineties, they killed the Glass-Steagall Act created under FDR to regulate the banking industry that ensured that lines of investment and banking would not be crossed. They led the deregulation of everything possible and pushed through bills that made it easier for banks to foreclose on people’s homes. Instead of protecting mortgage lending, they allowed bundling to make billionaires out of thin air with faked paper to be traded across the globe. They did it till the dot com bust and they did it until the housing market’s sandy bottom gave way.
Ahh, but to be fair, let’s not forget the crown jewel was laid during the Clinton years when another Goldman Sachs leader, Robert Rubin, was Secretary of the Treasury. What began under Reagan had its last driving nail in the coffin of regulation protecting the citizens’ interest under Clinton.
Now the Democrats better get their act together. It might have made sense to vote this pro Wall Street bill down as it was written but we are in a hell of a mess. Credit is tightening. We are about to be served big time with tightening credit on everything from our cars to credit cards (you think 20 something percent is high, just wait) to our homes and our small businesses, which are the backbone of this economy. Banks are going belly up, being eaten by bigger banks, banks are not loaning each other money, let alone us, our retirement accounts are getting hit hard (remember it is all privatized and in our 401K hands now), gasoline shortages are beginning to occur, many small businesses may close, unemployment is going up and will go higher.
The leadership better stop worrying about brining the needed votes in to pass all this by Thursday and start paying attention to the smart voices in our society who are warning them about what to do.
Hedge fund leaders, like George Soros, who helped get us into this mess, are trying to say no to the bailout, there is a better way. Hundreds of economists, led by Nobel Prize winner Joseph Stiglitz and others, are saying no to the bailout. Social thinkers like James Galbraith and Mark Sumner are outlining alternatives. Read them, hear their testimony and wrestle with their ideas to help us find a solution.
We need to pass a bill to help America, put credit back on track, invest in our infrastructure, protect those losing their homes and regulate our finance and banking industries to protect them from themselves and from destroying us. The marketplace must be free but with freedom comes responsibility and limitations.
The sweeteners that the Democratic leadership offered today of expanded FDIC coverage to ensure deposits up to $250,000 may assuage the small banks who will then lobby their congressional representatives to pass this measure. Will it turn the tide? I am not sure. Will the power of the Congressional leaders in the House and Senate be able to twist arms hard enough so their members drop their call for safeguarding mortgages, more regulation on finance and greater oversight on Paulson and Bush?
That question will be answered by tomorrow when the House votes again. Will the citizens win or will the power of finance rule the day? We will find out.
