It will be an unprecedented political disaster if either candidate garners the support needed to pass the corporate bailout that was roundly defeated this Monday. By now one can make a convincing case that Nancy Pelosi, with purpose, derailed the legislation by giving the GOP no choice but to foot the blame and the bill.
In an ongoing commentary about the fecklessness of McCain’s acuity, he actually claimed credit for the passage of the bill prior to its passage. This move now looks even more damaging than it appeared at first. Not only did he try to broker a deal among his own party on a terrible bill, but his claim of leadership among his own cohort was called into question.
Now we hear word that both presidential candidates are redoubling their efforts to push forward a new version, perhaps lightly modified, of the bill by Thursday in order to claim credit.
The problem, not at all hard to finger, is that the public, with reason, unabashedly opposes this heinous piece of corporate welfare. A saw that has been honed in the past few days states that the only acceptable form of socialism in the United States is socialism for the rich. I would take it a step further and argue that welfare, too, resides in this same realm. A single mother relying on her will, energy and a bit of government support to survive is a leech; a failing bank, witless and morally spent, relying on exploitation, profiteering and a whole lot of government support to survive is rather a national imperative.
I am no economist, but the market failing in reaction to Monday’s legislative conscientiousness rather than as a result of the prior week’s failings, only furthers my claim that this is a load of artificial bullshit that is meant to scare the spineless bunch up on the Hill into repaying the lobbies that have provided endless bacchanals over the past decades. Now there are certainly legitimate concerns about the failings of cash in this strapped marketplace, but giving low interest loans rather than buying equity in the cornered financial institutions provides this fire of mismanagement with the fuel of billions of dollars to continue burning.
Who, then, pushes through a bill that is a mirror of Monday’s failed effort will die a sudden political death. I hope that over this oldest of new years a novel focus on this pending crisis may emerge.
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4 comments:
Recent reader, first time poster...Oh and I am not an economist.
Well said. Why is it that people are playing the blame game and not the credit game? Individuals interested in the politics or economics of this situation should be taking credit for the failure of this, as you describe it, bullshit legislation.
I feel my blood boil and blood pressure raise whenever I think about this corporate welfare. On the flip side I laugh hysterically when I see the disappointment and frustration in President Bush's face.
And I think you hit the nail on the head about market reaction. It's financial terrorism. Yeah, I like the sound of that. Or maybe economic terrorism. These terrorists are employing the market to hold politicians and the American people hostage. Give us $700 billion dollars or else we tank the markets. What ever happened to not negotiating with terrorists? Good for those who are bold enough to stand up and say no.
The proposed bailout of 2008 should be known as a time in our history when economics revealed itself as political. By this I mean, our politico-economics has shown that The Market is not constituted by natural laws or all too rational individuals. Instead our present day economics is and always has been determined politically. At stake in our economics is our politics. At risk in our politics is our economics.
And what if we are cutting off our nose to spite our face? And this is a real possibility. Sure there will be very real consequences if the bailout does not pass. I do not find the credit freeze a very persuasive argument. Perhaps it is time for most of America to stop living beyond our means. Maybe it is time for us to learn the hard way.
Big and small business loans might be lost. Jobs could be lost. Corporate payroll would lost. Credit card limits will be down and there may not be as many presents for the holiday. I am most persuaded by the loss of jobs argument. I say good day to our credit based economics.
Well, maybe instead of fetishizing consumptive practices we can develop different economic, social and political relationships. Instead of buying off others, including family members, by digging ourselves deeper into debt we can spend more time building family and community.
Perhaps we should invest half of the 700 billion in a new new deal. I bet we could create jobs by building a new energy infrastructure. Let's call in the Green New Deal. Both McCain and Obama are trying to sell the creation of new jobs, especially green collar jobs. Let this be their opportunity. Maybe we could invest in our educational system. An improved education system would, ideally, produce less dumb asses obsessed with greed.
Finally, I wonder if the financial crisis and buyout of 2008 is democracy par excellence? Has the voice of the people, however multiple, finally been heeded? If democracy is founded in participation and representation, conflict and dissent, and the possibility of democracy's own demise - is not the House's decision to vote down the bailout the success of democracy, even if it guarantees democracy's failure?
So we can all agree that we hold greedy corporations in contempt, that the ones to blame for this are the over-eager lenders and the regulators who allowed it. However, we can all also agree that we aren't economists.
So what do the economists say needs to be done. In my readings, they all seem to say that this bailout has to happen. I'm not happy about that, they're not happy about that, nobody is happy about that. It's lose, lose, lose in every direction, but the hole has been dug and now we have to deal with the economic shitstorm as best we can.
I can already hear the protests that the economists are the pocket of wall street or the white house, but I am of the opinion that the economic problem is more straight-forward than the political one it has created. I'm sure the bill before the house includes all sorts of unnecessary measures to cover peoples' asses or give someone an advantage over someone else. The point is that if it has to happen, it will happen. The better question is how distorted will it come out from congress.
I think something needs to be done. I also think that the welfare of corporations is sickening. Over the last few days, though, I heard something that even given my lack of background seems supported by unimpeachable logic:
When Warren Buffet and Berkshire Hathaway took over Goldman Sachs this past week, Buffet didn't give Goldman CEOs a bunch of money and say, "Well, I hope this time you don't screw things up so I can get a return on my investments."
Rather Buffet bought an equity stake in the company, making himself the new CEO, and then began his reshaping of the company.
It makes literally no sense to give hundreds of billions of dollars to a bunch of people who have literally come fresh off squandering the fortunes of decades old companies.
If the only opposition to nationalizing these banks in this way is some amorphous argument about the Free Market, then that same argument flattens the very rational of the bailout in the first place.
Also not an economist, but...
Nearly every time American politics intensify I wonder how things would be different if there was an opposition party, and I'm definitely feeling that way about the bailout.
The market fundamentalists (e.g. about 133 Republicans in the House) want to do nothing and let the markets work. Actually, since part of their solution is to cut capital gains taxes, that's sort of an understatement. Bush and Co wanted to pay higher than market values for securities in order to transfer taxpayer capital to the firms at fault. The Democrats apparently want only the right to tweak whatever proposal Bush and the House Reps agree to--they didn't even talk about offering an alternative.
Which is fine, since it would be terrible and corporate anyway. There would be nothing about supporting the real economy, based on actual things, as opposed to the speculative economy that, I agree, is terrorizing our politics (government not only negotiates with these terrorists, but heeds their desires).
In other words, nothing New Deal-like. As a model of what actually could be done, but not within our political status quo, a new new deal based on housing, alternative energy and government-involved credit is an interesting thing to think about. A Green Deal as Paul says. I've never heard anyone call the New Deal a bailout, and no one in power is talking about anything but a bailout except maybe on a semantic level.
We're subject to the narrow logic of a pretty restrictive ideology of market capitalism, in economics and, more importantly right now, in politics. One thing that makes this whole story a pretty gripping one to read about is the drama of the NO vote, which got its drama partly from the rarity of both crises and major unexpected NO votes.
But I can't think of it as a fleeting success of democracy because I have a feeling it's just conjunctural--the just sense that most people have that this is a rip-off that rewards the well-off guilty with wealth fits for now with the Republican's more formal market fundamentalism. So we got a respectable 'no' that for me is encouraging, but only a little.
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