Reason #1 to be suspicious of the Big Big Bailout is George Bush.
This is not a Bush bash, it's actually an analysis. All major George Bush initiatives, and most of the minor ones too, have certain things in common.
1. They're failures.
2. They leave a big mess for other people to clean up. Someday.
3. They make matters worse.
4. Some small group of people profit from it, and they profit hugely.
5. That profit comes from using the government to take money from ordinary people and give it to people who are already very rich and well connected.
The Bush initiatives include:
1. The decision, before 9/11, to ignore Al Qaeda and concentrate on... who knows exactly what.
2. The invasion of Afghanistan for the purpose of capturing (or killing) Osama bin Laden & the rest of Al Qaeda. (When thinking about this war, and the others below, keep in mind that an unknown amount of the spending - but certainly more than half - goes to private contractors, the defense and the intelligence industries.)
3. The invasion of Iraq.
4. The occupation of Iraq.
5. The reconstruction of Iraq.
6. The reconstruction of New Orleans.
7. The Medicare Care enrich the pharmaceutical companies bill
8. The tax cuts that would promote jobs - "good jobs" - and growth.
9. When the tax cuts failed and led to a recession, more tax cuts.
10. The theory that tax cuts would not create deficits and would pay for themselves.
11. Anti-regulation efforts. There were thousands of these. They came through setting policies, executive orders, selecting pro-industry, anti-regulation, incompetent - and sometimes corrupt - staffers.
12. Hyper-low interest rates from the Fed. This created the flood of cheap money and created the conditions under which the most profitable thing that banks could do was to borrow from the Fed, turn around, make loans as fast as possible, then rush back for more. It was the equivalent of giving free coal to power companies and not anticipating that they would then proceed to create more pollution.
13. The attempt to privatize Social Security.
If we step back a moment from the crisis, and look at it as if we're not involved, the likelihood is that saving Wall Street - in this fashion - will do exactly the same thing.
It is certain, absolutely certain, that it will make a group, a very small elite group, of very, very rich people, even richer.
A cap on executive pay, while laudable and a step in the right direction, will not, in the end make much difference. They have millions to spend on accountants, lawyers and lobbyists who will find, or create, ways around any caps. It will make them rich by using the government to take money from ordinary people and giving it those rich people.
Will it fail?
Based on Bush's track record, the smart bet has to be yes. Why will this one, like all the others, fail? Because it's addressing the wrong things.
The real problem is that we have moved from a production economy to a consumption economy. Even worse, a consumption economy that supports the production economy in other countries. When we start to consume more than we produce - which we have - we must borrow. That means we're selling off or mortgaging our assets. If we were to do that to create more production which would ultimately pay for the investment, that would be alright. But we're not, we're just consuming more. You can't borrow your way out of too much debt. At least not without a plan to create more income. You can't consume your way out of an over-consumption problem.
If we don't address the fundamentals now, we will have to do so later. At that time, they we will be worse. Both by themselves and with the addition of the new $700 billion debt.
The ultimate problem is remaking ourselves into a production economy.
Is that possible? Yes. And it's probably cheaper than $700 billion or a $1 trillion bailout of the banks. What if we took some smaller number - say a mere $500 billion - and decided to invest it in things like the following:
1. National health. Thereby making our older industries, burdened with health insurance commitments more competitive.
2. Protecting our coastlines. Thereby protecting ourselves against the huge losses from hurricanes like Katrina & Ike.
3. Investing in alternative energy, particularly wind and solar, and rebuilding the electrical grid to facilitate that. The work required to do that could not, for the most part, be outsourced. The jobs and the business would stay here.
4. Rebuilding our infrastructure generally. Good, efficient infrastructure makes business easier, quicker and cheaper.
5. Buying up individual problem mortgages.
6. Setting up a federal bank to make emergency loans to businesses and individuals who have come into harms way as a result of the crisis created by the Bushocrats and the Titans of Banking. When they're busy scaring us into this greatest of all heists in human history, they always talk about how it will affect "small business owners" who won't be able to make payroll, and the jobs and homes lost, to average folks on main street. If they need taking care of, let's do it directly, instead of through the rip-off artists who created the crisis.
The Big Big Bailout, as it is, will be crowning glory of Bushianity. One, gigantic theft of from real Americans to enrich the ruling class. It's a hell of trick. It's just like all the ones he's pulled before. If we fall for it, we are suckers and rubes, indeed.
Larry Beinhart is the author of Wag the Dog, The Librarian, and Fog Facts: Searching for Truth in the Land of Spin. All available at nationbooks.org. His new novel is: SALVATION BOULEVARD.
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