Boston Tea Party, 2008

How dare you throw that tea into Boston Harbor! Such is the anti-democratic arrogance of the fear-mongering pundits and politicians who tell us if we taxpayers don't instantly give the Wall Street banking bandits a $700-billion bailout, then we are destroying America. Instead of applauding representatives from both parties who, for once, heeded the public rather than the fat cats, the established pundits blasted those who dared get out of line.

It was a time for some of the best commentators to fail and, as much as I hate to admit it, for Lou Dobbs, and even Newt Gingrich, to shine. Dobbs called it correctly: The sky is not falling, there is time for reasoned debate, and why isn't the public being listened to? Gingrich put it best when he said short-circuiting serious congressional oversight over an enormous transfer of taxpayer dollars to an industry is "un-American." Others, with whom I typically am in far greater agreement, just rolled over to give the bankers what they demanded.

"When Madmen Reign" was the headline on a column by Bob Herbert in The New York Times that absolves the Democrats from any responsibility for the crisis despite a willingness of their party's leadership in the past to vote for key legislation proposed by what Herbert condemns as the "anti-regulation, free market zealots" of the Republican Party. Both parties betrayed the principles of a true free market--remember Adam Smith's invisible hand, under which no market player could unilaterally set price?--in favor of the concentrated power of oligopoly to control everything.

Those Republicans who dared to vote, this time, against the demands of the Wall Street power brokers were derided by New York Times conservative columnist David Brooks as engaging in the "Revolt of the Nihilists." While suddenly embracing President Franklin Roosevelt's New Deal as the positive alternative to nihilistic behavior, Brooks ignored Roosevelt's main achievement, which was to put the public interest before that of the Wall Street titans.

Wasn't it nihilistic when Congress, led by Republicans but supported by key Democrats, including then-President Bill Clinton, shredded the protections put into place by Roosevelt to control an ever-avaricious banking industry?

Anyone who has bothered to study that history knows that Sen. John McCain was deeply involved in the push for rampant deregulation, and his choice of former Senate Banking Committee Chairman Phil Gramm, the principal author of the decisive deregulation legislation, to co-chair the McCain presidential campaign mocks McCain's attempt to blame the crisis on everyone but himself.

The Democrats, however, also are culpable, and it was sickening to watch Clinton on "The Daily Show" getting away with blaming a crisis he helped create on overexcited home purchasers. I don't blame "Daily Show" host Jon Stewart for not knowing enough about the subject to challenge Clinton on his own fervent support of deregulation, but it is disappointing that Paul Krugman, an economist and one of the nation's sharpest commentators, should also miss that point. Indeed, in his column for The New York Times castigating McCain for his connection to Gramm, Krugman said voters should be reassured that Barack Obama has Clinton's treasury secretary, Robert Rubin, to turn to for advice on how to handle this mess.

Rubin, the former head of Goldman Sachs, worked as hard as Gramm to pass the legislation his Wall Street buddies wanted. Rubin then returned to Wall Street as a honcho at Citigroup, the first company to successfully exploit the new legislation's nefarious loopholes. As for his insight, it was as recently as January of this year that Rubin termed the financial meltdown a normal phase of the business cycle.

Back in the spring, two months after Rubin's "what, me worry?" silliness on the economy, Obama gave a brilliant speech on Wall Street's problems at the same venue, Manhattan's Cooper Union for the Advancement of Science and Art, in which he singled out as central to the problem the legislation that Rubin had gotten Clinton to sign.

Obama should stick with the wisdom of a community organizer from the tough side of Chicago: Fight the bankers who swindle unsuspecting homeowners, and restore the bailout provision that Democratic leaders had proposed but then abandoned--stopping the home foreclosures by empowering bankruptcy court judges to force a renegotiation of terms.

Any bailout worthy of support should put endangered homeowners first, not the bankers who swindled them.

Robert Scheer is author of a new book, "The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America."

Comments

[AbrahamSadegh]

Let's go back to when the initial request was made by Secretary Paulson for $700,000,000,000 --$700,000,000,000 divided by 300,000,000 Americans = $2,333.33 payment per individual --
in less than 1,000 words from the Legislature including the following section:

"Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

Absolutely incredible!

When Paulson rejected the Democrats' demand "for tighter regulations, corporate reforms or limits on executive compensation as part of the measure," Rep. Brad Sherman, D-California responded by saying, "He's doing his best to paint a picture of the sky falling, and then he says, because the sky's falling, you have to do it my way."

Regarding "fear-mongering," this Administration in general has turned FDR's immortal statement the "Only Thing We Have to Fear Is Fear Itself" on its head.

During the past eight years achieving policy objectives through fear has been this Administration"s hallmark.

Didn"t we start a needless, bloody, and costly war based on unfounded fears?

Have our fundamental liberties not been undermined based on fear that turns another immortal statement this time by Patrick Henry, "Give me liberty or give me death" also on its head?

Those three pages, however, have become part of the history in a manner for the Secretary to hopefully regret for as long as he lives for we are still a democracy.

[peterg76]

Consider the pundits' record. If they hate the Republicans, it can only be because they are doing something right, improbable as that is.

[Pdubya]

because there are only two parties on the Hill, with the exception of a few and they come in both colors: the complicit and the clueless. some voted "no" for political reasons (up for re-election). some voted "no" because they are starting to understand the connection between liberty and money.

"Allow me to issue and control a nation's money and I care not who writes its rules!" Amshell Rothschild

If we are to regulate anyone, it should be to audit the Fed, strip its authority, audit our gold reserves (if we have any left), the Presidential Working Group and the currency reserve.

no one is addressing that if we pump more fiat currency into the system that it will destroy our currency. Can anyone argue that we'd have more liberties with a destroyed currency?

Support HR 2755 and keep up the pressure. I will go without bread today to preserve my liberty tomorrow.

[frank1569]

Hey, Bob - did you not notice that the Dems "plan" did not include even the suggestion that, like, maybe we should act like responsible adults and actually cut and shift money from the $3 trillion Fed budget to off-set any Bank Robber Reward Act of 2008?

Does the Pentagon really need another $1 trillion, or could the get by on, say, only $800 billion? Do we really need all 700+ worldwide military bases and golf courses? Do we really need to keep spending over $50 billion/year on the "war on drugs?" Isn't it about time we shut down the off-shore "tax shelters" and close all loopholes-for-the-wealthy? Couldn't we demand oil companies cough up lease royalties?

When faced with new expenses, responsible adults must SACRIFICE in order to make ends meet - we can't just print more money and put it on the tab. Why aren't we demanding the same from our so-called leaders?

[TheHandyman]

Keep in mind all you Obamaites, that the Democratic Caucas was told that Obama wanted the very first bill passed. In spite of his words of change and hope Obama is another bought soul for the rich who have given him enough money to run for Pres. This bailout should not happen. I see no call for doing those things which worked for FDR and putting back into place those laws that both parties helped destroy which would have prevented this. Rich people gambled. Rich people lost. Now their lackeys in Congress want to give them the People's money so they not only do not loose money but will actually realize a better profit than they would have gotten anyway.

Isn't it ironic that there was no money for health care, education, infrastructure repair but suddenly there is a trillion dollars to save the rich and no help for people loosing homes. Practically everyone in Washington should be out on their asses. Time for a very large march on Washington.

And BTW, is there a candidate who has spoken out against this bailout, who predicted this out come 12 years ago, who isn't owned by wallstreet, k street, or the wealthy elite? Nader/Gonzales08!

[All in All]

I like Tea....How dare They trow it away!

[MilwaukeeDan]

Mr. Scheer, great post as always. You bring up Lou Dobbs and your admiration of his position on this issue. As a liberal, I hate to agree with Pat Buchanan, but if you read his commentary on this issue and foreign policy matters, he(and you) are right on the money. Americans need to open their eyes and ears and listen to as many voices as possible and then make up their minds. The MSM is trying to ram this bailout down the throats of the American people, they did the same with the Iraq war, where has that got us?

[MagisterLudi]

YES, to shielding mortgages. NO to shielding derivatives and institutions who issued them. NO to shielding European and Asian capital who invested in these instruments. NO to golden parachutes. NO to politicians who will vote to shield derivative issuing institutions. Inform your representatives and Presidential candidates of your stance. Take a stance for America, not your political candidate.

[technomist]

Great idea. The world doesn't owe America a living after all. She can stand on her own two feet and doesn't need friends or allies. Why not pay back all of the money the US Treasury has borrowed as well. Straight away. Or how about defaulting on the debt? There will be no need to borrow more in future, after all, when the USA live withing their means by raising taxes. And American companies don't need to have investors, do they? Nor do they need to have access to foreign markets.

[MagisterLudi]

Derivatives are high risk, high yield instruments. I lost on it ...too bad....tcaveat emptor,,, or is it caviar empty....

[ouroborous]

Look, I'm as skeptical as the next guy about this big Wall Street bailout. I'm no economist, and I don't know what will happen next if we don't do it. We might be in an emergency, and we might not.

See, "listening to the people" isn't always a great idea. Sometimes it is, sometimes no. People hate "pork" in the budget, but what is pork? Political "pork" in the budget is just looking out for your home district. Isn't that what the congresscritters are supposed to do?

See, we have a *representative* government, not a "mob rule." Part of the reason for that is simple: the mob tends to make poor choices, especially in times of crisis. I absolutely agree that we cannot simply fork over huge piles of cash to Wall Street with no conditions or strings attached, and no consequences for the people who got us into this mess. But also, let's not forget that the people who got us into this mess were the congresscritters themselves, through decades of laissez-faire, hands-off capitalism.

I think that knee-jerk reactions -- either to simply cave in and hand over almost a trillion dollars, or to go the opposite direction and do nothing because "hooray, the fatcats are failing" -- are rarely helpful. They may feel good for a second, but just like punching out your boss -- they're rarely a good idea in the long term.

[TheHandyman]

Would you take the same approach if they told you they were taking YOUR trillion dollars? I don't think so. It is obvious that you haven't gathered as much information or reasoned this one out as much as you should have. The "crisis" mode that has been adopted in trying to pass this quickly is to keep the People from finding out before it is too late what a ripoff this is, just like the invasion of Iraq!

[ouroborous]

But, in effect, they ARE taking MY trillion dollars. Or at least the portion of it that I'm paying for with taxes for the next 40 years or so.

Which is actually why I'm so cautious in my response. If you look at my posts you'll see that I have swung all over the road on this one (guess that makes me a "flip flopper" -- to me it just means I'm making up my mind), but I'm settling into the core position that we cannot really trust the guys in Washington. Yes, we can't trust them to take our trillion dollars without questioning the motives and following the money.

But we also can't necessarily trust them when they hoist the populist banner and scream "over my dead body!" I always remain skeptical of my congresscritters, for a reason: burned too many times.

[Lemeritus]

Good thoughts, ouroborous... measured and balanced.

[Theresa2]

I have been saying since this started that America was having a Boston Tea Party moment. Thanks for saying it publically. Forcing us to spend $700 billion tax dollars to bail out Wall Street while the folks on Main Street continue to lose our homes and jobs regardless of what the tax paying public wants is the ultimate taxation without representation. Didn't we fight the British for doing that? I'd love to stage a rally (get a million people at the Boston Harbor voicing our displeasure). Who's with me? Boston Tea Party at the harbor!

[Lemeritus]

Theresa2, no offense, but I think you're missing the point. The time for outrage may not have passed us by, but it is inappropriate for the situation we find ourselves facing. Without credit (a dampening of the LIBOR rates), we're going to lose a lot more of those Main Street homes and jobs (and with them, local tax bases that provide basic services).

[citipearl]

The sky wasn't falling when some of us were losing our homes, our jobs, were unable to cover medical costs, unable to keep up with costs of electricity, telephones, heat, gas -- when our salaries were lowered, benefits stripped. Some of us haven't been able to save for retirement while we were raising families, haven't had the benefit of a mortgage deduction, haven't had money to put in savings. We got behind on our bills and sold belongings, downsized our housing, cut back expenses, used credit to pay for food, gas and medical costs.

So, now the sky is falling because Wall Street and K Street are feeling the results of their failing investments. Cry me a river!

This "crisis" didn't happen all of a sudden -- and we should not expect it to be fixed in a jiffy either and especially not by those who crafted the failing policies in the first place (on both sides of the aisle). Take time to get this right so matters aren't made worse (if that's even possible).

[RS]

Since the title of this thread is the Boston Tea Party 2008, I can't help but remember the time (September 1998) I visited the Boston Tea Party site in downtown Boston and took part in the usual re-enactment of the night of December 16, 1773. Here is an excerpt of the dialogue:

COLONIST LEADER: DUMP THE TEA!

CROWD: INTO THE SEA!

COLONIST LEADER: DUMP THE TEA!

CROWD: INTO THE SEA!

(Colonist leader starts jogging towards the tea ship)

COLONIST LEADER: FOLLOW ME!

RS: INTO THE SEA! :-)

[MagisterLudi]

There's a law being passed that will require the banks to REFUSE to lend money to people who cannot afford the loan..... This is astonishing how broken the system is.

[MagisterLudi]

Barack Obama said that the Treasury and the Federal Reserve must receive "as broad authority as necessary" to restore stability to the financial system."
If Americans want well-running government, we MUST stop shielding politicians from culpability just because they're running for office at that time. "Obama should stick with the wisdom of a community organizer." OK, but he doesn't in this case! You know, It is possible to support a candidate without giving him a blank check.
Republicans did that with Bush and see what it got us. We MUST take a intellectually coherent stance and NOT indulge in verbal gymnastics to shield people for political reasons. Then and ONLY then government will be responsive to the people.

[SCG]

Call me old fashion, but I recall a time when people held up banks, not the other way around.