In yesterday's post on Sarah Palin and Hugo Chavez, I implied that redistribution of wealth runs contrary to Republican principles. As the past few days have shown, there's one massive exception to that: when redistribution all goes up the food chain instead of down it.
The whole mess is complicated and I don't pretend to understand all of it. Basically, though, it's clear that Wall Street fat cats gambled with their money, and those of us who are very small kittens by comparison will now be forced to cover their losses. Scandalously, the Bush Administration's plan does not provide for any oversight, re-regulation of the banking industry, or restrictions on the compensation of executives in these high-flying financial companies.
We do need some sort of a bailout, I think, because the alternative would risk economic collapse. But any bailout should enforce accountability on these people who have not shown themselves to be trustworthy. Also, if we taxpayers are forced to make what amounts to a massive involuntary investment in these highly risky companies, we should at least gain a serious equity stake in return! That is, as investors we should partake in any future profits.
Ideally, the Wall Street bailout should be coupled with relief for homeowners facing foreclosure. I don't know if this is politically feasible right now, but justice demands it. So does economic good sense: Our economy depends, after all, on consumers being financially healthy enough to actually consume.
Glenn Greenwald has a great analysis that puts the radical magnitude of the problem - and its proposed solution - into perspective.
The headline in the largest Brazilian newspaper this week was: "Capitalist Socialism??" and articles all week have questioned -- with alarm -- whether what the U.S. Government did has just radically and permanently altered the world economic system and ushered in some perverse form of "socialism" where industries are nationalized and massive debt imposed on workers in order to protect the wealthiest. If Latin America is shocked at the degree of nationalization and government-mandated transfer of wealth, that is a pretty compelling reflection of how extreme -- unprecedented -- it all is.Yeah. Funny how it's only "socialism" when the little guys are getting help. This sort of redistribution? It's just hard-nosed capitalism. Help me out - can somebody please explain that to me again??
The Democrats are as panicked as anyone about this, and I'm afraid they are going to just go along with the bailout sans accountability unless we hold their feet to the fire. We're talking about at least $700 billion and maybe upwards of a trillion dollars that our children and grandchildren will still be financing. It's time for the Democrats to grow a pair.
I don't often urge my readers to take some specific political action, but I really think this warrants a call to your representatives in Washington. I called Senators Sherrod Brown and George Voinivich today, along with Rep. Charlie Wilson. If you don't know your representatives' numbers, the Capitol switchboard is at (202) 224- 3121. Please let me know in comments what you think ought to be done about the mess - and what you're doing about it.
Update, 9/24/08: Here's another reason why we can't give the fat cats a blank check without any accountability. The FBI is investigating AIG, Fannie Mae, Freddie Mac, and Lehmann Brothers on possible fraud charges.