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TechnoratiThey Stood Up to the Banks
The American people stood up, and the bailout package went down.
Like other moments in U.S. history when the robber barons or the big banks went too far, the American people reined them in this week, refusing to hand over billions of dollars that would put themselves and their children and grandchildren into debt to pay off the collapsing fortunes of some over-sized and under-regulated banks. In the face of predictions of economic calamity, they said "no" to more help for the super-rich. They told their representatives in Washington they'd had enough.
This group of people from across the red-blue spectrum is exactly the group we feature in the current issue of YES! magazine, Purple America.
They are being squeezed by sharply higher costs for the basics, like medical care, food, energy, and housing. They are not getting a share of their increasing productivity on the job, so their wages have stagnated. And as good-paying jobs have fled abroad, many have struggled just to keep a roof over their heads. Those who were lucky enough not be be hit by big medical bills or be scammed by sub-prime mortgage lenders survived by working longer hours, having more members of the household work, and going deeper into debt.
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| Why the Middle Class Got Stuck: Surging Prices, Spiralling Debt | |
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So what now? The market Tuesday recovered much of Monday's 777 point drop. Most world markets held steady over night. How bad would it be to just say "no" to the big banks?
Maybe not so bad at all. The 200 economists who signed a letter against the deal say we've got time to think before we jump. Dean Baker of the Center for Economic Policy and Research says in a recent op-ed that the banks are essentially holding a gun to their own heads and saying, "Bail us out or we pull the trigger." The immediate crisis, according to Baker, centers on the fact that the banks don't trust each other, so they are refusing to loan money to each other.
But there are other ways to resolve this besides throwing the cash equivalent of 5 percent of the U.S. economy their way.
The U.S. Treasury, the Federal Reserve, and the banks themselves have a variety of tools available to help make it through this immediate crisis without taxpayers borrowing billions more from China and the Middle East. In a Washingtonpost.com op-ed, James K. Galbraith shows how we could use these tools.
In fact, as Baker points out, if the U.S. goes that much further in the hole we may create far more serious problems. Where, for example, will we find the money to cope with the next crisis-many analysts believe the credit card companies will be the next ones lining up for a bail out. How much further can the U.S. government go into debt before our credit rating and the value of the dollar go down the toilet?
And where will we get the money to stimulate the real economy, the economy of Main Street, of real goods and services that meet real needs and provide regular people with jobs? This real economy is in trouble because real Americans, the ones being squeezed, are running out of purchasing power and options.
It's important to be clear that Wall Street is not the economy. In fact, as author and YES! board chair David Korten points out in his column, Main Street Before Wall Street, Wall Street has been preying on the real economy of Main Street. The speculative financial sector has grown many times larger than the real economy through exotic financial instruments that create new "assets" out of nearly nothing, which are then leveraged and traded to create still more new assets. If this was just a casino outside town, then by all means, let them play. When they lose their chips on bad debts, let them pick up the pieces. But of course the speculative money games are built on real assets, like mortgages and loans to businesses, and this process undermines real jobs, real communities, and (this part usually gets left out) real ecosystems.
The trouble with the bailout package, besides its breathtaking size and poor overall design, is that it asks those in the real economy-now and indefinitely into the future-to once again prop up the speculative system that is concentrating wealth and power at the top. So what do we do instead of a bailout? Three principles proposed by the Institute for Policy Studies stand out as good guidelines:
- "Wall Street and speculators should pay now for the mess they created." The only way the American people will accept government involvement is if Wall Street and those who have benefited from the wild speculative blow-out now foot the bill.
- "Instead of borrowing from the super-wealthy beneficiaries of the casino economy, we should tax them." This is not only fair, it also begins to address the structural causes of the breakdown. If every stock and currency trade carried a small tax, it would discourage speculation, and turn the market back towards its original purpose-providing capital for the production of goods and services in the real economy. Radio host and author Thom Hartmann has a great piece on this.
- "Any bailout should stimulate the real economy with investments in Main Street, not just Wall Street." And to take that one step further, our taxpayer investments should build a sustainable foundation of a 21st century economy. Such an economy will have to be climate friendly with investments in smart energy generation and efficiency and job training for green-collar employment. Anything less, and we'll simply be putting off more crises for the not-so-distant future.
The Institute for Policy Studies is promoting these principles among lawmakers, along with specific ways of implementing them.
As investment advisor Leslie Christian says in a column on the YES! website, we can also in our own lives support the real economy by supporting the local economy-local sustainable businesses, farms, banks and credit unions, that exist to serve real people within the constraints of local ecosystems.
22 Comments so far
Show AllIt was a sad night in the Senate. Seventy four, know-it-all, arrogant Senators disregarded the wisdom of 200 economists from prestigious universities and said to hell with the opinions of the American public. It passed the bailout bill as presented by the Administration with a few tweaks; but generally, the bill designed by the banking industry and for the banking industry remained basically intact. No wonder Americans are completely frustrated over what has happened to our, so called, democracy.
All the more reason to press on House members to take this pig-with-lipstick and vote it down.
Voting "no" doesn't mean do nothing, it means do better. Call them now (the websites are choking on the volume, calling the local offices is more likely to get a person who will record your position.)
There is better legislation (not perfect, just better) being written now. Congress needs to give it a chance.
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Nader says...
"Wake up Americans! Cut the crap and take over."
VOTE NADER/GONZALEZ 2008… You’ll be glad you did and so will I…
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I don't think Congress listened to the people. Well, I don't think Congress voted against the bailout because 'the people' were against it. I think Congress voted against this because everyone in the House is up for reelection in a few weeks. If this had come up in December, the House would not have listened to 'the people'.
As others have pointed out, 'the people' want to get out of Iraq and 'the people' want universal health care and 'the people' want to restore tax cuts for the rich and 'the people' want to diminish the stranglehold of corporate power and 'the people' want their elected representatives to work for 'the people' instead of working to enrich themselves.
Nobody in power is listening to 'the people'.
Some House representatives voted against the bailout because they want to keep their jobs and their jobs are on the line in November. They don't care about the people, Sarah. Give that fantasy up.
The only bow to those who are against this plan are tax cuts to the Middle Class as an offering to all the median income schmucks like me whom none of the banking or bureaucratic class thinks can figure out we're being duped and will continue being duped by these string-of-pearl speaker-of-the-house wealthy incestuous politico-finance tycoons whores and their plants in the halls of congress? How the f--k do they think this kind of debt is going to be paid for?
You notice even many of the 'no' voters are being careful not to offer alternative plans that include direct and indirect relief to people like you and me.... roads, railroads, schools, small business loans, alternative energy development, parks and public lands improvements (just to catch up with what has been savagely ignored since the Reagan years) mortgage relief, health care, job training and higher education grants (what would even half of that $700b do for this stuff? What kind of real boost to the economy would that create?) what kind of serfs do they take us for?
I suggest we all start mass public readings of Ionesco's "Rhinoceros" to study up as we watch our neighbors, representatives and friends one by one give up the resistance and applaud this final failure of the two party party. And then we can sing old Depression songs around the railroad yard fires as we rub our cold hands together and spit at the coverage of the next inauguration.
svg writes:
"the American people reined them in this week, refusing to hand over billions of dollars that would put themselves and their children and grandchildren into debt to pay off the collapsing fortunes of some over-sized and under-regulated banks. In the face of predictions of economic calamity, they said "no" to more help for the super-rich. They told their representatives in Washington they'd had enough."
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That is patronizing spittle, being played for all it's worth, and in the end it will prove to have sparked little more than token gestures of good will made for show, while real solutions still won't have been forthcoming. In the end, 'THE' bill will be passed, and it will inevitably prove to be more of the same ole same ole. And, in spite of any seemingly beneficial laws or regulations that may actually emerge as a result, we should know too well by now how self-serving interests will be right back lobbying to further their lust the very next day, even during the process itself. Whatever good might result here and now will become corroded and compromised in relatively short order. This will be no "New Deal". "They" will throw you a bone, walk away, and continue on as the lords of our money.
Indeed, any tactically savvy person should understand how the original bill proposal was intentionally crafted to seem extreme, to then reach a compromise still very beneficial to "them."
The final bill that emerges will not address the foreign policy, health care, taxation, military, education, environment, energy, justice or special interest issues that necessarily factor together to affect the overall quality of life and economic well-being of our country and citizenship. The bill will be a band-aid in lieu of corrective surgery. It will be a hasty casual lick and promise instead of a substantive commitment. We will still have misguided investment, self-serving corporate interests, uninformed consumers, and paid-for politics.
Some will say it is a starting point, and to them I will say we have had endless starting points. This is a mirage in the desert that for a moment gives hope and fuels adrenaline into the blood stream, until the reality sets in and you come to realize you were head-faked once again.
This is far from over, and we are very far from a sustainable victory of the people, by the people, for the people. Very far.
Don't let up now. Don't be suckered into thinking we have achieved a real victory. Hell, the battle hasn't even actually begun. Don't be fooled again.
It was grass roots pressure that informed their votes? Then we are we still at war? I don't recall millions of people marching all over the world in protest of this bailout. If grassroots pressure mattered, Bush would be impeached.
Marching? rarely noticed these days. But obviously there has been a lot of contact and complaints to Congress. So far they have listened.
Hey, its a start.
So what, you want to toss away one victory because we haven't won everything?
The good news is that the American people are getting pissed off and letting Congress know about it.
And, politics usually lives on momentum. Lets just say that this continues, and the American people get the House to stand its ground and hold on to this victory. That teaches the American people that they can have some power and can win sometimes. Then you might see that power go back into the fight against the war.
Or, lets say the House doesn't stand its ground and we lose. Well, if nothing else then there are a lot of pissed off voters out there. And for the first time, maybe they can be convinced to vote for someone other than the Democrats and the Republicans. Maybe that's the beginning we've been waiting for.
Especially with the specticle of the Dem leadership leading the charge for Wall St. on this one. And with Mr. Change Obama up there pleading that we don't change a thing and continue to give the country to Wall St for free. Maybe that's the wake up call that's needed to shatter the illusion that the Democrats are in any way an opposition.
The old line from the Clash comes to mind ..."Anger can be power, know that you can use it".
So, why are people out there trying to be depressing and keep people from realizing that just maybe this is the flash of national anger that we've been waiting for. And to keep us from trying to use it?
There seems to be a lot of very defeatist people out here who just constantly post message saying we are doomed, we are helpless, we can't do anything ... and in this case trying to be very negative about the first victory of any sort that we've seen in awhile. Why?
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
Keep up the pressure. Keep those phone lines jammed, send faxes and emails by the "truckload".
There are several other plans that would get us out of this mess far more cheaply - and some could even make a profit.
Help Main Street, not Wall Street.
That's the most important message of the day.
Make a LOT of noise. Make that noise right now. Call, write, email. If you can get to a Congresscritter's office and try to get in to talk to the staff, do it. If you can get there and protest outside, do it.
Big money is going to be applying a lot of pressure looking for the 15 or so votes they need to switch. We need to be making a massive amount of noise of our own and we need to be doing it NOW!
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
Why have so many made similar comments, as though the fight was over?
The so-called "bail-out" will pass, now that the Dems have caved per usual to the demands of the "nays," and it will still be the heist of the century.
The last thing on earth the powers that be want is for the people to be energized and to realize that they want power.
There are consultants out there who advertise guerrilla marketing where you can pay them to post messages on blogs for you.
Now, I have no idea if any particular poster out here is deliberately trying to be constantly negative in order to try to depress and disuade other CD readers who would want to work and fight for change. The left also always seems to have its share of very negative people who do nothing but complain and criticize anyone who is doing anything.
But, then again, I wouldn't be surprised at all to find out someday in the future that there was a deliberate campaign to most very negative and depressing messages on forums like this simply to try to damp down any movement for change that might come from people gathering on sites like this. I do know I see a lot of messages that seem designed to divert conversation away from the topics in the article and any constructive response, and a lot of very negative and depressing messages along the lines of "we are all doomed, just give up."
Ignore them. Start fighting. Fight anyway, anytime you can. Fight for as long as you can fight. Then fight some more. For virtually every movement that's ever taken on power and won, there have been times in its history where all seemed hopeless. The key was that people kept on fighting anyways. Fight and keep fighting!
And vote Nader!
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
And we the people can do it too ! It is time to bring back our troops from Iraq, Afghanistan, and all US military bases all over the world and get them ready to SHOOT DOWN WALLSTREET ! Plus, it is high time everyone on Main Street were armed with guns and bullets and ready to SHOOT DOWN WALLSTREET ! GIDDYUP SOLDIERS !!!
"Now, in spite of having no national party and no big popular spokesperson to bring them together, these American populists have said enough!"
Easy there Sarah. Let's not confuse the deregulating politicians who caused the crisis and are throwing their hero Bush under the bus to save their careers with real populists.
One thing I see here fairly regularly is people thinking of politics only in very crude and simplistic stereotypes. This is pretty typical. Repulicans are bad. Not much thinking beyond that.
Maybe its because I'm older than some. Maybe its because I grew up in a very conservative area, but to me it makes a lot of sense that there is a Republican revolt against this.
Old school Republicans are very fiscally conservative. They don't like borrowing money. They don't like an economy that runs deficits. If you listen closely, there's been rumblings in the Republican base against Bush for exactly this thing for years.
Old school Republicans were always 'Main Street Republicans' and not 'Wall Street Republicans'. There was always a lot of tension in that party between the more populist wing of the party and the elites on Wall Street. Or the same with main street and the Ivy League types. Go listen to Richard Nixon's White House tapes for lots of this. He hated the Ivy Leaguers and Wall Street types.
The true Free Market business types strongly believe that the government should not bailout failing businesses. They feel that if a business makes bad decisions, they should pay the price. And that people who invested in a business that makes bad decisions should pay the price. Go back to the debates over earlier bailouts to find lots of this. The debate over the bailout of Chrysler comes to mind.
The key thing to know is that the same thing that has been going on in the Democratic Party has also been going on in the Republican party. Both parties have moved to serve big money. And in doing so, both parties have abandoned their base and the principles that their base believes in.
So, there have been a lot of rumblings from the Republican base of late. The whole Ron Paul campaign was representative of this if people pay any attention. This is very important to realize because we have potential allies there. There are people on the right who are as upset at our corrupt government and our government of the corporation, by the corporation and for the corporation as there are people on the left upset with this. There are some very natural alliances that could be formed that would dramatically improve our chances of wining some of these fights if we only had enough sense to form those alliances.
So, stop thinking in terms of simple stereotypes. Stop with the simple little bumper-sticker length slams of the people on the right that just helped us win a fight that we could not have won on our own. Open your eyes just a little bit to what's possible when the opposition on the right joins with the opposition on the left to fight and defeat corporate power.
The opportunity is there. But we have to abandon this sort of thinking.
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"To know, and not to do, is not to know"
www.samsonsworld.blogspot.com
"Any bailout should stimulate the real economy with investments in Main Street, not just Wall Street.""
Why??? Why go through this exercise of analysis and insight... and then at the very end, provide a back-door for the corporatists to sneak in?
We all know that any bailout will at best, only provide lip service for "Main Street".
Even if we get it in writing, be assured that Main Street will get nothing but trash. Hell, these corporatists don't even respect the Constitution. Other than pure self-delusion, what leads anyone to believe that these criminals would respect provisions that address the needs of Americans? It's just absurd to expect that to happen.
Just say NO! Do not give them an inch. They will screw us and laugh all the way to corporate headquarters. Let them fail. Teach them what "free market economics" means. Do not submit to a forced "dividend payout" that burdens the lower classes.
The bailout is nothing but a class warfare tactic with taxpayers forcibly shipped to the "front lines" to fight each other. Keep the lying Wall Street corporatists in your sights.
Now squeeze.
Amen,,,,, Democratic party is just about as bad as the Republican. The last eight years has shown us their true idientities, their masks have been pulled off. We need a new deal!
Coffeelover,,,,,,,,
Can we please stop labeling them "middle class?" That is a mythical term invented by those whom are controlling corporations and Wall Street. Most people who label themselves middle class actually live at or below the "poverty line." We should be trying to fix that instead of bailing out corporations, CEOs, and politicians who receive funding from the former.
The Institute for Policy Studies suggestions seem to me to be quite reasonable. Keep up the pressure on Congress. Please!
ENOUGH IS ENOUGH!! Seriously, Democrats: it's time to LET GO of this evil party and start supporting all independent progressive candidates and/or parties. We can get what we want and need and help each other, but we have to STOP supporting this nonsensical Democratic party.