Subscribe to Common Dreams News Updates
Most Popular This Week
Popular content
Today's Top News
From Empire to Democracy
Let's not waste $700bn on a bail-out, but use 'big government' for what it's best at – shaping a society that is fair and peaceable
This current financial crisis is a major way-station on the way to the collapse of the American empire. The first important sign was 9/11, with the most heavily-armed nation in the world shown to be vulnerable to a handful of hijackers.
And now, another sign: both major parties rushing to get an agreement to spend $700bn of taxpayers' money to pour down the drain of huge financial institutions which are notable for two characteristics: incompetence and greed.
There is a much better solution to the current financial crisis. But it requires discarding what has been conventional "wisdom" for too long: that government intervention in the economy ("big government") must be avoided like the plague, because the "free market" will guide the economy towards growth and justice.
Let's face a historical truth: we have never had a "free market", we have always had government intervention in the economy, and indeed that intervention has been welcomed by the captains of finance and industry. They had no quarrel with "big government" when it served their needs.
It started way back, when the founding fathers met in Philadelphia in 1787 to draft the constitution. The first big bail-out was the decision of the new government to redeem for full value the almost worthless bonds held by speculators. And this role of big government, supporting the interests of the business classes, continued all through the nation's history.
The rationale for taking $700bn from the taxpayers to subsidise huge financial institutions is that somehow that wealth will trickle down to the people who need it. This has never worked.
The alternative is simple and powerful. Take that huge sum of money and give it directly to the people who need it. Let the government declare a moratorium on foreclosures and give aid to homeowners to help them pay off their mortgages. Create a federal jobs programme to guarantee work to people who want and need jobs and for whom "the free market" has not come through.
We have a historic and successful precedent. Roosevelt's New Deal put millions of people to work, rebuilding the nation's infrastructure, and, defying the cries of "socialism", established social security. That can be carried further, with "health security" - free health care - for all.
All that will take more than $700bn. But the money is there. In the $600bn for the military budget, once we decide we will no longer be a war-making nation. And in the swollen bank accounts of the super-rich, by taxing vigorously both their income and their wealth.
When the cry goes up, whether from Republicans or Democrats, that this must not be done because it is "big government", the citizenry should just laugh. And then agitate and organise on behalf of what the Declaration of Independence promised: that it is the responsibility of government to ensure the equal right of all to "life, liberty, and the pursuit of happiness".
Only such a bold approach can save the nation - not as an empire, but as a democracy.
- Posted in
131 Comments so far
Show AllAny bailout loan to Wall Street and Bad Banks from the taxpayers should be made with terms similar to the average working slave's interest on their credit card.
For example 23% interest, with a 39% rate interest and a large fee if the payment is one day late. Also, like the banks, the taxpayers should be able to change the terms whenever they want. If the terms are not met, the bank should be prevented from borrowing any more money because the taxpayers have collected a huge database with all the banks financial information, salaries of CEO's, personal shopping habits of their executive officers and past credit defaults.
If there are any delinquencies, the Insurance rates on the banks, and their Ceo's homes, yachts and cars should go up because as the insurance companies say - there is a correlation between bad credit and higher insurance claims.
Otherwise NO DEAL.
You know, these aren't bad suggestions!
I LIKE IT! I LIKE IT !!!
WOW , sense!!!!!!!
I agree with this completely. I had suggested something like this, but I didnt develop a plan. I'm not good at that stuff.
We just gave them the largest loan in history, at about 3%, from what I heard. I should definitely be adjustable.
39.99%. That's still better than some of them gave homeowners.
Ohio has a bill to limit "payday lenders". They can charge 350%!!!!!! Now, they want to limit it to , like, 39%. Even this lame proposal, is probably going to be defeated, because the payday lenders ( who act like they are "local" and employ all kinds of people), are saying how many "good jobs would be lost"
I cannot imagine that it is a "good" job.
The Senate tried this year with tobacco subsidies. Most tobaqcco workers are sharecroppers.I is NOTa "good job". It's slave labor. I did it one season.
If peope get desperate, they will fall for almost anything.
The "credit card" bill they passed about a week ago is SO lame!! In the backgroud I hear CNN actually suggeseting that older peole take out reverse mortgatges. That [peopel should "borrow from their 401ks aND iIRAs. Is this the best we can do??
Equity o y9ur home should not be forced to be a social safety net.
THANK YOU HOWARD ZINN. How right, how short, sweet, to the point and grounded in history. Everybody send this article via email to everybody you know.
Mr. Zinn, once again you speak the truth in a clear and concise manner. Thank you!
howard live long and prosper
seems like the sap club has got a couple of hundred million new members
cheers, b
Even some stock owning liberals I know are freaking out and hoping for a bailout soon.
Milton Friedman's neocons are firing up the Shock Doctrine here. 9/11 was just the beginning.
Mammon rules.
Maybe the parasites and predators on Wall Street inadvertently strenghtened the argument that we can no longer afford an empire. We are broke and are in no position to control the world and that should be obvious to even the most bamboozled rube.
.
http://www.commondreams.org/view/2008/09/25-1
by Ralph Nader
Congress needs to show some backbone before the federal government pours more money on the financial bonfire started by the arsonists on Wall Street.
1. Congress should hold a series of hearings and invite broad public comment on any proposed bailout. Congress is supposed to be a co-equal branch of our federal government. It needs to stop the stampede to give Bush a $700 billion check. Public hearings should be held to determine what alternatives might exist to the four-page proposal advanced by Treasury Secretary Henry M. Paulson.
2. Whatever is ultimately done, the bailout plan should not be insulated from judicial review. Remember there is a third co-equal branch of government - the judiciary. The judiciary does not need to review each buy-and-sell decision by the Treasury Department, but there should be some boundaries established to the Treasury Department's discretion, and judicial review is needed to ensure that unbridled discretion is not abused.
3. Sunlight is a good disinfectant. The bailout that is ultimately approved must provide for full and timely disclosure of all bailout details. This will discourage conflicts of interest and limit the potential of sweetheart deals.
4. Firms that accept government bailout monies must agree to disclose their transactions and be more honest in their accounting. They should agree to end off-the-books accounting maneuvers, for example.
5. Taxpayers must be protected by having a stake in any recovery. The bailout plan should provide opportunities for taxpayers to recoup funds that are made available to problem financial institutions or to benefit from the financial institutions' rising stock price and increased profitability after being bailed out.
6. The current so-called "regulators" cannot be trusted. The U.S. Government Accountability Office (GAO), "the investigative arm of Congress" and "the congressional watchdog," must regularly review the bailout. We cannot trust the financial "regulators," who allowed the slide into financial disaster, to manage the bailout without outside monitoring.
7. It is time to put the federal cop back on the financial services beat. Strong financial regulations and independent regulators are necessary to rebuild trust in our financial institutions and to prevent further squandering of our tax dollars. The Justice Department and the SEC also need to scrutinize the expanding mess with an eye to uncovering corporate crime and misdeeds. Major news outlets are reporting that the FBI is investigating American International Group, Fannie Mae, Freddie Mac, and Lehman Brothers.
8. Cap executive compensation and stop giving the Wall Street gamblers golden parachutes. The CEOs who have created the financial disaster should not be allowed to leave with millions in hand when so many pensioners and small shareholders are seeing their investments evaporate. The taxpayers are bailing out Wall Street so that the financial system continues to function, not to further enrich the CEOs and executives who created this mess.
9. Congress should pass the Financial Consumers' Information and Representation Act, to permit citizens to form a federally-chartered nonprofit membership organization to strengthen consumer representation in government proceedings that concern the financial services industry. As the savings and loan disasters of the 1980s and the Wall Street debacles of the last few years have demonstrated, there is an overriding need for consumers and taxpayers to have the organized means to enhance their influence on financial issues.
10. The repeal of the Glass-Steagall Act, separating traditional banks from investment banks, helped pave the way for the current disaster. It is time to re-regulate the financial sector. The current crisis is also leading to even further conglomeration and concentration in the financial sector. We must revive and apply antitrust principles, so that banking consumers can benefit from competition and taxpayers are less vulnerable to too-big-to-fail institutions, merging with each other to further concentration.
11. Congress should impose a securities and derivatives speculation tax. A tax on financial trading would slow down the churning of stocks and financial instruments, and could raise substantial monies to pay for the bailout.
12. Regulators should impose greater margin requirements, making speculators use more of their own money and diminishing reckless casino capitalism.
.
.
http://www.counterpunch.org/martens09302008.html
Congress Didn't Dare Say Yes
What Wall Street Hoped to Win
By PAM MARTENS
( about late CHANGES to the bill )
.
This article in CounterPunch was posted 9/30. Do we have the text of what was passed last night?
Go to Infowars.com
.
By PAM MARTENS
( about late CHANGES to the bill )
But the most duplicitous and frightening aspect of the plan, as always, was to found, buried in the back of the document, located there in the hopes everyone would have fallen asleep from the legalese before they made it that far. There’s the innocuous sounding Section 128, which was in both the original and amended versions, and says simply:
“Section 203 of the Financial Services Regulatory Relief Act of 2006 (12 U.S.C. 461 note) is amended by striking ‘October 1, 2011’ and inserting ‘October 1, 2008.’”
What would this effectively do? It was intended to speed up the enactment of this section of the law from 2011 to this week.
And what is the impact of the change in this law? (Take a moment to let this sink in.) This wonderful bipartisan bailout proposal, negotiated into the wee hours of the morning by sleep-deprived members of Congress was designed to come with a furtive Trojan Horse embedded by Wall Street lawyers. Banks already in trouble for lack of capital would get to hold as little as “zero” capital for transactions.
.
I see the world's most important country, if for no other reason, in terms of military destructive capacity (nothing to be proud of), having a tremendous show election to change from a teedledi-di to a twidledi-dum administration trying to perpetrate the same fears, the same delusions, and the same lack of leadership; a “Titanic” where captain and officers keep repeating “full steam ahead!” while raiding the strong box, and heading for the life rafts themselves, paying only lip service to a global sinking in terms of Climate Change, Millennium Goals, international security and global economic melt down, just to name a few holes in the hull.
A broken and corrupt administration
A broken and corrupt legislature
A broken and corrupt rule of law
A broken and corrupt financial and banking system
The USA has become a dying country politically and economically, destroying itself by its own people being seduced again and again into self serving delusions, grabbing for the quick and easy fix of least pain, with as much thought and wisdom as heroin junkies and so they are led to their demise by the usual crew of sociopaths that have always been around ready to take their places at the head table of the infinitely hungry. This was the culture this great country would export with it’s 700 to 800 military bases worldwide providing global reach to its global dominance.
What the credit squeeze really means is that the banks don’t even trust each others’ paper lies any more, and once the world “feels” broke enough to satisfy the big boys that are left, they can then buy it all back, and you for that matter, for just a song. But that is the next episode of lies and delusions…. Stay tuned!
.
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…
.
Hi Nannie,
Great posts and I applaud your efforts in trying to get people to know Nader for the better. Here's something else about Nader I think you will like a great deal. Hemp, a non-THC derivative from Cannabis, can get America off foreign oil and away from wars for oil.
Ralph Nader also support INDUSTRIAL HEMP, the same plant that was banned due to political and religious rightwing reasons. Ralph Nader taught me about hemp. Interestingly, Ron Paul also supports getting rid of the hemp ban.
http://www.votenader.org/media/2008/08/08/CorpCrimeWarOnDrugs/
At the same time, the Nader/Gonzalez campaign supports industrial hemp as a renewable resource with many important fuel, fiber, food, paper, energy and other uses.
Industrial hemp is a commercial crop grown for its seed and fiber and the products made from them. Industrial hemp is one of the longest and strongest fibers in the plant kingdom, and it has had thousands of uses over the centuries.
"In need of alternative crops and aware of the growing market for industrial hemp--particularly for bio-composite products such as automobile parts, farmers in the United States are forced to watch from the sidelines while Canadian, French and Chinese farmers grow the crop and American manufacturers import it from them," Nader said.
Federal legislators--except for Congressman Ron Paul and a few others--continue to ignore the issue of removing it from the DEA list. It is time to allow hemp agriculture, production and manufacturing in the United States.
The US right wing suppresses industrial hemp because it is the ideal material for local industrial/economic independence. By supporting industrial hemp, we are supporting the re-distribution of wealth, influence and power away from the elites and toward the people. It's the obvious thing to do.
Another repetitive political ad with nothing to do with the thread. How many does that make today Nannie?
.Speaking of repetitious and off the thread..look in a freaking mirror. I notice you've nothing to say about Obama pimping for Wall Street.....One can certainly support ones chosen candidate without the crap you constantly spew.
Look at it positively, behave yourself and I wont have to point out how stupid you sound.
.
We see things, not as they are, but as we are.
Anais Nin
When you anti-Obama loonies quit posting the same nonsense talking points in every thread, I'll stop calling you on it.
Could you please get someone to explain your Nin quote to you?
BTW Did you like the quote you won the other day?
.You own no mirrors I assume.
For every supposed slur against your superhero Obama there are equal stupidities posted about the candidacy of Ralph Nader. What you call nonsense talking points the sane might consider as intelligent and well considered plans of action. What you call a decent platform of your own choice for President some might see as a continuation of the status quo, a continued pandering to the corporations that rule this nation and an expansion of this stupid war to Pakistan.
A pity you are a narrow minded and intolerant jackass....but that isnt my fault.
As to that quote to which you refer, I havent a clue what you are talking about...I usually turbo scroll past your efforts anyway because, having fourteen grandkids I dont need any more childishness in my life.
.
We see things, not as they are, but as we are.
Anais Nin
I wish Zinn would run for president. Is he still backing Obama, does anyone know?
I, too, ran into liberal friends who felt the same--their IRAs had been cut to 15%. They were angry that I sen them emails to sign petititons against it.
What I dont belive they realize is that, in all likelihood, this will fail. This is not our "first bailout". We bailed out Bear Stearns, FM & FNM, -what good did ti do?
jp morgan is happy
And don't forget:
A broken and corrupt Dept of Justice
A broken and corrupt Main Stream Media
Howard Zinn is always right on the money.
Here's my 2 cents worth:
Fellow despairers of Bush/Palin/et.al. They are merely spokespeople of our chaotic times-- do not heap too much blame or time on them. Our true rulers are the Wall Street crowd. Let the market rip was their creed. And it did. "Markets work; government don't," was another of their slogans. The true villains are the Ponzi scheme alchemists who turned toxic junk mortgages into AAA rated securities. The rogues then leveraged each dollar of junk into 40-50 dollars of gold and along the way divvied up amongst themselves 50% of the profits (aside from their rather large salaries) their firms made. The leading rogues are the titans of Goldman-Sachs(Paulson, Corzine, Blankfien, Rubin, Thain.) These folks go back and forth into government and run the Treasury Department for Clinton or Bush or whoever happens to be president. I think their freewheeling days are over for a while—our 2nd Gilded Age (1980-2008) has just ended. Our only hope is to become a caring Scandinavian type country—our empire days are over.
Dr Wu, the last of the big-time thinkers
"Let's face a historical truth: we have never had a "free market", we have always had government intervention in the economy"
This is not quite accurate. It would be more accurate to say that we have never had a government that was truly a government. Our "government" has always been more of a facade for business. This distinction is important. Those who say that big government is wasteful, and that concerns such as health care, the military, etc. should be farmed out to more efficient private sectors, really need to stop and think! That big government is deeply in bed with those private sectors. It would be an interesting experiment to truly cleanse government of that self-serving stench. That would draw an entirely new type of human into the political arena; i.e. one whose ulterior motives are not based solely on what they can get. Our system is severely broken. The notion of 2 parties is a blatant farce. Behind the posturing, they are one and the same party: the corporate party.
A final note: This is not intended to equate Obama with McCain. Both are members of that party. But McCain has aligned himself with the most meglamaniacal and destructive administration in the history of this country. A voter has 3 options:
1. Vote for Nader, or someone outside the corporate party, and hope that this country survives long enough that in a near-future election such persons will win.
2. Vote for Obama, and hope that he will, at worst, stem the slide, or
3. Vote for McCain in the hope that the slide will rapidly result in a revolution (presuming the world has not been nuked out of its orbit)
Uh, this is today's article isn't it? Oct 2nd? Have we not read the headlines? The "deal" has pretty much gone through. I don't think they are accepting any more suggestions.
The House still has to vote on it. Some even say they might send it back to the Senate for changes.
We can try to make those "changes" (unlike the Senate Dems already did) in our favor.
Today is the most important day to contact Congressmen/women and let them know "Try again. Do better. Don't cave now."
Valleymom:yes. Make sure you ask everyone you know if they are registered. Many states, as Michael Moore just reminded, close registration on Oct.10. My rep has rec'd mail if it's a bad bill in the House and he again votes "yes" (like first vote last Mon.), after voting for Obama for Pres., many will leave the line for House Rep. empty on ballot as statement in our district. (In NYC, it's about primaries for Dems. Once an office below Pres. wins in NYC in Dem.primary, it's a "win" in Nov.)
Should people register to vote, if they are not voting for Barack Obama?
If the Dems wanted to win more seats this November, they woud have done well to listen to the public over last night's fiasco. My hope of them getting a larger majority, just to get some things done, is dashed.
After "Sicko", Mooer said he would not be supporting anyone who didnt support natl healht care. What gives? It makes himpopular or what?
"after voting for Obama for Pres"
Your real intent. Obama is the biggest cheerleader for this crap legislation... perhaps even more than CheneyOilCo anf their monkeypuppet.
Obama doesn't care about us... he only wants power, and so what if the $700 billion campaign contribution isn't quite "voluntary".
He is a fraud.
It's not over in the House. And we do get to vote and send a message to our elected officials in Nov. And work between now and next election for ones we don't like.
I have read, and many times over----like any truly good book(s)--Mr. Zinns work.
His observations are clear and undeniably correct.
To borrow a phrase from my tribal ancestors---"His heart is pure and his intentions are honorable--- his words are true and like the rays of the Sun peaking through the clouds---can be seen (heard) from far away".
The American people are capable of the most terrible acts---while at the same time--just as capable of tremendous good. Their history will show that when they have taken an active roll in their own government---their progress was assured, even though the "government got bigger". Social changes made during the last great "collapse" remained potent until the people gave control of so much to just a few--- on the governmental level the financial industry and even the social level. The Republican overhaul of the "welfare system" negatively impacted the children more than the adults, and pushed back social justice in the process being just one example.
Fewer "regulations" in the Financial Industry has led to the current malady, and this was a "rallying call for the conservative element"..
Unqualified people are elected to high office because they profess a certain religious belief in most cases more than any other qualification. GW Bush elected to two terms as Gov. of Texas professed to having been "bible believing born again" AND had read the Bible through from cover to cover-----very few qualifications were questioned past the above. Now he has shown himself to be a world class criminal and the first president to have earned this distinction.
GW Bush is also a member of that same social class that has been in control of so much wealth and power for more than a century; his "grave robber" Grand Father Prescott Bush was an early supporter of the Nazi party, and made himself wealthy in the process.
One could list the problems in as many volumes as required but the only solution to those problems are found in a Democracy---the USA has not been one for some time now.
There is always hope for tomorrow.
http://socialistparty-usa.org/statements/nobailout0908.html
Very good points. The link above has a solution we can live with, live better , and be proud of.
Native Son:that's a powerful comment. Thank you. Howard Zinn would like it,too.
Dubya's shock doctrine has repeatedly succeeded in suckering "liberals" and "conservatives". Prior to the current "crisis" , they created an oil crisis in July that "could only be solved by approving more offshore drilling". During the subsequent months, although oil prices dropped dramatically with no government intervention, 80% of the US electorate pushed their elected representatives to approve more drilling.
Fool me once, shame on you, fool me twice, shame on me.
The US electorate is way past twice on this one.
Sorry Howared, Wall Street is not incompetent. Had they been incompetent they would not have purchased the Adminstrative, Legislative and Judicial branches of the US Gov.
Anything they undertake cannot be considered incompetent because they always have a safety net: a government that is always willing to throw them a taxpayer-funded lifeline.
Yes they are incompetent because they crashed the system, or no they are not because, like in the 30's, perhaps a designer crash to buy it back at discount at the end of the series of "shocks" and wars??
LOVING YOU HOWARD,
I personally WANT the biggest crash possible, level the field. and if there are mega rich scumbags left standing ? NICE!
We are going to NEED them to pay for lunch, and some beautiful new parks and architecture.
Even if we go openly TOTALITARIAN, We will sell it all corny and jingo.
Let the FLIBBERDYGIBBET LEAD US TO GLORY.
We are every one wee little flibberty floo! AMerica is about lies and nosense! The whole world knows it.
remember tristan tzara, the dadaist prophet, reason has failed, abandon reason, oops we did already!
ABANDON OUR CHILDREN! (oh, we did that too!)
Abandon OURSELVES! Lets be free lovi
...and from Democracy to Chaos.
- Giovanni Battista Vico (1668-1744)
America's institutions are maimed and murdered - the only way to rebirth is through death.
I keep listening to right-wing commentators talk about their "anger" at the unfairness of helping those who are having trouble paying their mortgages. It's unfair to those who have been paying their mortgages, they say. I guess it's also unfair to send a public ambulance to help someone who fell with a heart attack crossing the street. It's unfair to those who didn't fall. What a nasty brutish group they are who have been dominating our country. I am ashamed.
Well, their fears should be alleviated after last night's debacle.
Loopless: we can fight back:letters noise, votes.
Do you think it would be unfair to bail out a gambler who lost $100,000 playing blackjack ? I do.
I really want to see some stats ... how many foreclosures occurred for people who were actually living in the homes they mortgaged and they were homes that they could reasonably afford ? How many occurred for speculators and flippers who just wanted to make some $$ ? It's the latter case that I don't want to help.
As for your ambulance analogy ... how about a person who willfully engages in some stunt and ends up getting hurt ? That person should pay for the ambulance, IMO.
http://en.wikipedia.org/wiki/Phillip_E._Hill,_Sr.
http://www.nantucketindependent.com/news/2007/1010/Other_news/008.html
http://www.banking.state.ny.us/pr080422.pdfhttp://www.state.ny.us/governor/press/press_0501081.html
http://mortgageblues.us/news/category/statistics/http://www.democracynow.org/features/subprime_mortgage_crisis
Here is some. Saying that we cannot tell the victims from the flippers is just an excuse to do nothing.
So far, the govt will let you re-finance , if it is your second, third, or fourth house. Or yacht.
In light of the Wall St. crap, I dont think that homeowners are asking for much.
Use the money they are giving to Wall St. (and gettin from K Str.) to refinance these mortgages.
Uh, your first, third, and last links lead to nothingness. The Nantucket article applied only to Nantucket. (I used to live in Boston so I'm well aware of Nantucket, it cannot be compared to the US in general !)
Care to try again with some substantiating info ?
I must not know how to post links correctly. That dose not make me wrong.
The point of the Nantucket article, is that, it did NOT effect rich communities.
The first one disappeared. I dont know why.
The other two look like what I posted.
If you dont live in teh rust belt, you have no idea what it has done to urban communities. And, I suspect, maybe you dont care.
Can someone else, with a newer pc and some pc knowledge back me up that most of thsee foreclosures are not for investment properties?