Seven Simple Reasons To Oppose The Bailout
I’m not going to waste time with a preface. Let’s just get right into why this is a massively bad decision.
No oversight. The Bush administration is asking Congress to hand it a blank check for $700 billion without any controls or strings attached. This is the same corrupt regime that has wasted uncountable billions in Iraq through fraud, graft, corruption, and simple wasteful spending on unnecessary projects. The same regime that demanded vast new powers of surveillance with only the most minimal oversight to ensure that it is not abused. Do you really think Paulson is going to tell the truth in those reports to Congress, or that Congress will do anything about it if he lies?
Unchecked power. If this bill passes as written, it will make Henry Paulson the most powerful man in America, with incredible leverage to utilize trillions of dollars’ worth of capital as he sees fit. As an unelected official not chosen by the people, do you trust him to look out for your interests?
Foreign bank bailouts. Henry Paulson is on record as saying that Americans are too stupid to care if he uses our money to prop up banks based outside of the United States (Seriously, go read this article--that’s essentially what he says.) If that doesn’t set my right-wing friends in firm opposition to this plan, I don’t know what will.
No protections for homeowners or curbs on CEO pay. Paulson is actively resisting any attempt to add punitive or regulatory measures to the package, including foreclosure protections, additional economic stimulus packages, or stronger oversight of the financial markets to prevent something like this from happening again. This is a life raft to the very people who got us into this mess, mortgaging our financial futures to do so.
Rewarding irresponsibility. This is a clear message to Wall Street and the global markets that it’s completely okay to engage in ever-more-complex and opaque financial tomfoolery, because the government will bail you out when it gets rough. No consequences, no responsibility, no real fear of the vicissitudes of capitalism. In a true free market, banks that overleveraged themselves with crappy loans and nonsensical derivatives would collapse. It would be painful and turbulent, but is that really worse than enabling them to keep on going with the same awful practices that have left thousands of people with homes worth less than what they paid for them, with 401ks barely performing at a value worth the investment, and a dollar that can’t buy a fraction of what it used to? Again, tell your right-wing friends that this is as blatant an example of ignoring personal accountability as there ever has been.
Constraining our future. As I said yesterday, not only will this bailout deny us access to capital that we could have used for countless new projects and investments that we desperately need, but it will further constrain us from engaging in any sort of new infrastructure building or real innovation to put this country back on track. While Obama’s administration may be able to push through legislation that amends or changes existing laws, the real big-ticket items–climate change mobilization, national health care, broadband investment–will not happen without capital to fund them. This is a political time bomb designed to sabotage any attempt Obama will make at real change by hamstringing him financially until the Republicans move to take back Congress in 2010. It’s no coincidence that Paulson’s package is on a two-year timeframe, after all.
It won’t solve anything. Most of all, this bill is a Band-Aid on cancer. As this excellent article by Joshua Holland details, our financial structure and system is fundamentally sick, crippled, and retooled to act solely as a process to transfer money from the many to the few. Pumping more capital into it is like giving a blood transfusion to someone who’s undergoing heart surgery and is being kept alive by machines–it’ll help keep them alive, but it won’t fix the problem at hand.
So there you have it. Pass these points around. Call your representatives, call the media, tell your friends and family. Let them know that this bailout needs to be opposed until we come back with a better plan that protects individual Americans and doesn’t reward the wealthy for their mistakes. If you want a preview of a better plan, Ian Welsh has some thoughts on that front.
September 22nd, 2008 at 4:58 pm
I agree with you almost 100%, and will urge my representatives to see the light. The one area I partly disagree, is that while this will make Paulson way too powerful, he wasn’t calling Americans stupid, he said it was meaningless to them… and it probably is. If your house gets put into Foreclosure, or otherwise is imperilled because a bank fails, will you care if the bank has its HQ in NY or Toronto or Hong Kong? I don’t think I would.
The day “American” corporations start thinking they have a responsibility to the American people will be when I start giving “corporate entities” citizenship again in my mind. If they care about anyone — and it seems doubtful — it would be to their investors only, and at this point their investors are as likely as not foreigners.
September 22nd, 2008 at 5:19 pm
Here’s what I have sent thus far:
Dear Senator/Representative (as appropriate):
Despite the media outcries of alarm and pressure from the administration for a rash decision, I urge you emphatically to resist any Bailout legislation that places unregulated and unfettered control over billions of dollars to make whatever decisions they deem fit into the hands of people, no matter how intelligent and hardwaorking, who have never been elected by the people to wield such authority. Henry Paulson and Ben Bernanke are NOT my elected representatives.
Two years and virtually unlimited control of purse strings (when you get to that many billions it may as well be) would be downright shirking your responsibilities as a United States Senator/Representative.
We were told, not that many years ago, that the sky was falling, and we needed to sign over unconditional authority to the better judgment of the admininistration. What was that again? Oh yes, the imminent danger of WMDs in Iraq, and look where that got us now?
I understand this is an election cycle and all, but I really need you to take a stand on this one. If the economy is really THAT on the verge of collapse, after the administration has already made tens or possibly hundreds of billions of dollars worth of bailouts – Bear Sterns, Fannie Mae, Freddie Mac, AIG… then is saying “ah the heck with it” and just giving them the keys and wishing them good luck going to “save us?” I think not. Stand your ground and insist on honest, sensible legislation that preserves the authority and constitutionally mandated responsibility of the Legislature.
September 22nd, 2008 at 5:33 pm
[...] flaws I find in this proposal better than my friend and consumer advocate Boztopia. I shamelessly rip this off from his blog, because I could not possibly say it better [...]
September 22nd, 2008 at 7:17 pm
This morning I called my state senators and my congressman. One of the people I spoke with said they were getting tons of calls. Most of the calls were against the bailout!!! So take a clue from Nicholas – contact the people who are going to vote on this. Let them know where you stand!!!
September 22nd, 2008 at 7:20 pm
Nick,
Thank you for doing that, my friend. Let’s hope they listen and pay heed.
Marsha,
Indeed! Go get ‘em. Tell the world, because we need to hear it.
September 23rd, 2008 at 10:32 pm
Thanks for the form letter. I used it to mail my direct Congresspeople and select others.
I am against bailing them out. Let there be a recession/depression. I wasn’t the one who helped contribute to this nightmare. I didn’t buy a house I couldn’t afford and I also wasn’t a fatcat CEO or the related. I actually live within my means-imagine that!
I’m opposed to giving a blank check to anyone in government period. It’s a very bad idea.
Kat
September 24th, 2008 at 5:30 am
Actually Bush has been warning congress and pushing them to do something about Fannie and Freddie since 2003 and it’s easily researched. Franklin Raines, credit default swaps (Credit Default Swaps: The Next Crisis? March 17, 2008 Time Magazine), and more reasons below all contributed to “our” bailout. Credit-default swaps are extremely risky because those trading them are not required to have full collateral behind them. This is something Congress should have addressed years ago. But that’s not the point. It isn’t Bush’s fault nor the Dem’s or Republicans’ fault. It’s all of their fault. During this crisis and our current energy crisis, Congress took and extended VACATION. Why don’t we say anything about that? It is greed starting at the level of mortgage loan offices and home buyers through stated income loans straight including the banks and large institutions who knowingly funded these risky loans. The thought behind this from both sides of the aisle was that home ownership by even those with proven bad credit, no down payment is good for everyone and the economy. Bush didn’t create this fiasco. Every one of us who refinanced our house at 125% of “value” is just as guilty. A certain percentage of us spend more than we make and the rest of us are paying for it. We spend that cash on SUV’s and $2000 rims (imported from China). The reality is that many of us don’t buy American cars because we are snobs and other good reasons. But we could choose to support our own if we wanted to. We spend tremendous amounts of money on imported oil, clothing, electronics, textiles, and Iraq. Plus, how many of us are willing to step up and buy an American car, drive less, make an effort to buy American made goods. Why do you all hate Bush, but have no problem supporting a country like China without thinking twice about where the hell your laptop or clothes were made. China won’t let you chose your president or even criticize him. But you will send your money there. Why don’t you stop blaming and start doing. We have had a deficit because of OUR DAILY CHOICES for too many years, not because of one individual in the whitehouse. United We Stand, whoever wins the presidency is secondary.
September 25th, 2008 at 4:13 am
[...] Boztopia: Seven Simple Reasons to Oppose the Bailout [...]
September 26th, 2008 at 9:49 pm
Thomas Jefferson wrote ever so long ago of the need to oppose such government interference. I found a unique petition written using his mighty words. You can sign it at Jefferson’s Plea. Sign it. And get others to sign it. We need to go back to Jefferson’s america.
October 8th, 2008 at 1:39 pm
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