Bankrupt: Bush’s Wall Street bailout isn’t the answer
It’s been 21 years since author Tom Wolfe published his fictional novel Bonfire of the Vanities. In it, he describes the exorbitant lifestyles of Wall Street traders, who refer to themselves as “masters of the universe,” and the massive profits they rake in daily using other people’s money. Two decades later, the so-called masters of the universe are now begging Congress to bail them out—and preserve their enormous wealth—using nearly a trillion tax dollars from the “little people” upon whom they have mercilessly preyed.
That such a calamity would come in the dwindling months of the George W. Bush administration is no surprise. From his first day in office to his last, Bush will be remembered as the worst president ever. From starting wars of aggression to destroying constitutional protections to bloating the national debt, Bush has been a disaster. So why would anyone be surprised to now see him literally pull the plug on the national treasury so nearly a trillion dollars of public money can flow to the obscenely wealthy moguls of Wall Street?
During the Bush Reign of Error, the wealth of our nation has flowed in only one direction—upward. We have gone, in eight years, from a nation with a strong middle class to a bizarrely inequitable country in which the wealthy have received massive tax cuts and breaks while the rest of the nation—by far the majority—has seen their wages decline in terms of real purchasing power. As Bush infamously and shamelessly quipped at a New York fundraiser while looking over the crowd of his tuxedoed supporters and their trophy wives: “This is an impressive crowd. The ‘haves’ and the ‘have mores.’”
Today, the top 5 percent of the population controls 95 percent of the wealth, with the top 2 percent owning the lion’s share of that. At the same time, as we all know, the pressures on average Americans have escalated alarmingly during this same period. The costs for basics such as gas, utilities, education and health care have all skyrocketed while wages have remained static or declined.
Yet, despite the massive transfer of wealth in recent years, we are now being told, not asked, that it is our responsibility to deliver a $700 billion bailout to reward incompetent and greed-driven financial institutions and their over-the-top, multi-million dollar salaried CEOs for their failures. Moreover, we have to do it in less than a week because, according to Federal Reserve Chairman Ben Bernanke, if we don’t act quickly, the nation may “slip into recession.” Were Bernanke’s comments not so tragic, they would be hilarious for, as many of we “little people” know, we’ve been in a recession for quite some time now.
What’s puzzling and disturbing about all this is the ominous sense of déjà vu to previous Bush actions. Remember the “yellow cake” and “mushroom cloud” scares from Condi Rice that launched the Iraq War? Or how about the urgency with which the Patriot Act was jammed through, and the endless billions in “emergency” appropriations to “support the troops”? In every case, Bush and his minions threatened impending disaster if anyone took the time to read the bills, run the numbers, question the logic or stand up for the citizens. Today we live with the consequences of these ill-considered decisions and votes. And if Bush has his way, we’ll be living with—and paying for—the Wall Street bailout far into the future.
If, as we are told, it’s imperative that we provide nearly a trillion dollars to these masters of the universe, what will we get in exchange? So far, nothing. But maybe, just maybe, there are some things Congress should consider.
A good place to start would be the usurious interest rates and penalties these financial institutions charge on credit cards. The average credit card debt in the United States is about $8,000 per household and growing as consumers struggle to make ends meet. Even worse, many students are coming out of college buried in debt, much of it on cards. While the prime rate for federal funds is 2 percent right now, less than half of what it was a year ago, interest rates on credit cards can often run higher than 20 percent. Likewise, if it’s good enough for the IRS to postmark tax returns by the due date, why allow financial institutions to charge enormous late fees if your payment isn’t delivered by the due date, even if the delay was caused by the postal service?
Now that Wall Street’s banking institutions want billions in public funds, how about if we do some hard bargaining on behalf of the citizenry. In Latin, we’re talking a little quid pro quo here—they get our money, but we get at least a few crumbs back. If, as Bush and his pirates claim, this is such an emergency that those institutions are going to collapse without immediately receiving billions in federal funds, then they ought to be more than willing to give up some of their predatory lending practices on the “little people” they’re counting on for their bailout.
To their credit, the Democrats are putting up a fight. What’s puzzling is why they feel the need to fight at all since they control both houses of Congress and will write the bill. It would be refreshing to see the Dems demand that the funds for the bailout come from those who have benefited most from the Bush policies—namely, those few in the top percent who now own almost everything. And for once, if Bush threatens a veto, the Dems ought to let him do it.
But don’t hold your breath. Instead, what we’re likely to see is a measure railroaded through, without proper scrutiny and with virtually no opportunity for public comment, that loads this unconscionable debt burden onto future generations. Meanwhile Wall Street’s masters of the universe will be laughing all the way to their bailed out banks.
Helena’s George Ochenski rattles the cage of the political establishment as a political analyst for the Independent. Contact Ochenski at firstname.lastname@example.org.