The big business bailout that could kill liberalism for a generation
Let me tell you a little secret about things like universal health insurance, increased funding for education and renewed spending on infrastructure: they take money, lots of money. If the government has no money to spend, you’re going to be fairly limited in your ability to pursue a progressive agenda.
Conservatives call this starving the beast: and they’re damn good at it.
It worked like a charm during the Reagan Administration. Saint Ronnie was able to buy massive popularity by cutting taxes (mostly for the rich) while spending public money like a drunken sailor. Later, when the country turned to the left, if ever so briefly, electing Bill Clinton, the time had come to pay the piper. So, instead of pursuing a broad-ranging liberal agenda, the Clinton years became all about balancing the budget. As Clinton himself once said, Democrats had become Eisenhower Republicans.
Hey, somebody had to do it, right?
And, sure enough, Clinton did balance the budget, even creating a surplus, though he lost control of Congress to the Republicans for his trouble.
What did this great fiscal accomplishment do for long term progressive goals? We ended up with another Republican President who, once again, set to work starving the beast. He did it through ill-advised tax giveaways to the rich, an unnecessary war in Iraq, corruption and crony capitalism and so much more.
But it turns out that all of this was merely the warm-up act: enter now the feature presentation — the bailout of all bailouts (and the rip-off of all rip-offs). Its simplicity is a thing of beauty. Just take 700 billion dollars of taxpayer money (and probably a lot more), much of it coming from working stiffs, and give it with few if any strings attached to a group of huge financial corporations. We accomplish this by having our government take over their worthless assets, giving them good money in return.
As I’ve said before, now that’s socialism even a robber baron could love.
Talk about starving the beast! And sure enough, Barack Obama himself is already noting that if this bailout is adopted, proposed social spending may have to be delayed. But then who could argue with the virtue of denying health insurance to poor kids so you can shovel loads of money into the coffers of large corporations to protect them from their own bad investment decisions.
I mean, Jesus, a country has to have priorities, doesn’t it?
Bottom line: if this bailout goes through as proposed — at least without extensive modifications — liberalism will be effectively dead in this nation for years to come. Forget about change. Forget about big ideas. No, instead, we’ll once again get to play the role of the parents forced to clean up the mess left behind by our irresponsible (right wing) children.
And then, after a few years, when the public gets tired of making sacrifices that bring them nothing tangible in return, we can repeat the whole process over again.
Now, doesn’t that just sound keen?
September 23rd, 2008 at 9:01 pm
The way I understand it, this gives the presidency all powers so there is no need for congress. Don’t need ‘em to start wars, don’t need ‘em to set fiscal policy, don’t need ‘em for anything else. And what does the “Democratic” party do? acquiesce to the petty & extremely stupid dictator. As he once said, “Constitution? That’s just a piece of paper.”
September 24th, 2008 at 1:51 am
I fear you are correct, Steve. It isnt only this bailout that will take the country to Hell in a handbasket; it is the unimagineably huge deficit; the 12 billion dollars a month spending on war; the bleeding of the Middle Class (our economic engine); the forthcoming healthcare megacrisis with aging baby boomers; the debt bonds that demand interest payments; a crumbling infrastructure; and the looming, omniscient specter of global warming with its ever-increasing, natural fury. Congress wants to put bandaids on gaping, suppurating wounds. They want quick fixes that dull the witless masses until the next election. Hence, “Drill, Drill, Drill”. The fools and idiots are chanting for their own destruction.
September 24th, 2008 at 10:19 am
Boy, I don’t understand the “Reverse Auction” idea. As I understand the Plan, the government offers to improve a bank’s Balance Sheet by removing “toxic” assets (i.e. their bundle of mortgages for home owners who are behind in their payments and, perhaps, soon to be in complete default). Then the government (Secretary Paulson, unrestained and unaccountable) gives the bigger bundle to a Wall Street firm or firms (who, of course, earn fat commissions once again) for sale to the LOWEST bidder. In turn, the taxpayers retrieve the lowest possible amount, and whoever the low-ball buyer may be is free to “flip” those assets and make a hugh profit, as was common during the S&L bailout in the 80’s. This Plan makes no sense, and it spells out a worse disaster than the original problem. Is it just me?
September 25th, 2008 at 1:24 am
Dear tomthetaxman, Paul Krugman, Princeton Professor of Economics and columnist for the New York Times, says it doesnt make sense to him, either. Nor does it make sense to me. I see it as bailing out billionaires so that more Wall Street Slick Willys can make money at the taxpayers expense. We get diddly squat in return. According to Dubya the Dumba–, we are supposed to be grateful that jobs will be saved. Tell that to the millions who have already lost theirs. Read Krugman’s column in the New York Times, it was on Sunday or Monday. What is happening now is as much a function of panic, as it is bad financial judgement. Perhaps, this bailout will calm some fears, but not for long. I suspect it will be very short term. The Mad Money guy thinks people will rush in to buy the assets, and thus save the day. I think the country is in panic mode, much like a stampede in a burning theater, and most people will want out and are not going to buy bundled mortgages that cant be paid by people who have lost or will soon lose their jobs, because the economy stinks.