From abroad

Peter Lavelle'S BLOG September 30, 2008, 15:23
Bailout busted!

The U.S. government’s $US 700 billion plan to bail out Wall Street is dead in the water. It was still another example of how some politicians and mainstream media terrify public opinion to serve special interests. The politics of fear appear to be at work again. The Bush people used fear to invade Iraq and now are using the same strategy to reward some of the greediest and irresponsible people on the planet.

As America’s credit crisis deepened, we were all told that something had to be done by the Bush administration. Mainstream media took the cue to spread stories of impending financial disaster. The bidding war as to how bad things could get became part of the presidential campaign – we heard that without a bailout, America and the world faced a massive depression. Tax payers were told that doing nothing to resolve the financial crisis would risk their jobs, homes, savings and even the future was at stake. In the end, the bailout actually threatens to undermine what it is supposed to fix – that is, economic and financial confidence.

If you take a cursory look at the 106-page bailout plan, you will notice who is being helped and who is ignored. Wall Street benefits at the expense of Main Street. In fact, there is no real reason for this plan. The market and the financial players who created this monstrous crisis should pay for it and allow the market to resolve problems without government intervention. This isn’t happening – what we are seeing is state socialism for the rich in capitalist America.

Consider who wrote the bailout package. Not economists, financial experts, or consumer advocates. The authors are from the same institutions that claimed to know what is best for us. And they represent the financial institutions that stand to benefit from the biggest financial scam in history. Also keep in mind, the bailout doesn’t really even consider financial reform. And it doesn’t take into account how this crisis came about in the first place. Most probably this is part of the plan.

The hysterics of some self-interested politicians and the greed of Wall Street have never considered a practical way out of this crisis – the way that would help the people the bailout is supposed to help – the average American with a mortgage.

Is there an alternative to the Paulson plan? Of course the answer is yes. Why not take the $US 700 billion to underwrite the average American with a mortgage? If the real crisis is people not being able to pay off their mortgages, then afford them the means to do so. Now, that is a bottom-up solution helping the average tax payer. Let the banks and bankers pony up to their own mistakes. This won’t happen. The Paulson plan looks to a top-down approach helping only financial industry executives.

I have never been much interested in conspiracy theories. But I must at admit as Bush leaves office, he appears to be very eager to help out his friends on Wall Street – the same people who helped him sell the Iraq fiasco. One has to wonder as the Bush administration will soon be part of history whether Wall Street is being rewarded for its loyal support and gross and greedy loyalty. These are dots to be connected. I suppose fear and greed are the hallmarks of the Bush era. And the world is not a better place because of this.