The Mess We Are In
I am not an economist nor do I claim to be an expert on finance and economic matters. I am, however, an ordinary citizen, a voter, and a taxpayer who is being asked to bear the brunt of paying for the mess created by the greed, irresponsibility, and recklessness of those who made out like bandits in the deregulated atmosphere of the financial system for decades.
When I make mistakes with my money and finances, or if me and my family get into financial trouble we don’t get a bailout. But now we, the taxpayers are being asked to do that very thing — supposedly, for the sake of the country’s financial well-being and survival — at the behest of those who created the conditions for the financial crisis and who mismanaged the economy in the first place.
Voting on the Bailout
I opposed the bailout as it was originally drafted and which was defeated in the House of Representatives vote. There were many good reasons to oppose the original bill as this list from David Sirota points out.
After the bill was defeated in the House revisions were made to the legislation and a vote was taken in the Senate where it passed.
In short, as I said at the beginning, the bill is a vast improvement over the original Treasury proposal. Given the choice between approving or defeating the bill as it stands, I would urge supporting the bill. I do so without illusions. There need be no pretense that it will solve our underlying financial and economic problems. It will not. The purpose, in my view, is to get the financial system and the economy through the year, and into the hands of the next administration. That is a limited purpose, but a legitimate purpose. And it may be the most that can be accomplished for the time being.
Alternatives to the Bailout Are Out There
Contrary to leaders like Bush, Paulson, and leaders within the Congressional Republicans and Democrats that say pass the bailout as it stood or face certain catastrophe, there are alternatives to the bailout and I supported taking a good, long look at these alternatives and make them part of the criteria by which any bailout should be structured.
Here are a few examples from the Progressive sphere:
The Main Point
Paul Krugman and James Galbraith, among many other economists, agree that this latest revision of the bailout is, at best, a stopgap, band-aid gesture so that the economy does not collapse completely-for the short term. They estimate that short term being establishing the next administration after the November elections. For such an important bill and vote, that doesn’t inspire much confidence in me as a citizen.
This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been hand picked by the Bush administration. This bill does not effectively deal with the issue of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans in the aggressive, effective way that we should be. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.
This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds. This bill does not address the issue that has taken us to where we are today, the concept of too big to fail.
And THAT’s the point. Any bailout or any solution to the financial mess we are in must address these underlying causes that led to the crisis in the first place. And nobody who is in a position of power or leadership seems to be listening to the glaringly obvious common sense of people like Sen. Sanders.
The bailout may very well pass the House on its second go round, but the underlying causes for the crisis will remain and will be unaddressed. As one of my friends put it to me in an e-mail:
There will be NO addressing of stronger regulatory action on Wall Street down the road. There will be no punitive measures against the speculators who caused this mess in the first place. You will not see any Congressional checks on executive power from the Treasury Department. There is NO later. It doesn’t matter if it is McCain or Obama who sits in the White House either.
Once the bailout money jump starts the credit flows between the banks, all of the talk about changing the culture of Wall Street and reigning in the excesses of market capitalism will die away. Finance industry lobbyists will shower members of Congress with un-reported gifts and reported campaign contributions. It’s business as usual once again.
The Final Word
So if you are in favor of the bailout there is good news for you in that momentum seems to be on the side of the Senate version passing the House. But you better not have any illusions that what you are supporting is THE solution to the crisis. I agree with the Krugman-Galbraith camp that says what the bill represents is, at best, a stopgap measure designed to have the economy limp its way along until the next administration is established.
I’m in the camp of Sanders and others who offered alternatives to the bailout and who argued that the underlying causes of the finance crisis must be addressed. The only reason the Progressive vision cannot be articulated into a viable alternative to the bailout as it was presented by Bush, Paulson, and Republican and Democratic Congressional leaders is that the Progressive movement does not have the political juice to set the agenda. That doesn’t mean they are wrong. That just means politically, they largely function in the margins and are not players.
Don’t let the debate begin and end along the terms of whether the bailout bill should be passed or not. The problem goes much deeper than that and doesn’t deserve to die down whether or not the bill passes.
Inequality Has Run Amok. Do Leaders Care?
By Dmitri Iglitzin & Steven Hill
When pets are poisoned by imported pet food or U.S. attorneys are fired under suspicious circumstances, Congress gears up hearings and vows quick action. A far greater scandal, however, has hardly gained the interest of legislators or the presidential candidates. That is the increasing wealth gap between the rich, the middle class and the poor, which is reaching alarming proportions.
Liberal Arts Dude sez:
This is pretty much THE issue for me that gets me going and which is the originating spark that made me want to be a political blogger in the first place. The issue of inequality—and what to do about it.
So far I have heard little from either the Republicans or Democrats on socioeconomic inequality as a major issue. John Edwards talks a bit about poverty but I have yet to hear any of the candidates talk about inequality along the terms of social class and to propose solutions along those lines.
Why do I favor such a discussion? Because inequality in a capitalist society is about social class. One cannot talk honestly about inequality in this country unless you include in the discussion the subject of class. And as a country, we cannot move forward to formulating solutions unless we first acknowledge exactly what is going on.
However, American politics and civic discussion seems strangely silent on the topic of class. That is something I have never really understood in my over two decades of having lived in the U.S. and grown up here. Sure, there are Socialists here who do view inequality on an explicitly class-based level. But they are pretty much marginal in their influence and not part of the mainstream.
I am not sure if it is the American culture of radical individualism, or the belief that we are all middle class that is the problem. Americans just don’t think about politics and economics on explicitly class-based terms. Hence, they don’t act politically and economically on explicitly class-based terms. Which means the middle and lower classes are divided easily by wedge issues and various “values”-based appeals by those in power who would like to maintain the status quo as it is.
It is one thing to appeal to our leaders and politicians and implore them to have our interests in mind when they craft policy and they implement laws and regulations on a national level. That’s the model that exists right now. We depend on the few Populist politicians out there who are still decent human beings to represent our interests.
It is quite another to aim for a situation where those leaders and politicians are swayed by our influence because the middle and working classes recognize their common class interests and are united in making sure that those interests are represented in the halls of power. This is the type of politics that I favor.
One Student Does the Incredible: Gets Law Passed for State to Pay Off College Debts (from Alternet)
When nonvoters are asked why they don’t participate in politics, the most common answer they give is that they don’t think they can have any impact. The system’s gamed, they say, broken, and lawmakers are only concerned about the interests of their cronies.
Thankfully, Andrew Bossie, a young grass-roots organizer, never came to believe that ordinary people are powerless. In 2005, Bossie, then a student at the University of Southern Maine, looked around and noticed that a generation of young people was having real problems affording the kind of education that most people see as vital to having a shot at the American dream.
END OF POST
National Popular Vote
Quoted from the web site: http://www.nationalpopularvote.com/index.php
The National Popular Vote bill would guarantee that the presidential candidate who receives the most votes in all 50 states will win the Presidency.
In April 2007, Maryland became the first state to enact the bill. The bill has passed 10 legislative chambers. In 2007, the bill passed the Arkansas House, California Senate, Colorado Senate, both houses in Hawaii, Illinois House, both houses in Maryland, and North Carolina Senate. In 2006, the bill passed the Colorado Senate and California Assembly and Senate.
The bill currently has 350 legislative sponsors in 47 states.
The current system of electing the President has several shortcomings—all stemming from the winner-take-all rule that awards all of a state’s electoral votes to the presidential candidate who receives the most popular votes in each state.
Under the winner-take-all rule, candidates have no reason to poll, visit, advertise, organize, campaign, or worry about the concerns of voters of states that they cannot possibly win or lose. Voters in two thirds of the states are effectively disenfranchised in presidential elections because candidates concentrate their attention on a handful of “battleground” states. Candidates concentrate over two-thirds of their advertising money and campaign visits in just five states; over 80% in just nine states; and over 99% of their advertising money in just 16 states. The spectator states in presidential elections include 12 of the 13 least populous states (all but New Hampshire); 7 of the nation’s 11 most populous states (California, Texas, New York, Illinois, New Jersey, North Carolina, and Georgia).
Another shortcoming of the current system is that a candidate can win the Presidency without winning the most popular votes nationwide. A shift of 60,000 votes would have elected Kerry in 2004, even though President Bush was ahead by 3,500,000 votes nationwide. A shift of a handful of votes in one or two states would have elected the second-place candidate in five of the last 12 presidential elections. A second-place candidate won in 1824, 1876, 1888, and 2000.
The Founding Fathers gave the states exclusive and plenary (complete) control over the manner of awarding of their electoral votes. The winner-take-all rule is not in the U.S. Constitution. It was used by only 3 states in the nation’s first presidential election. Maine and Nebraska award some of their electoral votes by congressional districts.
Under the National Popular Vote bill, all of the state’s electoral votes would be awarded to the presidential candidate who receives the most popular votes in all 50 states and the District of Columbia. The legislation (in the form of an interstate compact) would take effect only when enacted, in identical form, by states possessing a majority of the electoral votes—that is, enough electoral votes to elect a President (270 of 538).
The bill has been endorsed by the New York Times, Chicago Sun Times, Minneapolis Star-Tribune, Los Angeles Times, and Sacramento Bee, Common Cause and Fair Vote.
70% of the public has long supported nationwide election of the president.
If you get a chance and have some quality time to devote to understanding an extremely important part of American political process check out this web site. It is an online video game introduction to the practice of “gerrymandering” or manipulating the way electoral district boundaries are set for electoral advantage.
The game was developed by the USC Annenberg Center for Communication. I played it and it took a little effort to be able to play it but just going through the process allows you to experience the different dynamics involved in redistricting—how the system is set up and most importantly, how it can be abused.
Kudos to the USC Annenberg Center for creating this valuable tool and distributing it online for free so ordinary citizens can have easy access to it. I only hope that many, many people visit the site to check out their very worthwhile creation.