The American people went up against some high-rollers in a table-stakes showdown yesterday, and the professional gamblers blinked. The people had to call their bluff, because the people are the only ones holding any high cards in this game. We have a vote, and we can close down the table.
It’s the Rumplestiltskin story on a grand scale. The maid pledged her first-born to a troll in exchange for the ability to spin gold from straw. That’s what Wall Street’s been doing, spinning gold from straw, on the pledge of the US government to mortgage our kids and grandkids. Except that the people wouldn’t go along.
In the first place, the people don’t trust Rumplestiltskin with their kids’ money. The people are aware that Bush, Paulson, and their cronies in Congress have been running a scam. Nobody says exactly what this money is for. Nobody says where this money is coming from. When the people try to find out, through their trusted news-suppliers, where the heck the billions are going, the policy-makers leave the room. Would you pledge your first-born to people who refuse to answer questions?
To say that bailout proponents are a collection of cynics would be an understatement. On the Democrat side, they allowed more than a third of their majority to vote against the bill–mostly, incumbents who face tough election contests–believing they could pass it easily with the help of those notorious agents of greed, the Republicans. But there weren’t enough “safe” Republicans to risk a vote for blackmail. It wasn’t principle that won the day for the people, but stark terror.
It’s no exaggeration to say that Congress, in giving the Bush plan any serious consideration at all, exposed itself as an assembly of thugs and enablers. The gamblers in banking and real estate bid up prices on everything with easy credit, pocketed the profits and commissions, and put housing and a decent quality of life out of reach of half the population. Now their equity is being devalued, as prices begin to retreat to within the range of ordinary people, and they want government to make up their losses. Only a corrupt government would do such a thing. They made their buck on the inflation of the bubble, and now they expect to be compensated because it busted?
Voters also noticed that in the “legislation” proposed by the Bush/Frank/Paulson cabal there was no provision for the raising of the money. They were just going to spend it, and they never said where they were getting it from. That’s dishonest, and the people saw through it.
How would the people have reacted if Barney Frank had written a bill that called for a one-time property tax levy, graduated, on owners of more than five million, to put the banks back on their feet? The people would have applauded, but Frank didn’t propose such a tax. In fact, nobody proposed anything except the blank-check approach. No government subsidies for college loans and small business loans. No direct assistance to mortgage debtors. No rent subsidies for displaced tenants and homeowners. No public works. Nothing but the Bush plan, slightly revised. People aren’t stupid enough to accept the first solution offered to a problem as complicated as this one, especially from people they don’t trust who have lied to them before.
As low as members of Congress score on the public trust scale, the news media rank lower. News-consumers must have noticed the dismay on the faces of the TV people–their cooperation in sowing panic has been a mainstay of this blackmail attempt–as Dow Jones declined ever so moderately (much less than the gains that brought it to its current overpriced level) and didn’t crash. There was panic among the news-mongers that there was no panic. Bluff called.
Will there be a depression? Of course commerce will slow down. That was already happening. A bailout might have postponed the reckoning until after election day, but when you spend what you don’t have, you eventually have to pay up. As individuals, we borrowed to eat and work. As a nation, we borrowed to enable our leaders to loot, waste and ravage. The bill is coming due.
As it turns out, the creditors, who said they wouldn’t lend without this payment, stand to lose more by burying their money than by lending it, and so the credit markets continue to function. It might become harder to borrow, but for the vast majority of Americans, blacklisted or about to be blacklisted by credit rating bureaus, it will be no less impossible than it is now. Let this bailout die, and let’s oust this racketeering outfit that used to be our government before we allow them to dabble any further in finance.