Sep 29 2008
The Sky is Falling (Bailout, part 2)
Has there ever been a time like this in recent memory when even our political leaders don’t know what the hell is going on or what to do next?
Bush warned us early last week that if we didn’t pass the emergency $700 billion bailout, that the sky would fall. Well the sky hasn’t fell (yet), but Wall Street just collapsed by 700 points in a matter of minutes, Washington Mutual - one of the largest banks in the country - failed last week, followed by Wachovia this week. The media is portraying it as a sale, but when the feds come in, take over your operations and force you to sell, that’s close enough to a banking failure enough for me.
Alan Charney, program director at USAction mused on the goings on of the DC political establishment over the weekend:
This is a fascinating moment in history. Many right-wingers are against a bailout because they are fundamentally against strong government intervention in the economy. Many other right wingers are for the bailout because they profoundly worried about the future of the financial system. Many left-wingers are against the bailout because they do not want Main Street to pay for the fundamental mistakes of Wall Street. Many other left-wingers are for the bailout as long as it really means strong government intervention in the economy, with ownership of financial institutions and genuine protections for those hardest hit by the financial crisis.
Where things are now, we probably won’t get enough of a people’s bailout that puts Main Street first (ownership and accountability plus protections for those hardest hit). This is primarily because many of the House Republicans are now united around an alternative that actually calls for less government intervention in the economy than we have now. Since the President and Congressional leadership are committed to a bipartisan bill, the new Agreement on Principles will probably be weaker than the first Agreement on Principles.
Some people argue that putting up to $700 billion into a bailout, even a people’s bailout, would make it much more difficult to move a next New Deal agenda (health care for all, clean energy, expanded educational opportunities, infrastructure) because of the fiscal squeeze that would follow. Other people argue that having huge equity positions in major financial institutions and strong regulation of them, along with economic recovery measures, could revive the financial system and even generate profits for the American people that could be used as an investment trust fund for the next New Deal agenda.
Every crisis is also filled with opportunity. The challenge is this: how do we best position ourselves to take advantage of the opportunities. From my perspective, the key step in positioning ourselves is gaining more public control over the economy.
So what do you think should be our ultimate goal?
- Should it be ownership and control of our financial futures?
- Should it be “I’ll give you what you want (bailout) if you give me what I want (help for regular people)?”
- Or is your position just let the bast@rds hang, economy be damned?




