A news article indicates that the Bush administration very well might try to get its hands on the second half of the $700 billion Congress designated for financial bailouts. I’ll admit, I’m less certain that the bailouts are the wrong thing to do than I was certain that invading Iraq was the wrong thing to do, but the dynamics were fairly similar: “CRISIS! DO THIS NOW NOW NOW NOW!” And Congress stampedes mostly in a bipartisan fashion in whatever direction the Bush administration pushes them. Then, predictably, there is little to no transparency about where the money is going.
I suspect without knowing that the Bush administration approach to this financial crisis has some “starve the beast” impulses. “Starve the beast” is the notion that, if the government spends enough and goes broke enough, it will have to retract out of financial necessity. Nevermind that it’s a little like trying to lose weight by first getting morbidly obese.
Near as we can figure, the bailout money is going only to the financial service industry and not to parts of the economy where middle class citizens actually build stuff. Maybe there are legitimate reasons for this, but there has been at least a whiff of class warfare. When manufacturers come to Congress asking for money, there is a lot of talk about union workers making too much money and questions about executives travel arrangements. When banks come asking, there is little discussion about the income packages of its employees or of the bank CEO’s travel arrangements. (Perhaps because they were coming from the east coast instead of the midwest.)
I also suspect that there is some last minute plundering going on, some smash and grab before Obama takes office which may have the additional benefit of hindering him from going all FDR on the country. There are some families in this country who were deeply scarred by FDR and the changes he made in this country. I wouldn’t be surprised if George H.W. and Barbara scared a young George Bush with bedtime stories about That Man in the White House coming to get him if he didn’t behave. No doubt, variations of progressive horror stories passed down from the Rockefellers and Harrimans to Samuel Bush and then to Senator Prescott Bush and thence to President George I.
Just speculation on my part, of course.
As so often in this Through the Looking Glass world, Jon Stewart the other day did the best piece I’ve heard about this (Sure, Detroit loses $2000 on each car, but at least you have a car when they’re done. When an investment bank loses $2000 it’s just paper out the window. So who do we bail out?).
“Hank” Paulson goes to Congress, says, “Gimme $750 billion now, no time for questions, now or ever.” The deal comes close but falls through. Then he comes back and say, “Gimme $750 billion, now, but this time I’ll answer a few questions”, and nobody asked, “What are you doing back here?”
And two things: I’m just a simple Hoosier boy, but when somebody tells me the US taxpayer needs to bail out financial institutions (to the tune of $24,000 per man, woman, and child) I have to ask myself, who th’ hell needs to borrow that much money in the first place? Not the average taxpayer. For a couple, that’s more than a 20% deposit on the average price of a home before the bottom dropped out (20% down–I’m old school, but I won’t be in foreclosure, either). I’ve got $48,000 what do I need a bank for? I guarantee you that if I took $48,000 cash for a spin around my neighborhood right now I’d find someone who’d sell me a house , arrange the financing himself, and let me borrow his car for a year if I needed it. Who’s borrowing that money?
The second is that I seem to recall both the head of the not-exiting-fast-enough current administration, and the New Guy, telling me that Social Security was in a “crisis” since it would run out of money in twenty-five years if nothing was done. Like the man said, I was born at night, but it wasn’t last night.