Do we have a President? Or do we have someone who is drawing a paycheck but isn’t running the country? The latter seems to be the more accurate assesment. What leadership has George Bush personally shown to the American people? None. He and his cronies knew the financial market freeze up was coming and they decided to do nothing about it. At a minimum, they allowed banks to fail. More accurately, they encouraged their failures through destructive policies. But ever since the Bush Bailout was presented to America (months after they had written it), where is the resolute leadership that pundits were crowing about the past 8 years? The answer is there wasn’t any leadership to begin with. Bush can’t demonstrate that which he doesn’t have.
The House of Representatives rightfully rejected the amended Bush Bailout Plan. Legislators can talk all they want to about how much they negotiated about the bill. The difference between the original and modified Bush Bailout Plans? About 100 pages of fluff. Nothing real was added to or taken away from the bill. Treasury Secretary Paulson was still going to be left with too much unchecked power. Homeowners were still going to lose their homes. Executives were still going to walk away from their experiments which ended in disaster with millions of dollars. The credit markets were still going to remain stuck in neutral. And since then? Bush has exhibited no attribute that is so sorely needed at this time by the middle class. That’s not by accident – current events are a direct result of planned CONservative economic policies. Enrich the rich further. Destroy the middle class and make America look more like a feudal state than a democracy.
Readers of this blog know I have no love for CONservative policies. They’re too top-down, hypocritical and destructive of democratic principles. Careful readers of this blog know I don’t pull any punches when it comes time to disagree with Democrats. This is one of those times. None of the Congressional leadership, Democratic or Republican, has displayed any kind of useful leadership either. Many of them are just as guilty in creating this morass as Bush’s cronies are. Their palms have been greased with too much corporate money during their careers. During that same time, Democrats lost more races than they won. Their habits are ingrained in an environment where Republicans could get away with relentlessly attacking them, no matter if those attacks resembled reality or not. Despite stunning victories in the past 2-4 years, many older Democratic officials still don’t understand that the political landscape has shifted underneath them. They need not fear absurd Republican attacks like they used to. But they remain cowed and thus unable to lead at one of the most critical moments in our history.
Democrats should come up with their own legislative bill to address the financial mess. I know they wanted to go home at the end of last week and campaign, but reality has a rude habit of interrupting plans. Democrats haven’t reached out to economic experts to work on developing their own policy proposals. Similar financial situations have cropped up before, both in the U.S. and abroad. Solutions were identified and implemented before. Simply looking at those solutions and slightly adjusting them to our current situation would seem prudent. This particular economic problem cannot be characterized by anything more esoteric than has been witnessed before. It is an insult to Americans that Democrats, historically so good at dealing with the economy, are offering no plans of their own. I expected Republicans to drop the ball – and they have. All they’re proposing is further tax cuts for the rich. That won’t solve anything for the rest of the 99% of us.
Mortgages are at the core of the current problem. That might change in the future, but for now, that’s the prime item. How about issuing a temporary moratorium on foreclosures, which would allow neighborhood home values to stop plummeting. Anyone who is currently undergoing foreclosure or is close to doing so should meet with their lender to renegotiate the terms of their mortgage. Reduce the loan rate, extend the term of the loan, do whatever it takes to allow people to stay in their current home. It can be done so that people are responsible for paying what they can, but reducing the immediate financial demand the loan presents. It shouldn’t be done in bankruptcy court because of the short- and long-term effects on credit. The system was purposefully gamed so that people were more likely to fail financially. It primarily isn’t their fault the economy went south and they became unable to pay their mortgages on time. At a time when credit markets are freezing up, adding thousands to millions of people to the ranks of credit unworthy won’t remedy the credit market. It would exacerbate the problem.
Pair this up with another shot of economic stimulus to prevent the gears of the economy from seizing up in the next 3-6 months. Also, introduce a minor transaction tax to provide for future instances like this one. Banks fail as part of economic cycles. But taxpayers should not be used as some sort of limitless piggybank when bankers’ greed gets the best of them. They should be more responsible for their failures in the future. Offer some limited buyout of bad debt in return for some taxpayer equity in the institutions needing it. Republicans will scream their little heads off about nationalization or what not. Let them do so. Either taxpayers get something in return for their investment or we slide into a depression. I want to see Republicans stand up and demand a depression instead of allowing a common-sense solution go through.
Income. Speaking of a gamed system – real incomes have been stagnant for way too long. High-paying manufacturing jobs have been leaving the country for over a decade now. The minimum wage was finally bumped up a little bit for the first time in over a decade, with some more small increases coming. Some states’ minimum wages are higher than the federal minimum wage. Those states are weathering the economic downturn better than those who still have low wages. Most Americans – the workers – have been forced to settle for less and now CONservatives want to put them on the hook for billions while giving rich individuals and corporations more tax cuts? Seriously, this madness has to end! Pay people what they’re worth: a living wage.
If government officials (of any party) want Americans’ confidence in a solution, they’ll have to ensure that fat-cat executives aren’t going to benefit while taxpayers get the bill. Executive pay and bonuses need to be frozen until the economy returns to health.
Paulson can’t get all the power he’s looking for. It’s absurd to even think one person could be trusted with $700 billion, especially when it isn’t their own. The GAO needs oversight in any solution. They’re responsible for maintaining a big-picture view. Approval for further action needs non-partisan analysis.
Those banks who really need money can get a loan from the government. Interest applies to the loan. And while the government is out that money, banks shouldn’t be allowed to offer dividends to shareholders. When the bank can demonstrate they’re on better footing and have repaid the loans, they can operate as they did before.
Any solution that doesn’t truly protect taxpayers should be dismissed. Corporations have made billions of dollars of profit off the backs of taxpayers under CONservative rule. They threw away the rules to their games and now they’re threatening Americans with a depression unless they get exactly what they want. Enough is enough. They can either act civilized and accept common sense rules and boundaries of behavior or they can fail. The days of free-loading need to come to an end.
Democratic officials haven’t indicated any of this as even a remote possibility. Their lack of leadership isn’t surprising, but it is lamentable. As a result, the American people need to assume their leadership responsibilities that they have laid by their sides for too long. Our government exists and works because of us. It’s time for the people to lay out the standards and policies moving forward.