Wednesday, October 01, 2008

Progressives Have Come Up With A Bill Worth Backing But Will Rahm Emanuel And His Allies Kill It?


Yesterday Alan Grayson, the Blue America endorsed candidate for the Orlando congressional seat held by pathetic Bush rubber stamp Ric Keller, sent an e-mail to everyone in his district whose e-mail address he had. You may recall that when we first asked Alan for his thoughts on the bailout a week and a half ago, he said of the perpetrators: string 'em up-- which is pretty much what most Americans seem to feel. Alan's letter:
Thank you to so many of you, for writing to share your thoughts on the proposed Wall Street bailout.  As we work our way through your comments, we wanted to offer a few more observations of our own.

Carl Sagan, the famous American scientist, often said that "extraordinary claims require extraordinary proof." We are now being told that if taxpayers don't fork over $700 billion to Wall Street bankers who made bad choices, then "credit" (mortgages, car loans, business loans, etc.) will disappear. That is a really, really extraordinary claim. It requires extraordinary proof.  Where is that proof?

We have never done anything like this before, even during the Great Depression. Since the Federal Reserve was created, whenever there was a need to ease credit, the Federal Reserve lowered interest rates and bought bonds for cash, thereby "injecting" liquidity into the financial system. Just yesterday, the Federal Reserve did this, to the tune of over $600 billion.  Where is the evidence that these tools, which have worked for almost a century, suddenly are broken?  And if they are, then how did that happen?

Credit relies up the ability of intelligent, hard-working people to pay back that credit. Americans are just as intelligent and hard-working now as they were last month, and last year. Why, then, should we now suddenly fear that credit disappear?

Since this bailout would be financed with debt, we would be more than doubling the federal deficit this year, and burdening every man, woman and child with over $2000 to pay back. That's over $15,000 for my family alone. Because these are troubled times, I'm not anxious to do that.

It's worth noting that the people who are telling us that we must spend $700 billion of our money to avoid the collapse of credit are the same people who told us that there were weapons of mass destruction in Iraq, which would be used against us. The same people who surveyed the wreckage of New Orleans after Hurricane Katrina, and said that FEMA was doing "a heckuva job."

We are often reminded that we live in a free market system. That certainly does not mean that the taxpayers are the suckers of last resort.  It seems as though the free market's "invisible hand" has been balled into a fist, and that fist is about to punch you and me in the face.

We all agree that the credit markets need to function properly. And we are still waiting to see the proof that dumping $700 billion in worthless assets on the taxpayers is necessary for that to continue.

As an attorney Alan has been suing Bush Regime cronies for war profiteering in Iraq. He knows first hand the extent of their deviousness and treachery and not trusting the Bush Regime at this point should be a jumping off point for any plan. Their trickle down bailout bill was a disaster and, although Congress improved on it a bit it was still, in the words of one wag who emerged from his tanning booth to sniff it, "a shit sandwich." Yesterday two progressive stalwarts, Pete DeFazio (D-OR) and Donna Edwards (D-MD) presented legislation that actually addresses the economic concerns of everyday Americans. Rahm Emanuel and Steny Hoyer will put their heads together with fellow insider crooks in an attempt to make sure it is stillborn. The bill is worth supporting because it:
1. Stabilizes the financial markets without writing a blank check to the big banks and CEOs who got us into this mess.

2. Limits future losses by banks without asking taxpayers to pick up the tab. By suspending the application of fair value accounting standards by financial institutions, the bill will limit bank's artificial write-downs on the value of their mortgage-related and other securities.

3. Protects against predatory financial behavior by enacting permanent regulations against short-selling. By requiring the SEC permanently to block short-selling and restore the "up-tick rule" that blocks short-selling in a down market, the bill will protect against predatory financial behavior that harms investor confidence and hurts the ability of banks and other companies to raise needed capital.

4. Loans capital to banks that need it, with taxpayers making money on interest when the banks pay off the loans. By creating a Net Worth Certificate Program to allow the FDIC to lend short term capital to failing banks with the promise of repayment with interest, the bill replicates a successful program that worked to stabilize banks from 1982 to 1993. Banks that participate in the program must submit to strict oversight of their executives' compensation.

5. Restores consumer and small business confidence in banks. By requiring the FDIC to raise its insurance limit on costumers' deposits from $100,000 to $250,000, the bill assures consumers and small businesses their money is safe and helps eliminate runs on banks that threaten the stability of the financial markets.

The DeFazio No Bailouts plan is an important, short-term solution that protects taxpayers and their savings accounts and reins in the reckless behavior of big banks.

But unless we adopt a comprehensive economic plan that addresses the priorities of working Americans-- a plan that deals with the underlying weaknesses in the economy-- we will not succeed in reviving our economy and we will fail to achieve a sustainable economic recovery.

Congress needs to act on a more comprehensive plan to address rising unemployment, stagnant wages, declining home values, the healthcare crisis, and a tax system that is tilted in favor of the wealthy.

The Senate can start this week by taking up the economic stimulus plan passed last week by the House. The stimulus bill:

• helps people hit hard by job losses
• creates jobs by investing in American infrastructure
• provides relief for people bracing themselves for record heating bills this winter, and
• increases access to healthcare by providing Medicaid assistance to states

There's a great deal of money-- and power-- riding on this bill. And not all the bad guys are Republicans (although all Republicans are bad guys). The House member who has taken the most bribes from the mortgage crisis culprits is none other than the Democrats' own Dark Prince, Rahm Emanuel. Along with the other well-paid servants of these industries, he will work diligently to wreck this plan and push for a tarted up version of Paulson's monstrosity. Keep these numbers in mind this week when the voting moves back to the House. A dozen of the worst and most culpable crooks:
Rahm Emanuel (D-IL)- $729,200
Spencer Bauchus (R-AL)- $483,350
Melissa Bean (D-IL)- $383,278
Chris Shays (R-CT)- $362,720
John Boehner (R-OH)- $357,000
Eric Cantor (R-VA)- $318,650
Steny Hoyer (D-MD)- $286,099
Tim Mahoney (D-FL)- $270,590
Roy Blunt (R-MO)- $227,025
Dennis Moore (D-KS)- $170,751
Tom Feeney (R-FL)- $126,200
Patrick McHenry (R-NC) $61,550

Most likely scenario though is that the Senate, many of whose members-- most of whose members-- are financially tied to the culprits in the meltdown, will pass a stinker of a bill today with some sweeteners for the Republicans and then the leadership will ram it down the House's throats to overcome the threat they perceive from a New Deal type bill being offered by DeFazio and Edwards.

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At 1:04 PM, Anonymous Anonymous said...

Aren't we forgetting where His Fraudulency and al-Qaeda may be equally culpable between themselves of creating the circumstances behind the mess His Fraudulency wants to distance himself from?


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