Bailout Failure: Victory for the People?

Early this morning while running errands with my mother and my son, I mentioned that Congress isn’t listening to the people it claims to represent. We were talking about the Paulson bailout scheme, of course, one that would take money from We The People — who have a helluva time getting help when we are at the brink — to bail out scurrilous bankers, insurance bigwigs, and corporate fatcats in financial trouble. 

“People on the streets don’t want this thing, no matter how necessary Nancy Pelosi and the Shrub insist the bailout plot is,” I said.

Mom, more moderate than her firstborn, agreed that the populist view had merits, but maintained that some corporate welfare was needed. “I don’t care about the rich guys, but I’m thinking about how a crash of the financial system would affect the little people on Wall Street — the secretaries, the janitors, the middle-class people counting on 401Ks and mutual funds, etc.”

Though my mother was heretofore unaware, she was speaking to the choir on this issue. My personal view all along, as a student of economics (and one with a mutual fund retirement account), has been that we must help out the corporate class, but any bailout must give equal assistance to We The People, those of us who are working poor, struggling with mortgages, facing foreclosures and evictions, wondering how to fill our cars (if we have them) and take care of our families and ourselves. As any good progressive would, I vehemently opposed the plan as it stood, but with the knowledge that some suitable alternative must be found to replace it, and fast.

Upon my return home, the news had just hit: What was known among pinko circles as “Paulson’s Plunder” went down — as did the stock market in response.

Did the cries of the people — “peasants with pitchforks,” as the Newser web site called us (no, hon, it’s peasants with ploughshares) — aid in defeat of the bailout bill?

Perhaps. And if so, good going! Citizen action works. 

And it looks like the Haves are a bit worried…

From Fortune’s “Main Street turns against Wall Street”:

In one frenzied month Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke remade Wall Street. Along the way they may also have recast American politics. A month of historic government interventions shows signs of triggering a political version of climate change – unleashing a new era of class fury that could hurt U.S. companies, business leaders, and wealthy investors for years.

“A potential calamity,” predicts Democratic pollster Doug Schoen. “If the reactions were seeing hold, we could have real spasmodic anger directed at businesses and corporations.” And the timing will have consequences, says financier and onetime GOP presidential candidate Mitt Romney: “Unfortunately, politicians have seized on the politics of envy,” he told Fortune, “and they are stoking it this election year like Ive never seen in my lifetime.”

And this, from Newser:

 

The financial meltdown may have brought simmering economic resentments to a boil and prompted a populist backlash, writes Nina Easton in Fortune. Public opinion indicators—polls, calls to Congress—show widespread fury at the bailout. Long-building anger over growing economic inequality may have combined with disgust at the current crisis and the behind-closed-doors style of addressing it, forming a general anti-elite sentiment.

Seeing Henry Paulson seemingly throwing money at Wall Street, Americans have been reluctant to come around to the idea that their economic fate is connected to that of the bailed-out fat cats, and calls for executive pay caps reflect broad unease with the plan. Newt Gingrich describes the popular perception as “big guys bailing out their friends.”

 

This progressive populist has no interest in seeing a class war (while acknowledging that it is probably inevitable, given eight years of Bush rule and the terrifying possibility of a McCain regime). The truth is, though – what happens on Wall Street — if it’s bad — will happen to us as well. Barack Obama was correct in noting that wealth doesn’t seem to trickle down as Republican supply-siders insist, but pain most assuredly trickles upward. If the straits we navigate are already dire, hold on tight — things surely can worsen.

The bottom line is, like it or not, we are tied to the financial system. Lots of people who work within that system are society’s refuse, like us. An economic collapse in the nation’s financial sector will kick us in the teeth too — and most of us, unlike the rich wheeler dealers, don’t have a soft cushion on which to land.

This means it is time to get a proper bill introduced, one that will protect but not reward Wall Street and one that will give sorely needed help and protections for Main Street — for you and me. There must be fiscal oversight. There must be a way for taxpayers to get their money back. There must be a moratorium of foreclosures and mortgage reviews and rewriting. And that is just a start. 

The closing bell on Wall Street rang not long ago. The Dow was down nearly 800 points. Stock-market types may feel the heat right now, but check with a normal Joe or Josephine, whose only hope is their stock and pension plan. Wall Street’s failure would end up as ours. We can’t let that happen.

The loss of the Paulson plan was well deserved, and I congratulate all of us citizen grassroots activists for whatever part we played in getting a message across to lawmakers. But the time to gripe and chant slogans is over now: We have to be part of the solution: to suggest needed Main Street protections for any corproate bailout bill and other legislative proposals designed to help the poor and middle classes, to communicate with our congressional representatives, and to hold our public servants accountable if they don’t listen and act in the interests of We The People.  

But we have to get beyond an us v. them mentality. This financial crisis threatens everyone, and the poor, no matter what happens, will get the worst of it. Let’s grab those ploughshares and be a positive part of the solution.

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One response to “Bailout Failure: Victory for the People?

  1. Pingback: Bailout » Blog Archive » Bailout Failure: Victory For the People?

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