The Republican party has worked tirelessly to deregulate industries from banking to logging to oil & gas to transportation to anything and everything involving government oversight of business; and now, after the key players have become obscenely rich, the American taxpayer is now being REQUIRED to subsidize a bailout.
It's no slip of the pen that Treasury Secretary Henry Paulson's original draft of the bailout stipulates that the $700 billion would be used entirely at the Treasury Department's discretion and that no oversight--now or later, by Congress or the courts--would be allowed. What? Who is he to demand taxpayer money and demand we have no input in how our money is spent? To paraphrase the bumper sticker, if this affair doesn't raise red flags, we're not paying attention. With that statement, the whole idea that the money is to rescue the economy and not to protect a bunch of rich guys' investments is debunked.
There's a lot of talk in all this of moral hazard, which is defined at Wikipedia as follows:
Moral Hazard is the prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk. Moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions.
This banking and financial crisis involves the stratosphere of the business community, people whose livelihood and prosperity are carefully insulated from the country at large; Republicans have worked tirelessly to reduce taxes on unearned income and to reduce other taxes the wealthy must pay. It hardly seems proper, then, that the country at large must bear the responsibility of supporting these rich folks' prosperity and choices.
And now speculation is running rampant that the $700 billion figure will constitute but the tip of the iceberg. What reason do we have to trust otherwise? The assurances of W's appointees? And how will we scuttle our 3/4 trillion dollar payout when the same hand is extended later? We're only digging a deeper hole for ourselves now. A bill is passing thru the House of Representatives as we speak giving a further $25 billion loan to the American auto industry, and that figure is also thought by some to be just a start.
All this, remember, is on top of W's record deficits, which look even worse when he started his first term with a small surplus. What a turn-around! What an incomprehensible spending spree! This from a man who campaigned on a smaller government platform; we're now looking at an intervention in business that practically amounts to socialism. This has been criminally bad stewardship of the fiscal health of the nation, in addition to all the other grimy political subterfuge this administration has engaged in from the first day. The Republicans have worked tirelessly to keep the also-unfunded Iraq war off the books. These numbers are really dire and horrifying, and we're on the hook for them.
Henry Paulson and Ben Bernanke are suddenly telling us, after months of assurances that everything is sound with the economy, that we must now act and act quickly if we are to save ourselves. And now some muckety-muck (whose name I missed) in the Treasury Department is on the most recent newscast saying that the "return on our investment" of the $700 billion will make for less than that sum added to the ballooning national debt.
Bullshit all around, I say. Every statement coming from any branch of conservative government must be looked at with extreme skepticism: Republicans have been systematic since Regan in 1981 not only in dismantling and outsourcing as much of the federal government as possible, but (as Thomas Frank puts it in his book The Wrecking Crew: How Conservatives Rule) in hobbling the remaining government by putting overtly incompetent or inexpert or inexperienced people at the heads of government departments. The expected result of this is that government will be less inclined and less able to interfere with the workings of business.
Anyway, long and short: I don't think we're anywhere close to understanding what's going on with this meltdown, and we're not going to have a good enough handle in the next two days. I don't trust any of the utterances of government, and the press and Congress need more time to figure out what's going on.
Everything should be put on hold. And if we must choose now, we should say NO.