Breaking the Bailout
No Associated Press content was harmed in the writing of this post
This week the bailout went from outrageous to stupefying. As in, "half the value of everything produced in the nation last year". If it was not already obvious that the show Congress put on for us last week was a complete charade, the illusion did not survive the weekend. Aside from the dollar totals there are almost no details, but keep in mind deregulation by Washington gave Wall Street free rein to indulge its worst instincts. The major players have every reason to minimize how bad the situation really is, so don’t use the $20 billion actually spent – use the amount guaranteed. Further, that likely represents the largest number Citigroup executives were willing to own up to after they decided to offer taxpayers this once-in-a-lifetime investment opportunity. In other words, it’s a floor and not a ceiling. Keep in mind too that the giveaway is coming from an administration that casually lies about the cost of its initiatives in order to make them more politically palatable (most famously recall the threat to fire Medicare’s chief actuary when he prepared to go public with a higher estimate – as it turned out still less than half the real total – than the White House considered convenient). So let’s just double it and call it a nice round $600 billion that we will be on the hook for.
Citigroup is just this week’s looting. Digby tipped me to an extensive New Yorker article by John Cassidy on Federal Reserve Chairman Ben Bernanke’s response to the crisis. Cassidy writes of all the shadowy activity behind the scenes: "Over fifteen months, beginning in August, 2007, the Fed, through various novel programs known by their initials, such as T.A.F., T.S.L.F., and P.D.C.F., lent more than a trillion dollars to dozens of institutions….The programs, which have received little public attention, were supposed to be temporary, but they have been greatly expanded and remain in effect." He also quotes Bernanke saying "You want to put the fire out first and then worry about the fire code" and Treasury Secretary-nominee Tim Geithner praising Bernanke’s "willing[ness] to act quickly, with force and creativity." How do all those programs get started without Congress having a look? How do they continue? Why is there no interest in where that trillion dollars went? Do we not have the ability to put out the fire AND revise the fire code? Is our government incapable of doing two things at once? Once the crisis passes there will be calls for harmony, and complacency will set in as well. Right now is the best chance to do so. And given the failure of leaders to see the crisis coming (a product of the willful ignorance caused by their refusal to monitor the industry) I do not put much of a premium their acting quickly, with force and creativity.
We now have a government that is entirely unresponsive to its citizens’ needs and unwilling to be frank with us. There was overwhelming opposition to the first bailout. What was the response? Not to demand accountability, fire executives, claw back their lavish compensation packages, assume operational control of the failed businesses and offer transparent oversight to the public. It was to trust those already shown not to be trustworthy and leave administration to those who had already failed. Now instead of a second bailout – which would promise again to be terribly uncomfortable for lawmakers – they simply give carte blanche to some combination of the president, Treasury, Federal Reserve and heaven knows who else while they look away. And the strange thing is, no one in Congress seems to care too much. Maybe they just don’t want their fingerprints on it, so they are happy to let the White House do whatever it wants in the dark. But then: Why are you even in your job? Why did you run for office? What do you understand your job to be? Or has Wall Street assembled such formidable influence that it can force a branch of government into quiet submission? The whole situation encourages us to believe the worst, most cynical and corrosive possibilities: That it all is a big con, and they all are in on it.
In that context comes Break the Bailout. Please have a look and consider making a pledge for the December 7 money bomb. See the other suggestions on the site for being active as well. Even if it feels like an exercise in futility (and I’ll grant that on days like Monday it does) those of us who want to at least know what is happening need to register our our disapproval. Make your voice heard. Let Washington know you are paying attention, and are not happy.