Re:
Billions for Bailouts! Who Pays? -- 09/19/2008
By Senator Bernie Sanders While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.
Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, “The fundamentals of our economy are strong,” the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.
http://www.sanders.senate.gov/news/record.cfm?id=303313The Middle Class Must Not Be Forced to Bail Out Wall Street Greed
-- 09/21/2008 For years, as a member of the House Banking Committee and now as a member of the Senate Budget Committee, I have heard the Bush Administration tell us how “robust” our economy was and how strong the “fundamentals” were. That was until a few days ago. Now, we are being told that if Congress does not act immediately and approve the $700 billion Wall Street bailout proposal these “free marketers” have just written up, there will be an unprecedented economic meltdown in the United States and an unraveling of the global economy.
This proposal as presented is an unacceptable attempt to force middle income families (and our children) to pick up the cost of fixing the horrendous economic mess that is the product of the Bush Administration's deregulatory fever and Wall Street's insatiable greed. If the potential danger to our economy was not so dire, this blatant effort to essentially transfer $700 billion up the income ladder to those at the top would be laughable.
Let us be clear. If the economy is on the edge of collapse we need to act. But rescuing the economy does not mean we have to just give away $700 billion of taxpayer money to the banks. (In truth, it could be much more than $700 billion. The bill only says the government is limited to having $700 billion outstanding at any time. By selling the mortgage backed assets it acquires -- even at staggering losses -- the government will be able to buy even more resulting is a virtually limitless financial exposure on the part of taxpayers.) Any proposal must protect middle income and working families from bearing the burden of this bailout.
http://www.sanders.senate.gov/news/record.cfm?id=303317Sanders is right on target, especially the part about taxpayers getting an equity stake in the investment firms they’re being asked to bail out. If the problem is defined as non-liquidity, there are at least 3 ways to inject liquidity into these firms, only 2 of which are being considered during this crisis, both of which let the private sector continue in control of the firms. The first way is to loan funds – this is being done with the $85 Billion loan to AIG. The second way is to buy “assets” from the firms – this is the $700 Billion purchase of bad loans Treasury Secretary Paulson (former head of Goldman Sachs – 1 of only 2 remaining large independent American investment firms) from the firms. The third, is to inject equity into the firms, i.e., to buy a stake, almost certainly controlling, in these firms. The government can own them, and hire out-of-work private sector investment gurus to work in them. After all, it will be the same investment guys working out the problem under the Paulson private-sector favored plan, so why not have these guys working for the taxpayer and the taxpayer getting the profits. Paulson’s proposal is a desperate attempt to prevent a real crisis which would result in a wide-spread uprising of the masses as they realized that the private sector had failed them, had lost their retirement annuities, investments, etc., and which would result in fundamental, pro-government, change in America.
Also, any salesman knows that one tactic to use on a potential mark (i.e. customer), is to create a “sense of urgency” in the mind of the mark that he must buy immediately. Isn’t that what Paulson is doing with his proposal – gotta adopt my plan immediately, this weekend, no time to think about it. Haven’t we heard all of this before, e.g., in the run-up to the Iraq war (Sadam has WMD – we’ve got to act now before the mushroom clouds start appearing over Podunkville America), e.g., in the rush to pass the Patriot Act in the middle of the night immediately after 911 to prevent another attack, and, and this may be a bit obscure, in the creation of the Federal Reserve System by private bankers back in December 1912 (?) when the legislation was rushed thru both houses of Congress in the early AM hours of December 22, and signed into law the next day? I can see why smart people often throw their lot in with the wealthy, not because the rich have smarter people than the poor or a higher moral ground, but because the rich have more smart people than the poor, and the poor are therefore more easily manipulated to act against their own interests. I believe that what’s happening now under the guise of “bi-partisanship”, is simply another snookering of the Democrats. I’m tempted to say “Unbelievable”, but, sadly, it’s all too “Believable”.
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