Campaign Updates and Media Headlines 9/22/08
Paulson Bailout Plan a Historic Swindle (by William Greider, The Nation)
Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting theWall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?
If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
Well, Bill, sadly for us liberals, in the Democratic primary your magazine backed Barack Obama, who is the most accommodationist of Democrats. What will the Democrats do in this crisis? Practically nothing, and claim it’s a great success. One of the most supposedly liberal publications in the country will have helped it to happen. And if you’re looking to Main Street for that “tidal wave of righteous anger”, don’t expect it to be leveled at the people who deserve the anger. See below.—Caro
Almost 50 years of right-wing propaganda has been an enormous success:
A Sense of Resentment on Main Street (Washington Post)
The bailout doesn't smell right to the people of Manassas Park, where the foreclosure signs are as common as azaleas. They know all about bad debt here. This is a terrain of oversize dreams, misjudgment, financial calamity -- and empty houses. "Foreclosure. Foreclosure. Foreclosure," said Ed Merkle, 58, as he pointed to the "for sale" signs lining his street… "I've been financially responsible with my own money. Why should I now be responsible for the fact that you were not?" he said.
This may be a Main Street bailout backlash in the making. The details of the financial crisis are still hard for most people to follow -- what with talk of exotic "derivatives" known as "credit-default swaps" and so on -- but the central fact of the matter hasn't been lost on anyone in this Northern Virginia community: The taxpayers are on the hook for the bad judgment of others.
Whose bad judgment are we really dealing with? Those who made tons of money by lending to people who are bad credit risks, that’s who, and those who aided and abetted them by creating and selling the aforementioned “exotic derivatives”. But who gets blamed? Not the Masters of the Universe who created the mess, oh no! IT’S POOR PEOPLE’S FAULT! So sayeth the Washington Post.
Do you understand the significance of that misdirection? It means we may never reach a critical mass of people so fed up with the so-called leaders who got us into this that we FIRE their asses.—Caro
McCain calls for limit on pay to CEOs of failed Wall St. firms; Obama lays out six reform principles (On Politics, USA Today)
The major presidential contenders continue to talk about the nation's financial crisis and the rescue plan being put together in Washington:
• Republican nominee John McCain just told a crowd in Scranton, Pa., that he is "greatly concerned that the plan gives a single individual (the Treasury secretary) the unprecedented power to spend $1 trillion without any meaningful accountability…" McCain also said called for "a high level oversight board to impose accountability and establish concrete criteria for who gets help and who does not." And, he said "the firms we help need accountability too. We cannot have taxpayers footing the bill for bloated golden parachutes like we see in the Lehman Brothers bankruptcy, where the top executives are asking for $2.5 billion in bonuses after they ran the company into the ground. The senior executives of any firm that is bailed out by treasury should not be making more than the highest paid government official."
• Democratic nominee Barack Obama, his campaign says in a statement sent to reporters, will today "deliver a major policy address to lay out his plan to reform the greed and excesses of Washington so that we never face an economic crisis like this again." He's due to deliver the speech in Green Bay, Wis., around mid-day. Update at 12:50 p.m. ET. In his speech, Obama outlines six principles for reform.
Click through to read the six principles. Here we are once again, with McCain sounding action oriented and Obama sounding process oriented.—Caro
Last Year's Big Five Wall Street Bonuses (by Jake Tapper at Political Punch, ABC News)
As the Bush Administration asks for close to a trillion dollars to prevent a worldwide financial cataclysm, here are some numbers you might find interesting -- courtesy of the ABC News Research Center and ABC News' Barbara Paulson. In 2007, Wall Street's five biggest firms-- Bear Stearns, Goldman Sachs, Lehman Brothers, Merrill Lynch, and Morgan Stanley - paid a record $39 billion in bonuses to themselves. That's $10 billion more than the $29 billion loan taxpayers are making to J.P. Morgan to save Bear Stearns. Those 2007 bonuses were paid even though the shareholders in those firms last year collectively lost about $74 billion in stock declines --their worst year since 2002.
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