I just read the proposed regulation that Atrios pointed to, and he's right, this is a $700 billion blank check for the Bush administration and the financial elites. Glenn Greenwald notes the pacing of the discourse is identical to the run up to war. The political system is engaged in a massive transfer of wealth to corrupt actors with no debate (except in the foreign press and in the blogs) with no details made public. Furthermore, the Democratic leadership is entirely complicit in what is happening.
The fact that Democrats are on board with this scheme means absolutely nothing. When it comes to things the Bush administration wants, Congressional Democrats don't say "no" to anything. They say "yes" to everything. That's what they're for.
They say "yes" regardless of whether they understand what they're endorsing. They say "yes" regardless of whether they've been told even the most basic facts about what they're being told to endorse. They say "yes" anytime doing so is politically less risky than saying "no," which is essentially always and is certainly the case here. They say "yes" whenever the political establishment -- meaning establishment media outlets and the corporate class that funds them -- wants them to say "yes," which is the case here. And they say "yes" with particular speed and eagerness when told to do so by the Serious Trans-Partisan Republican Experts like Hank Paulson and Ben Bernake (or Mike McConnell and Robert Gates and, before them, Donald Rumsfeld and Colin Powell).
This is the moment when a Democratic candidate for Congress could stand up and call bullshit, as several did during the FISA debacle. Dean Baker has a proposal on what the right kind of bailout looks like. For my money, I'd throw in a massive tax hike for the wealthiest so they pay for the crap they caused (or just use Dean Baker's financial transaction tax and call it a 'speculator's tax), and a total revision of the bankruptcy code for ordinary people so that working Americans are allowed to have financial problems without being enslaved for the rest of their lives.
Now is a moment when a smart politician could put outrage on youtube and see it go viral. This is bullshit. And some leaders should step forward and use that word.
(Benny in the comments notes that it's worse than a $700 billion blank check, it's a revolving line of credit.)
Update: Here are proposed statements:
This is a corrupt blank check for $700 billion that will in all likelihood simply be put in the hands of the people who caused this mess. It puts too much power in the hands of the Federal Reserve with no controls (no legal review at all, and only semi-annual reports to Congress), with no promises to help the actual people who were tricked into crappy mortgages and no promises of greater transparency or regulations on Wall Street.
Congress does exist. At some point, it should accept responsibility for legislating.
Hillary's statement (which is pretty good) and other proposed statements are on the flip.
"blank check to bail out banks"
"no help for homeowners, but 700 billion for bankers"
"The screwups who blew it are in charge of the cleanup?"
"Why do homeowners lose their houses, but CEOs not loose their banks?"
"free money for banks, no money for homeowners"
And here's Hillary Clinton:
When the American people, facing a foreclosure crisis and struggling economy, turned to this administration for help, the answer was no. Now, the administration is turning to the American people for help, to rescue the credit markets and take on hundreds of billions in debt and financial obligations as a consequence of that same foreclosure crisis. The truth is, Main Street came to Washington and got little. Now Washington is coming to Main Street and asking for a lot. The American people deserve to know that this isn't a blank check. While the need to address the current crisis is clear, I will only support steps that will prevent a widening crisis, tackle the worst kinds of abuse tolerated for too long by the Bush administration, and address the root problems at work.
The proposed intervention outlined today by Treasury Secretary Henry Paulson would be a watershed moment for our economy. I believe that such an intervention demands that we fundamentally alter the priorities and policies of our nation under the Bush administration that allowed this crisis to take place and escalate. Corporations that will benefit must be held accountable not only to large shareholders but also to the American people. And American taxpayers deserve to know that their money will not allow for a continuation of the status quo: short-term profit at the expense of long-term viability; obscene bonuses and golden parachutes regardless of performance; reckless risk taking that have placed the markets in so much jeopardy; rewards for those who foreclose on middle-class families and sell mortgages designed to fail to turn a profit; and outsourcing of good jobs to serve short-term stock prices instead of America's long-term economic health. The prevailing dynamic of corporate America, where the sole priority was the dividend, the inflated bonus and the quarterly earnings report, must give way to a new respect for the long-term prosperity of the American worker and the well-being of the middle class.
After eight years of failed policies - and two years of an absentee administration - our only option left may be an unprecedented government intervention into the private markets. The markets must be stabilized to stave off wider turmoil. Nevertheless, the urgency of this crisis does not mean that we should offer a blank check to financial institutions or the privileged few. Nor can we simply allow the administration to use the taxpayers like a "reset button." We cannot allow Wall Street to act without oversight by a vigilant SEC and administration - and without regard for the American people, who will now have paid twice: in falling prey to a widening credit crisis, and in paying the bill to hopefully bring it to an end.
I will be examining the administration's proposal very closely to ensure that we do not approve a policy that may stabilize the markets in the short term without addressing the root problems facing middle-class families or the kinds of reckless gambling that was permitted for far too long by the administration. The Bush administration may have changed its tune once the crisis facing Main Street hit Wall Street. But we need to be sure that the American taxpayers - asked to shoulder yet more risk and responsibility - have a voice.
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