When we all know that the heads of these corporations have already stashed away their own retirement funds somewhere offshore where the IRS will be hard-pressed to find them?
And why on earth should they walk away with millions and millions of dollars in reward money (forget the term "golden parachute") for destroying venerable old companies?
Rhodes’s plan is fairly radical but she is not the only one proposing it. She suggests regulating the market now and then letting mortgage holders renegotiate the principal on their home loans so that everyone with a bad loan could offer to pay, say, sixty cents on the dollar, more or less, and keep their home. Then, she suggests that individuals be able to do the same with credit card and other debts.
In other words, give Main Street the same options the government wants to give the billionaires.
She also proposes raising taxes on those same billionaires, giving small businesses low cost inventory loans, and lowering taxes on everyone making less than two million a year, while raising taxes on everyone else, especially raising taxes on those with profits worth over 10 million. And she says we need to get out of our 10 billion dollar a month Iraq costs.
Help banks NOW before they fail, forget about the big investment banks that already have failed.
In other words, prop up the people, not the sharks.
Radical? But is it any more radical that Paulson’s?
Not only does Paulson’s plan give him all the authority of an old time sheriff (shoot first and ask questions later)* but it has no provisions for going after the salaries and bonuses made by the very people who helped cause this whole mess! Forgot punitive measures, says our government. We don’t have time for that.
I say we do. You should say we do, too.
There is no way in hell that the men and women of Lehman Brothers and the rest simply woke up one morning and realized, all in a rush, that their companies were going down the tubes. This thing, as many have pointed out, has been roiling and boiling for years.
And no one did a thing to stop it.
If anything, many people did a lot to keep it going.
Including powerful members of our own government.
We certainly can thank Phil Gramm for all his little gifts to the American public, just two of which (that John McCain enthusiastically supported) are that that while chair of the Senate Banking Committee he acted as chief sponsor of the Commodity Futures Modernization Act and the Gramm-Leach Billey Act. This is the same Phil Gramm that McCain chose as co-chair of his presidential campaign and the same Phil Gramm who not too long ago called us a nation of “whiners.”
Article comments
— go to most recent comments1 - Dave Nalle
Lisa, you seem to be missing the big picture here. If the financial sector fails and drags down various businesses with it, not only will we not be able to afford to pay for everyone else's childrens healthcare, a great many adults who currently do have health insurance will probably not be able to afford it any longer.
All of the socialist entitlements you want so much only have a hope of viability if we continue to have a strong economy. If the economy goes then that kind of socialism would only drive us deeper and deeper into debt and a cycle of governmental insolvency which we might not be able to recover from.
I do think that the threat here is somewhat overstated and that a more moderate solution might be possible. But crying over taxpayer funded healthcare and other pipe dreams isn't the answer. As things stand right now those are luxuries we just can't afford now and for some time to come.
This situation has shown us just how unacceptable the self-indulgent spending which the Democrats have championed is, and we're going to have to tighten our belts and institute a real government austerity plan, including a lot of things the left isn't going to like just to survive this.
Social Security is going to HAVE to be privatized. The sham can't be maintained, and the stock market needs the boost. We're also going to have to cut corporate taxes to 15% to increase jobs and draw capital back into the economy. We also need to find a way to get medicare and medicaid under control. Raising the qualifying age and reducing benefits are the minimum which we'll need to look at.
Dave
2 - Les Slater
This is not just a financial crisis, it is a crisis of the private monopoly of socially necessary functioning of society. It is fundamentally a crisis of the capitalist system itself. We cannot afford to leave the financial functioning of society in private hands.
There is absolutely NO EXCUSE that a socially and technically advanced society can’t provide the basic necessities of life, comfort and security to ALL its population.
3 - Dave Nalle
Les, the source of the problem here is not the failure of capitalism, it's the damage done to the system by government intervention in the first place, which created opportunities for graft, abuse and corruption. If the system had been kept truly separate from government and truly capitalist in character there would have been no problem.
There is absolutely NO EXCUSE that a socially and technically advanced society can't provide the basic necessities of life, comfort and security to ALL its population.
You're right, Les. Any advanced society COULD do this. But the US has made the significant moral choice NOT to do so because it is inherently evil to use the force of government to oppress the productive majority for the support of a wilfully unproductive minority.
Dave
4 - Les Slater
Dave,
“If the system had been kept truly separate from government and truly capitalist in character there would have been no problem.”
And you support a further government intervention to deepen this?
“…it is inherently evil to use the force of government to oppress the productive majority for the support of a wilfully unproductive minority.”
I agree. So why use the force of government to forcefully extract $700b from the productive majority to prop up an unproductive gang of thieves that have gotten us to this precipice?
Les
5 - Lisa Solod Warren
Well, Dave, you know for sure I don't agree.
Good news, is that I heard yesterday is that several senators proposed a plan that can cost much less than Paulson's 700 billion.
THAT is what rational thought and a little time and creative thinking could come up with. Plus, as I posted on Marlow's site, a man has offered to oversee the plan, in a different, better form, for free (rather than pay Paulson cronies).
SO! We don't need to RUSH RUSH RUSH as Bush, et al wish us to do, which is the main point in my piece after all.
I mean, look where that got us with the Iraq war and the Patriot Act. People acint out of fear and against their better interests.
WHY does the Bush government seek to make the American public think everything is such an effing emergency?
And, Dave, IF we have so much money for all this shit, why DON"T we have money for things that the American public needs and deserves, like my so-called "socialist" stuff like healthcare?????
6 - Lisa Solod Warren
PS I am thrilled that now Paulson has caved to pressure to limit compensation. Of couse LIMITING compensation is NOT good enough. But it is a start.
7 - Les Slater
“And, Dave, IF we have so much money for all this shit, why DON"T we have money for things that the American public needs and deserves, like my so-called 'socialist' stuff like healthcare?????”
From my #2, “There is absolutely NO EXCUSE that a socially and technically advanced society can't provide the basic necessities of life, comfort and security to ALL its population.”
Dave responds, “You're right, Les. Any advanced society COULD do this. But the US has made the significant moral choice NOT to do so…”
8 - Lisa Solod Warren
That is a MORAL choice? It's moral to bail out billionaires to shore up an economy bilked by greed but MORAL to let people go without health care, especially young children who could be covered for less than 2 1/2 months of the effing cost of the Iraq war? And you call that a MORAL choice?
I call it a dance with the devil.
9 - Les Slater
Lisa,
“Good news, is that I heard yesterday is that several senators proposed a plan that can cost much less than Paulson's 700 billion.”
I get the impression you’re relieved. Why? They’re still trying to shaft us. How many billion do you think they deserve?
Les
10 - Lisa Solod Warren
Hey, Les....I was encouraged that at the least they weren't just gobbling Paulson's plan.
BUT now I am stunned to learn that McCain is effectively BLACKMAILING the Amerian public by refusing to debate unless the bailbout plan is signed by Friday.
THIS IS THE MAN SOME PEOPLE THINK SHOULD BE OUR PRESIDENT? When even conservative Republicans don't support the plan?
I ask again? WHAT IS THE RUSH??????????????
11 - Dave Nalle
McCain isn't blackmailing anyone. He just said he would keep working and not debating until the plan was resolved. There's still 7 more weeks to hold additional debates. If Obama would step up and agree to them, which he won't.
Dave
12 - Lisa Solod Warren
That is bullshit, Dave and you know it. Canceling the debate serves NO purpose. If he wants to be prsident and really help the country, he can take two hours out of the day and do the debate and then get back to "work" on the plan.
It's all political smoke and mirrors, a dog and pony show. (To mix metaphors)
13 - Jonathan Scanlan
Well, I certainly hope you guys don't go with the bailout. Primarily because the market really needs to correct itself, and injecting money into wall street will only delay the inevitable.
14 - Lisa Solod Warren
I don't want us, too. Not that I believe the market will "correct" itself in any real way. I think the market will become something very different entirely.....
15 - Joanne Huspek
I agree with Lisa in that whatever solution to this mess has to be thought out deliberately and carefully. I appreciate the candor of the hearings, but some of the wording of the proposal didn't set well with me, causing me to reconsider. And I think that's the consensus of many, why so many in Congress are now dragging their feet. Their constituents aren't going for this either.
While I can see from the point of some intervention by the government, I am loathe to do it. For one thing, I don't want to see bad behavior rewarded by fat golden parachutes. What is the difference in this ponzy scheme from Enron or WorldCom? Someone should go to jail.
The other reason I don't like the idea of a government prop up is that it doesn't allow the market to correct itself naturally. When businesses falter because of bad management, they SHOULD fail, leaving the good ones behind. This wouldn't work in the case of Fannie and Freddie since they are quasi-governmental agencies.
It would be nice if the people who get the help are the little guys at the bottom of the food chain, but I'm holding out little hope for that.
16 - Heloise
"Gall Street: Pied Piper Paulson Panic Pitches His Plan to Congress" That would be my headline if I wrote an article. That says it all. Also "Just say whoa! to this shit."
I woke up thinking "gall street" because for them to ask for or be in the pipeline for getting 700 Billion dollars is GALL! Use your own damn money Paulson and Bernake and not our money.
Heloise
17 - Dave Nalle
The main effect of McCain's return to Washingotn appears to be to pressure the Democrats to resolve this thing really quickly so that McCain can't get any credit for it. That means more willingness to abandon some of the massive additional spending they wanted to add onto it, and getting rid of that can only be a good thing.
Dave
18 - Lisa Solod Warren
Dave, Dave,Dave
What is the RUSH????????????????????????????
19 - Les Slater
Lisa,
“What is the RUSH????????????????????????????”
Dave feels uncomfortable with the state of the capitalist system. He anxiously feels a taxpayer prop can’t wait. The usual socialism for the rich.
Les
20 - bliffle
It's even worse than stated in this perceptive comment:
In the case of this bailout, the government “would go out and shop for bad loans."
It's worse because what has been proposed is a Reverse Auction whereby the bad loans would come looking for government money!
21 - Lisa Solod Warren
Another GREAT editorial on slowing down.... and thinking for a change.
22 - Dave Nalle
The 'rush' isn't the issue. It's stopping the Democrats from turning this bailout into another opportunity for them to suck billions away from taxpayers as they did with their milking of Fannie Mae and Freddie Mac as their personal piggybanks for years.
Dave
23 - Lisa Solod Warren
Dave. Your facts are so very wrong. The Republican administration and the Republican controlled congress have known about the coming meltdown for the past 7 years and have done nothing to stop it....... You can't possibly blame this all on Fannie Mae and Freddie Mac. Even the Repubs aren't trying to do that....
No one knows where on earth you are coming from, but your grasp of economics is pretty thin....
If you really think the country is ready to put this on the Dems, you are sorely mistaken. They are, at the least, smarter than that.
24 - bliffle
I believe that McCain and other republicans have received sizable contributions from FNMA, etc., differing only in munificence from contributions to dems.
They play both sides of the street, differing slightly depending on who they think will win, in order to ensure a place at the table in the next administration. There's no mystery about that.
25 - Lisa Solod Warren
Dave I heard the most interesting thing on the radio today. Bush giving a speech in 2002 where he said that poor people should be able to buy houses and not just lousy houses but nice houses, good houses like other people even if they didn't have the money or a down payment so HE was making Fannie Mae and Freddie Mac loans available to them, bla bla bla. It was amazing.....
Six years ago. And then to hear him him talk about this bailout as though it just happened.
What a tool.