The Next Bailouts
Monday September 29, 2008
Banned Books Week began on Saturday (related: Top 10 "Obscene" Literary Classics), but the hot topic of the weekend was a proposed bill that would allow the president to spend up to $700 billion on corporate bailouts, primarily targeting the banking and loan industries. I'm not an economist, so the details on the specific conditions of the bailout are better left addressed by my colleague Kimberly Amadeo of About.com: U.S. Economy, who has put together a quick and easy guide to the largest proposed private-sector bailout in U.S. history.
But the generalities do have civil liberties implications. Among them...
Related: What is Community Organizing?
But the generalities do have civil liberties implications. Among them...
- The Imperial Presidency: One of the frequent criticisms made of the bailout proposal is that it doesn't contain adequate checks and balances--that it gives the president too much latitude on how this massive amount of money is to be spent when Congress is really supposed to control the budget. Is this one more sign that the executive branch, the most dangerous of the three branches of government, has grown too powerful?
- Capitalism and Civil Liberties: Right-wing libertarians argue that the government should let free market capitalism do its work, but bailouts are, literally, a form of socialism--the government buys private industry, and it's owned collectively by the taxpayers. Paleoconservatives and right-wing libertarians have argued for decades that the neoconservative movement is not adequately committed to the pure capitalism of traditional fiscal conservatism. Does this bailout, which will bring the national debt close to $12 trillion, prove it?
- A Question of Human Rights: From universal health care to early childhood education to the levees in New Orleans, the U.S. government's position on what most U.N. documents agree are basic human rights--to food, shelter, education, and health care--has traditionally been that there are some people that it just can't afford to take care of. Yet in a country where 45 million people have no health insurance and entire local communities are denied a meaningful education, where prisons lock up lawbreakers in human kennels instead of trying to rehabilitate them, and where Social Security provides what could only generously be called a subsistence income--why is it that as soon as the wealthy call for a tax cut or civilian defense leaders want to invade a country or a bank needs bailing out, our leaders in Washington suddenly discover trillions of dollars worth of unspent revenue? What does that say about our leaders' commitment to human rights?
- Predatory Lending and the Civil Rights Community: And then there's the question of whether all of this is ultimately an example of economic karma in action. Organizations like ACORN have complained about predatory lending practices and subprime mortgages for years and years, arguing that it would ultimately destroy the economy in addition to the lives of those exploited by these practices, but gone ignored because community organizers are not taken seriously by the Washington establishment. But it turns out they were right where Greenspan, Paulsen, and Bernanke were all wrong--and if the government had listened to the civil rights community years ago, none of this would have happened. Doesn't the government owe ACORN and other groups an apology? And does this whole crisis indicate that a government that ignores any subset of its population--including the poor--will ultimately suffer financially for it?
Related: What is Community Organizing?
Comments
“For my part, I understand the necessity of the bailout now–but I don’t see why the corporate leaders in question didn’t see it coming a mile away”
Well, maybe you’ll explain this “necessity of the bailout” to the rest of us, since I, as a Ph.D. economist and [if you’ll check the Forum thead on this] about 200 other academic economists holding positions in top universities don’t see any such “necessity.”
Let me ask you a simple question: “If McDonalds and Burger King announced tomorrow that they would be closing at the end of the week, would a government bailout be necessary in order to assure the supply of hamburgers to the rest of us?” If your answer is “of course not,” then just why is this bailout a “necessity”?
You know, it is about time that Americans, including “Guides” on about.com, became a bit more tough minded, and stopped chanting slogans just because they are the trendy thing of the day.
Why give more to the rich? It would’ve made more sense to start from the bottom up. I’ve read/heard people would’ve received up to $200,000 apiece. I think that those of us who couldn’t even imagine that amount in 10 years work, would’ve done more than take a vacation. We would have paid the bills we haven’t been able to pay the last 2 years and maybe buy homes that didn’t account for nothing and leak like seives. I actually have a low debt in comparison to some but due to the fact I purchased a trailer I don’t have collateral so I can’t get any help and yet I make too much to get social services. I am sick of paying taxes to people who waste it. I’ve been a single parent for 18 years. I didn’t get child surport because I thought it safer to hide for my son’s sake. Now I am left with all the bills and no way to get them paid since he has moved out on his own. As an epileptic I am only strong enough to hold down one job. We needed the help not them!! I don’t get disability either, by the way! I’m so tired and ready to give up. Would not giving a helping hand to those of us who actually work been a better solution? Money that would’ve went back into the system.
Good job regarding Civil Rights.