|
Editorial -
Skepticism Is Priceless
In Billion Dollar Bailout
Monstrous problem, instant solution: the American government will pump $700
billion into the nation’s economy and in a single piece of legislation salvage
national economic security. No time for details or lengthy discussions. None of
that; America needed lightening quick action, and who better to deliver it than
the Republican administration of George W. Bush.
Well, wait a minute.
Isn’t this the same administration and Republican Party that cleared the way for
this economic collapse by deregulating everything within reach, either by
removing long-standing laws and rules, or by installing true-believing party
functionaries in the watchdog agencies, such as the Securities and Exchange
Commission, thereby assuring the watchdog would be asleep?
But suddenly,
for the past several weeks, they all woke up and began barking and snarling, and
their master, Henry M. Paulson, Jr., secretary of the treasury, began shouting
that the only way to save the nation was to give him absolute czar-like
authority and a budget up to $700 billion, that he could use without questions
from anyone. After all, how could five hundred Congressional lawmakers even
consider hemming and hawing over details while mortgages wallowed and ultimately
sank?
Move now or
risk far greater consequences.
What dangers –
exactly – did America face? Bush & Co. did not go into details. But even
Democrats seemed to agree that the perils were unthinkable, and George W. Bush
assured everyone this was so, and they should trust his treasury secretary, who
after all understood the problem.
But just who is Hank
Paulson, this man who would have liked to become the nation’s mortgage czar,
buying up the over-inflated mortgage paper held by the large banks and financial
institutions that had unquestioningly accepted the now discredited and flawed
financial ‘instruments’ that clever and cynical Wall Streeter’s had foisted on
them and the public.
Hank Paulson became
George Bush’s Secretary of the Treasury on July 10, 2006, but before that he was
Chairman and CEO of Goldman Sachs, having risen through the ranks of that
prominent Wall Street brokerage house, beginning in 1974. It was a rewarding
career; he is now worth some $500,000,000.00.
Before joining
Goldman Sachs, Hank Paulson was a staff assistant to Richard Nixon, 1972-1974,
and before that he was a staff assistant in Melvin Laird’s defense department,
1970-1972.
So, here is the
United States on the brink of another national tragedy being handed panic as
guidance by its leader – G. W. Bush – point out that the only way out is to give
Hank Paulson everything he asks for, which of course means providing him some
operating cash – in this case, some $700 billion in walking around money. But
don’t worry, ‘W’ explained, he can be trusted, therefore there is no need for
specifics.
Many
legislators and regular citizens, however, thought any national plan directly
costing taxpayers $700 billion ought to go through some sort of legislative
debate, compromise and a clear outline of operations.
Quite a few
Americans recalled other panic calls from the Bush White House, however, and
remembered the result when trust was given. After terrorists succeeded in
leveling the World Trade Center New York and damaging the Pentagon at Arlington,
Virginia, America quickly launched a full-fledged war against – Iraq. Instead of
finding Osama bin Laden, the rich Saudi Arabian who sponsored the terror, Bush
went to attack Saddam Hussein and Iraq. Bush held out irrefutable evidence that
Iraq had weapons of mass destruction in its arsenal. Of course there were no
such weapons.
Saddam’s
undemocratic little country was not a good neighbor, but his was a secular
government. On the other hand, bin Laden’s central theme is zealotry; religion
is his bedrock. Saddam and bin Laden were on different planets. Once Bush
invaded Iraq, however, it became a breeding ground for terrorists, many under
bin Laden’s sway.
Another bush
league example of this GOP administration is the mishandling of the disaster
that followed Hurricane Katrina. No federal troops were sent to New Orleans for
five days.
Any person with
a television could easily see that the city was flooded, people were trying to
leave, the Superdome stadium was overcrowded with refugees. Citizens were – in
one case – stopped at a bridge and turned back to New Orleans: at gunpoint by
police representing a mainland community that simply didn’t want to risk having
refugees among them who might become a nuisance or perhaps steal food or
clothing.
This was the
America that the Bush Administration helped foster and show to the world, but
this was not America. It was a reflection of the politics of fear.
It wasn’t
surprising that that was a backlash against the so-called ‘Wall Street Bailout.’
There is no reason to believe that Bush and his administration can tackle and
defeat a challenge to the national welfare. He has failed too often.
And it was a
very good thing that there was some Congressional foot-dragging, because it was
made quickly clear that Hank Paulson wasn’t going to be given absolute power and
a pile of money. He and the Bush Administration did receive the money, but with
stipulations and oversight, but then what happened?
The British,
particularly, and the Europeans secondarily, began to deal with the systemic
effects of the world-wide economic crisis and they took another course of
action. They bought interest in the banking industry, thereby infusing capital
where it was in fact most needed so that confidence among lenders could be
restored.
Hank Paulson
and George Bush, who hollered so loudly that immediate action was needed to
solve the mortgage crisis, now dithered and frittered away weeks of vital time
before finally agreeing to following the British example.
Why did they
pause? Perhaps because they were interested in a plan that would benefit Wall
Street first, and the credit markets second! Such is the value of the trust they
asked for by again employing panic tactics to force immediate, unthinking
reaction.
W. Finucane & M. Bradley
October, 2008
|
