by Randolph T. Holhut
American Reporter Correspondent
September 25, 2008
BAIL OUT MAIN STREET FIRST!
DUMMERSTON, Vt. -- It's always time to worry when you hear that something has to be done, and done right away, or else a calamity of unimagined proportions will strike.
And it's definitely time to worry when the people saying something has to be done right away are members of the Bush Administration.
After 9/11, they pressured Congress to rush through the Patriot Act, demanding that Americans hand over their freedoms in the name of national security.
In the fall of 2002, they pressured Congress into voting to authorize an invasion of Iraq using trumped up and ultimately false stories about Saddam Hussein possessing nuclear, chemical and biological weapons.
In the fall of 2006, they pressured Congress to pass the Military Commissions Act, which ended the right of habeas corpus, again using the specter of terrorism as a reason to do so.
Now this fall, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke are pressuring congressional leaders to approve a $700 billion bailout of the financial markets as soon as possible to prevent a global economic panic.
The parallels between this bailout and the Patriot Act, the authorization vote for the Iraq invasion and the Military Commissions Act are easy to spot. Take advantage of a crisis, and use it to get something you want that you would not be able to get without the crisis.
This crisis was the culmination of nearly three decades of deregulation and privatization. The next step could be worse.
Dumping private debt into the public coffers will create a debt crisis that may become the excuse to privatize Social Security, lower corporate taxes and cut spending on the poor. Here might be the opportunity that conservatives have dreamed of for the past eight decades - to ram through radical pro-corporate economic policies while starving social welfare programs until they die.
So before Congress is pressured into approving a deal that will be a disaster for the average American, perhaps they should consider Vermont Sen. Bernie Sanders' ideas.
Sanders has proposed a surtax on the very wealthy to help pay for bailouts of Fannie Mae, Freddie Mac and American International Group - a five-year, 10-percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. He said that would raise more than $300 billion in revenue.
He also wants stronger oversight of financial institutions. That means reinstating the regulatory firewalls that were ripped down a decade ago, re-regulating the energy markets to end rampant speculation in oil and regulating or abolishing various financial instruments that created the enormous shadow banking system at the heart of the current financial crisis.
The giant financial institutions such as Citigroup and Bank of America should be broken up, Sanders said, so that no one company in the future could bring the American economy down with it.
Finally, Sanders is calling for a major economic recovery package which puts Americans to work at decent wages, puts people back rebuilding our crumbling infrastructure and moves us to energy efficiency and sustainable energy.
There is nothing radical in any of Sanders' proposals. Conservatives will scream over his surtax, but in reality, Sanders is merely asking that the people who benefited the most from the financial bubble pay their share of the cleanup now that the bubble has burst.
According to Sanders, the richest 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president.
While this was going on, Sanders said that nearly 6 million Americans have slipped into poverty in the past eight years, median family income for working Americans has declined by more than $2,000, more than 7 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an all time high, total consumer debt has more than doubled, and we have a national debt of over $9.7 trillion dollars.
The result of eight years of huge tax breaks for the rich and the wholesale deregulation of commerce has been massive redistribution of wealth from the middle class to the very wealthy. Sanders' proposal is simply rebalancing the scales and taking the burden of the financial meltdown off the backs of the middle class.
There should not be bailouts for the rich or the companies that created the financial mess, without first making them pay their fair share of the cost. And, if the federal government can suddenly find $700 billion to prop up the financial markets, it can find money to protect working families from the difficult times they are now experiencing.
Randolph T. Holhut has been a journalist in New England for nearly 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.