The Bailout

The Democrats are hitting the right buttons, such as bipartisan oversight of the fund, limits on golden parachutes for failed executives, and relief for Main Street. The deal is not yet final, so we will have to see.

But it seems that two important options are not on the table, and I think they should be.

(a) We could learn from Sweden’s valuable experience from 1992, when they faced a remarkably similar problem (see yesterday’s NY Times and IHT). Rather than buying the worthless assets from the banks at inflated values, the government could buy stock in the banks themselves at the current, low values. This would pump the needed capital into the system to restore balance sheets. It would give the taxpayer a much better chance to be repaid, as the government could resell later at a profit when conditions stabilize. It would remove the reward to investors who let their executives be greedy. Finally, as a stockholder, it would give a real chance to the government to prevent those undeserved golden parachutes.

Apparently, that smacks of “nationalizing the banks”, an anathema, however temporary. Too socialist for this anti-regulation/ pro-bailout government.

(b) We could let the financial system heal itself, and use the trillion dollars to build a modern social safety net and ease the pain to the population. Long term, this would leave the economy stronger and not reward the greed and mismanagement as we are doing now.

Right now, we have to avoid a feeding frenzy on Wall Street when this money is released. Good luck.

Bob

Scandalous Finance

America’s financial crisis was unnecessary. And the scandalous remedy the Bush Administration is pushing through is going to weaken America for the very long term.

But okay, the stock market is up, isn’t it?

Honestly, this unprincipled government does not have a clue about the proper role of government in our affairs. After years of holy “deregulation”- of

- ignoring unethical lending to people who couldn’t afford to pay back,
- letting financial institutions repackage, sell and ingest highly risky “toxic paper” from those loans,
- after years of letting Wall Street walk away with billions in under-taxed bonuses and profits (and asking for still MORE tax reductions for the rich),

the Bush Administration in its wisdom has decided to save the world by once again looting the treasury, this time for the benefit of its comrades on Wall Street.

Scandalous. And we will pay for this for a generation, and will be weakened for longer.

The plan – to borrow $750 billion (probably double that, in fact – nobody knows) from whom? - the Chinese who finance America’s debt – to rush to buy worthless paper from merchant bankers whose greed knew no bounds.

This throws the basic rule of capitalism out the window: those who succeed should profit, and those who fail must take the consequences. Not so in the new Republican world of George Bush. And “deregulation” really applies only when it benefits the friends of the Bush administration.

Juan Peron is the closest historical figure to George Bush that I can think of – a man who ruined Argentina (formerly prosperous) in a decade of jingoism, reckless printing of money, and military chest-pounding. Sound familiar? It should.

The consequences are predictable.

Bob

Alaskans Against Palin

The "Alaska Women Reject Palin Rally" was huge!

In the biggest political demonstration ever held in Alaska, an estimated 1400 people vigorously showed their opposition to bringing Palin's politics to the nation.

Heed the message from those who know.

Bob

9/11 Misused

I am a New Yorker, and an American. I care about 9/11. I was on the first plane out of Amsterdam to New York, six days after the attack. I had to be with the people I care about during that horrible moment.

I understand the pain and suffering the attack caused. I share the horror of witnessing thousands of innocent people die brutally and for no reason, leaving struggling families behind. I honor the brave firemen and police who struggled to rescue as many people as possible. I feel the shock of my country who, until 9/11, viewed its borders as secure. I have deep respect for those who rebuilt their lives after the attack.

But… we also have to acknowledge just how the Bush administration misused 9/11 for its own ends.
- The “Patriots” Act,
- the lies told to justify the invasion of Iraq,
- the infringements on Americans’ civil liberties,
- the introduction of torture as a legitimate government function,
- the institution of government by fear – codes blue, green and yellow in public places, side-by-side with the exhortation “go on with your lives”.

The forces surrounding the Bush Administration misused the fear following 9/11 to re-order our society, politics and values. Fear and unwarranted trust in the government made people accept things they would never have accepted if they had their wits about them.

9/11 matters profoundly. It matters most in HOW you remember it, and the lessons that we will take from it.

Thus far, it seems we have not done too well.

Bob

Conservative Intelligence

See how appalled The Economist Magazine is about John McCain's choice of Sarah Palin.

The September 4 article starts with the headline:

"John McCain’s choice of running-mate raises serious questions about his judgment"

and goes on to:

"The moose in the room, of course, is her lack of experience. When Geraldine Ferraro was picked as Walter Mondale’s running-mate, she had served in the House for three terms. Even the hapless Dan Quayle, George Bush senior’s sidekick, had served in the House and Senate for 12 years. Mrs Palin, who has been the governor of a state with a population of 670,000 for less than two years, is the most inexperienced candidate for a mainstream party in modern history.

"Inexperienced and Bush-level incurious. She has no record of interest in foreign policy, let alone expertise. She once told an Alaskan magazine: “I’ve been so focused on state government; I haven’t really focused much on the war in Iraq.” She obtained an American passport only last summer to visit Alaskan troops in Germany and Kuwait. This not only blunts Mr McCain’s most powerful criticism of Mr Obama. It also raises serious questions about the way he makes decisions."

and ends with

"One of the biggest problems with the Bush administration is that it appointed so many incompetents because they were sound on Roe v Wade. Mrs Palin’s elevation suggests that, far from breaking with Mr Bush, Mr McCain is repeating his mistakes."

Let's hope the American public does not buy this irresponsible maneuver.