It's true that my first reaction to anything coming out of the Bush administration is to mistrust it. I always start with the premise that Bush has an agenda of multiple wants, most hidden. That's Bush. As the son of an ex CIA head, he's comfortable with the covert.
That being said, Bush has tossed the public a new unsolved mystery. And here we go again. We are off. The new Bush crisis has as much urgency to solve as bombing Iraq--at least that's the alarm. We are doomed if we don't act immediately. That's Bush. Using reason seems to be for elite squares. Being a dude bully gets people's attention. I guess your approach depends on your motive. You can move faster in carting off the goods and eroding the Constitution (a elitist document that's boring to read) if you're a dude bully.
It's true the Paulson plan to get the economy moving is an outrageous attention getter. But why not? You go for the big catch. If you get 1/2 of what you're asking, you've come out well. If you get it all, you call yourself a god. Gee what a deal for us. For the next x amount of years, we'll hear the excuse we have to sacrifice to pay off this debt. There goes the neighborhood! There goes our children's college education! There go our roads and bridges! There goes health care. Thus at the foundation Paulson's plan is extraordinary unpatriotic to America but extremely loyal to Bush and the very wealthy class.
This condition is a real test for the American citizens. Are we going for a business takes all approach to solve the problem or are going for a we the people approach to solve the problem? Who comes first? It's really our call in the end. Do we want to be peasants carrying our bags of gold to the castle, or do we want to continue our work toward creating a true participatory democracy?
We have several options that aren't on the open table right now. Let's pause and take a look at the various solutions. There is never just one even if Paulson wants us to think it's his way or the toilet. We don't have to flush more money, more rights and more power. We should be protesting in the streets by now. We should be marching in Washington. We should be clogging the phones and emails of those in office.
Our first option: We could Just Say No. This is as much of an attention getter as Paulson's plan. And it's an excellent place to negotiate from. Saying no to the plan outright gives us position and opens up a lot of options between Paulson and we the people.
The economy isn't going to collapse in five days if we don't give up our hard-earned money for our schools, health care, parks and roads, medical research, science research, etc. It isn't even going to collapse by the next election cycle. And what if it did? In the worst case scenario, we would come to a short-lived standstill. We're a nation of smart people. We'd get up very fast. Keep in mind up to $100,000 in the bank are insured no matter what happens to the economy. Let the wealthy cut their profits and savings. Let them sell some of their gold seated toilets and some of those extra homes they own. Let them cut back on their vacations and get rid of a few zeros in their personal bank accounts. Put the entire burden on those who caused it and those who have made a fortune off the rest of us. Let the wealthy make the sacrifice this time. Let's consider people first. We need massive and continuous protests to get heard. Otherwise, we have been duped into acting like peasants: simply doing as we are told.
Our second option: We could go into the real estate market. Sweden did it in 1992 and succeeded. We could own those companies and not just their debt. We could own everything we buy. That means absolutely no bailout money to the current owners.
A Variation of this Option: In 1992 Sweden took a more rationale approach and tried to put taxpayers and not the CEOs of banks first.
That strategy held banks responsible and turned the government into an owner. When distressed assets were sold, the profits flowed to taxpayers, and the government was able to recoup more money later by selling its shares in the companies as well.
“If I go into a bank,” said Bo Lundgren, who was Sweden’s finance minister at the time, “I’d rather get equity so that there is some upside for the taxpayer.”
Sweden spent 4 percent of its gross domestic product, or 65 billion kronor, the equivalent of $11.7 billion at the time, or $18.3 billion in today’s dollars, to rescue ailing banks. That is slightly less, proportionate to the national economy, than the $700 billion, or roughly 5 percent of gross domestic product, that the Bush administration estimates its own move will cost in the United States.
See complete article.
Our third option: We could demand a severe drop in all interest rates (that includes credit cards) to try to get people to stay in their homes. And we could demand banks sell foreclosed homes back to the people who lost them with a one year "return" plan and a locked in rate. In offering people the same interest rates they bought at, the economy might start to stabilize. At the same time, we can demand a patriotic drop in oil prices, food prices, and other stuff prices. Let's see business roll up its sleeves and show their support for country first and not profits first.
The Bush administration wants to inject the credit system, so we will feel good again about shopping--on credit. But is more credit really the answer? I can't help but think a part of Paulson's deal has come about because the banks want to increase interest rates--a lot--right now but can't because of all the foreclosed homes and other unpaid debt. That is not our problem. It is not our problem that CEOs can 't make as much money as they would like to.
How about removing the temptation to raise interest rates today? How about putting a moratorium on interest rate increases across the board no matter which plan is finally adopted? How about a ten-year plan? That should lift confidence among consumers.
Such a plan should demand a severe decrease in credit card interest rates and a decrease in home mortgage and home equity interest rates to what they were in 2004-2005. With lower interest rates, people would have money to pump back into the economy. How's that for unclogging a market stuffed with an abundance of credit debt.
And let's not forget that people can't pay these outrageous credit debts because of their low wages. Credit is not a substitute for decent wages. Credit is not a second income.
There are multiple solutions to this problem. The knee-jerking solution is not the only one and rarely the best one. It's the quick fix one, the one that hides the real problem in hopes it will go away. It's a kind of cover up approach in itself. While the Bush administration seems hopelessly addicted to these kind of behavior, Congress should pause and let the next administration deal with the issue.
And then there's the timing of this crisis. It's so clearly a planned crisis event for reasons having nothing to do with what we think that we really should stall this one out. First, Lehman Brothers pretends to be going down at the time of sale to another company. Second--oh wait this was first--the government tests the waters to see how the public will react to Freddie and Fannie. When that seems to be okay, it lets the AIG lord demand its gold bag from us. Is Wall Street the New Feudalism? Is this how Feudalism gets transformed in a democracy? Our the enormous corporations our lords? And are we the peasants whose only duty to the lords is to work and hand over our gold in the form of wages to the markets?
The Bush/Paulson plan is destined to fail because it doesn't address the real issue. It skirts it and hides it. Moreover, it gives Wall Street another drug injection to continue its lordship role and demands we the people wait for another eight years for our services while the next administration tries to pay off the debt created by the current administration. Perhaps we need to empty part of the bank accounts of the corporations to pay off the debt. Now that's something of value they could produce.
Tell me, when the Bush/Paulson plan fails, who will be asked to foot the bill to save the next crisis the wealthy class gets themselves into because of the addiction to power, money and lordshipness?
Let's prove Abraham Lincoln right when he said, "Public sentiment is everything. With public sentiment, nothing can fail. Without it, nothing can succeed."
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