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Wednesday, October 01, 2008

(Updated) Bailout Bill: Pressure Bingaman et al. to Back DeFazio, IPS Proposals

Update: Another good (pdf) has been developed by the Institute for Policy Studies. You can contact members of Congress about that plan courtesy of PDA.
I'm not surprised, really, that Sen. Jeff Bingaman stated in remarks made to radio reporters that he would have voted for the boondoggle Wall Street bailout bill that failed in the U.S. House. But it still angers me. In fact, I find it appalling.

Bingaman claims he could support it because it was an improvement over the original proposal that made Treasury Secretary Paulson king of the U.S. -- sans any meaningful oversight, transparency or accountability for any of the crooks who got us where we are today. Not to mention there was no help whatsoever for the poor working slobs suffering the aftermath of the fraudulent mortgages and crackpot trading. Well, I guess almost anything could be considered better than the original bill. But that doesn't make the incredibly flawed and inadequate "compromise" bill acceptable to ordinary people. We're sick and sick and tired of huge sums flowing to the top of the pyramid -- while those holding up the bottom are left bereft, virtually without recourse.

Senate Makes "Brilliant" Proposal
The latest developments in the Senate, however, have made voting on the original "compromise" a moot point. The Senate, in all its alleged wisdom, has come up with an even more stupendously craven "solution." Do I have to tell you that it involves -- hallelujah -- more tax cuts and relaxed regulations for financial institutions, along with the $700 billion bailout? Bingo! That'll fix things. Or at least manage to shovel more assets to the cream of the crop speculators and thieves -- to those who devised the most virulent, cancerous form of the greedy organism that's passed as "free market capitalism" for the past couple of decades. Once again, we'd be left waiting for the "trickle down" to reach the bottom of the barrel where we reside. We need to trust them. They have only our welfare in mind.

The AP reports that Sen. Chuck Schumer actually had the nerve to describe this new Senate gambit as "brilliant," predicting that it would "help pick up votes on both sides of the aisle." Who can resist more tax cuts when the deficit is exploding into the trillions and two wars are still sucking up more than $10 billion a month? Who can reject allowing financial institutions and megacorps to return to the system of accounting that permitted them to cook their books during the era of the Enron scandals?

Get this:

The new approach, announced Tuesday night by Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky., would tack large and contentious tax measures to the bailout bill. Senate leaders figure the House will have to approve it because the tax cuts are too appealing to Republicans and the financial rescue plan will still seem essential to most Democrats.

Of course there are a few crumbs being considered as toss-ins for the working people of America, like expanded unemployment insurance benefits or funding for jobs to rebuild the infrastructure. But it's clear that most of the current "compromising" is aimed at gaining Republican support -- not attracting real Democrats, a few of whom actually do still exist.

DeFazio's No BAILOUTS Act
A different approach and one many real Dems are supporting has been proposed by Rep. Peter DeFazio and other members of Congress to restore confidence in the financial markets. The new bill, called the "No BAILOUTS Act" (Bringing Accountability, Increased Liquidity, Oversight, and Upholding Taxpayer Security), is being introduced by Rep. DeFazio (OR-04), with Rep. Kaptur (OH-09), Rep. Scott (VA-03), Rep. Cummings (MD-07), Rep. Doggett (TX-25), Rep. Holt (NJ-12), Rep. Edwards (MD-04) and Rep. Hirono (HI-02).

SEIU, among others, has come out in support of this approach. You can read about its basic components here. I don't pretend to understand all of it, but I respect those involved and can get behind the idea that Wall Street should pay via a securities transfer tax. As reported by Investment News:

The proposal includes boosting FDIC insurance limits on bank deposits, changing the Securities and Exchange Commission rules on mark-to-market fair value accounting, launching a net worth certificate program, resurrecting the old security transfer tax and introducing a mechanism to stem to the flood of foreclosures, among other items. ... Among the group’s proposals is a security transfer tax, similar to the one used from 1914 to 1966, which helped fund reconstruction projects during the Great Depression.

He [DeFazio] estimates this tax, at 0.25%, would raise $150 billion a year.

This way, investors will pay for the bailout “in tiny, tiny increments,” Mr. Defazio said. Also, the group believes changing the SEC’s fair value accounting program would go a long way to easing the credit crunch that banks are facing.

What Should We Do?
Anything can happen in the next couple days, of course, and nothing is set in stone yet. I think the best thing we can do at this point is keep the pressure on any and all members of Congress, and make sure they are fully aware of the anger that's out here in the hinterlands about the essential injustice of the approach being pushed by the money monarchs. I think it's a good idea to push for support of the DeFazio proposal and demand any bill include meaningful and significant help for ordinary Americans. Go get 'em:

Congress.org makes it easy to email the people who count on this. Or click here to find phone numbers and other contact info for New Mexico's Congressional delegation.

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October 1, 2008 at 11:39 AM in Business, Corporatism, Crime, Economy, Populism, Government | Permalink


Another swing to the right is just not what this country needs.
I am truly concerned about my child's future prospects for education and employment, and fulfillment. I am even concerned about keeping him fed.
Manufacturing will return to this country but we won't need our populace to be educated because they will be working inhumane hours for less than minimum wage in factories owned by multinational corporations.

Personally, I am in trouble as my 401K has fallen a great deal. I am currently living on my 401K. I wonder at the looting of baby boom retirement at this time. We may be looking at an impoverishment of our elderly that will change our culture for the worse toward dispassion. The REPS of Texas have been busting retirement accounts for decades and now their looting has occurred nation wide.
The DEMS are passing up an opportunity to remake our inequitable and unsustainable system. It looks like they are going to continue with cowardice.

Posted by: qofdisks | Oct 1, 2008 12:52:09 PM

The Congress is supporting the very worst ideas for helping the economy and ordinary people. There are many better proposals out there and they know it. If Obama and Udall vote for the Bush version of the bailout instead of standing up for the people I might stay home this November. What will it matter? I've voted straight Democratic ticket in every election since I came of age but not this time if they side with greedy Wall Street.

Posted by: Old Dem | Oct 1, 2008 1:08:55 PM

Democrats have the power on this one. They could have held out for real change that attacks the rotten underpinings of the financial system but they aren't doing it at all. They are rolling over to Republican demands at every turn. How did we get so many cowards calling themselves Democrats?

If they pass the bailout with the buying of toxic "assets" intact nothing good will happen except that more of the cronies will get bucks as we go down. The rest will fall anyway only we'll be $700 B more in the hole. What are they thinking? Why do they believe Bush and his handpicked bosses?

Posted by: L.B. | Oct 1, 2008 1:31:50 PM

If we win in the elections, what money will be left to do anything for the people-for health care, education, jobs, communities? We will be trying to clean up another Republican mess with not many resources. Don't think it is a coincidence it is coming out this way.

Posted by: roadrunner | Oct 1, 2008 2:43:43 PM

It is shocking and disheartening to read what our senators are doing. I am not sure if they are cowards, I am thinking they know full well what they are doing and agree with the top down theory. We have been busting our asses for 4 years and this is what it is coming down to.
Didn't the treasury flood like 500 bil into the fed system on Monday night??? and they are still talking about 700 bil more...what the F... is going on.
My sincere hope is that Bingaman votes NO on this bill, I am sure it is what his constituents are telling him. But it may not be what his fat cat lobbiest pals are telling him.
I have three words for us....
We are fucked.

Posted by: mary ellen | Oct 1, 2008 3:06:19 PM

What can we do when Democrats turn against the people?

Like mary ellen says they already pumped big cash into the system a couple times, took over Fanny Mae and Freddy Mac, "saved" other nitwit institutions and now more is needed? When does it end? You know this won't work and they will be back for more. They want to bankrupt the treasury for years to come. I think it is a plan.

Posted by: Josie | Oct 1, 2008 3:15:35 PM

Americans are gonna get a nasty wake up call when they finally get what's being done. It will be too late. No shopping no more kiddies.

Posted by: KR Russo | Oct 1, 2008 3:44:44 PM

I listened to Obama give his speech and he was eloquent but wrong. He listed many things that had to be done to help working people but none of them are in this bill. Why not? I hate to say it but Obama is standing with Wall Street. The rest of us can wait until later.

Posted by: Old Dem | Oct 1, 2008 4:54:19 PM

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