Let Them Eat Cake

I interrupt the film postings from TIFF to bring you my thoughts on the current economic crisis and proposed bailout.

We are all hearing about the financial meltdown of the big investment banks: Lehman Brothers, Goldman Sachs, Morgan Stanley. We are also hearing about the proposed bailout of this system by the government.

I am not an economist nor a financial scholar, sometimes wish someone would bail me out financially, but there are things going on here that interest and concern me. I also think the majority of the American people are suffering from personal economic exhaustion or they would be much more vocal regarding what is being proposed.

One important thing to be aware of is that the proposed bailout ($700 BILLION!) of the investment banks with taxpayer money was written by Henry Paulson Jr. (Bush’s Treasury Secretary) and has the stamp of approval from Ben Bernanke, head of Federal Reserve. Now, lest you think that because of their positions and that they obviously know more about it than you do, here are a couple of interesting quotes from Mr. Paulson (from The Progress Report, Sept. 23, 2008):

“Our institutions, our banks and investment banks, are strong.”
— Treasury Secretary Henry Paulson, 3/08

VERSUS

“The events leading us here began many years ago, starting with bad lending practices by banks and financial institutions, and by borrowers taking out mortgages they couldn’t afford.”
— Paulson, 9/23/08

The track of these quotes leading to the current proposal goes: Bad mortgages, bad lending practices, banks are in great shape, banks are now failing and need us to foot the bill for their greed. In other words, he wants us, the average American taxpayer to eat it financially while paying for their (investment banks and their CEOs) cake.

Do you think there will come a time when Americans say “Enough?” “We’ve paid enough.”

We’ve had “free market” bullhorned at us, telling us to buck up, deal with it, if you work hard enough you’ll get what you want, blah, blah, blah and now those “free market” folks don’t want to play by their own free market rules. Economists all over the country are saying that there are alternatives; we don’t have to give handouts to investment banks, there are other, more rational and practical ways to deal with this.

“But leading economists and financial analysts argue that there are a host of alternatives that would reduce taxpayers’ liabilities and perhaps more effectively address the urgent crisis in financial markets. Although these experts concede that the clock is ticking, they say other approaches have been dismissed too quickly. . . .

“One approach seeks to reduce taxpayers’ liability by offering collateral-backed loans to troubled banks, leaving them to work out their own solutions. Another idea is to have the government set up a profit-driven investment fund with the aim of infusing the financial system with cash without taking on bad debt. Still others suggest radically different tactics of directly helping homeowners by reducing mortgage principal or bolstering banks by suspending capital gains taxes. . . .

“‘They presented this as a comprehensive, decisive solution, but it’s clearly not comprehensive and probably not decisive,’ said Simon Johnson, a former chief economist at the International Monetary Fund and a professor at Massachusetts Institute of Technology. (Anthony Faiola and David Cho, The Washington Post)”

Write/call your Congressman and tell them that you want them to take their time on this! We should be as skeptical as we can possibly be about anything the Bush Administration is proposing — remember Iraq and WMD? Remember National Security and wiretapping? Remember Patriot Act and the erosion of your civil rights? Don’t do something fast, do something RIGHT!

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