We have said before that this program is an inefficient, covert way to recapitalize the financial system. If I were a foreign central bank, I'd have a lot more confidence if the US imposed regulatory reform, took over dud banks, got rid of top management, and then did the good bank/bad bank split. That's a model that has worked and could be modified and improved. But for some unknown, the powers that be are refusing to employ formulas that have worked and prefer their own home-cooked brew.
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What I want to see is a series of reforms that put a stop or extreme constraint on the whole financial system so that investment goes back to basics, i.e. investing in concrete stuff like infrastructure, manufacturing, affordable housing, transportation, schools, heathcare system, and urban development, etc.
Then second, how about re-conceiving the problem of the bailout from one of a top down solution, blindly buying up junk just to keep credit flowing, to one that starts at the bottom instead? How about thinking through how `mainstreet' is dependent on the financial markets of Wall Street and restructuring that relationship and protecting the bottom, or at least vastly insulate it from present and future excesses.
This constant drone of fast, fast, act fast, do it now before it's too late smacks of the same political manipulation that proceeded the war in Iraq. Screw it. So what if there is a credit crunch for a few months? Eat it.
I know directly what that means. It means that the business I work for may go under because the owner can't handle the interest rates for her working capital. At the moment she pays all the bills with American Express, so she is buying time, a month at a time. The last owner lost his credit line and had to sell. Why were they in this bind? Because the state of California has stopped MediCal payments since July. And why is that? Because the governor and a few Repugnants have blocked any new taxes and certainly any taxes on big business and big real estate. And of course have simultaneously blocked any increases in MediCal reimburstment schedules. Of course the feds under Medicare led the way.
So then, this crisis has been brought on by both ends of government, from the top and its de-regulated financial system and at the bottom by cutting government spending. The solution therefore can be found at both ends. Re-regulation and much tighter control on the top, and much more generousity pumped in the bottom.
How to pay for this shift? Bernie Sanders had it right, pumb money into the bottom and start squeezing the living shit out of the top.
Would the economy contract? I am quite sure it would. It was and is a gas bag economy anyway. So what? I am beginning to pull away from any concept of the current bail out proposals.
How to fund this 700 billion bail out at the bottom? Take the top 5 percent or 15,261,950 people (out of 305,239,196 total) and tax the motherfuckers about 45,865.66 dollars on average a year each as a surcharge. I would prefer to make it progressive, but I can't do the math. That's about the price of one expensive SUV, or 20k less than the current price of a Cadillac Escalade (currently at 62k). I think they can skimp on that third or fourth car for a few years.
Fuck the bail out.
And where would this 700 billion go? I would look at the whole sweep of what's left of the welfare state and of course its housing programs with home ownership at the bottom of the list. Fuck home ownership. It wasn't my american dream. It was my american nightmare. I had it and hated it. All I ever did was work on the fucking house.
You gotta have that vision thang. Give me a calculator and the big book, called the Catalogue of Federal Domestic Assistance (CFDA) and I'll show you how to swing on 700 billion.
CG