---------- Forwarded message ---------- From: Dan Cantor, WFP <DanC at workingfamiliesparty.org> Date: Mon, Sep 29, 2008 at 10:14 PM Subject: The Bailout -- Holy Toledo To: jncatron at gmail.com
Dear WFP Supporter,
The House vote against the bailout bill is shocking and fascinating at the same time. It appears to be a combination of an unusual right-left alliance. House Republicans are angry that the bailout isn't based on "free-enterprise" principles, or so they reflexively say. More likely they are furious at President Bush for having led them into the minority-party wilderness, and they are acting out. They are not an impressive bunch.
Much more interesting are the Democrats. 95 voted no (adding to the Rs 133 No votes). It's not entirely clear, but it seems like the Democrats who voted "no" mostly did so out of a sense that the bailout was still too generous to Wall Street hot-shots *who caused the problem in the first place.*
Now it's back to the House Democratic Leadership. They will "fix" the bill and get it done. The drop on Wall Street will demand it. The question is -- who will they conciliate to get the votes they need? If Pelosi has nerve, she will do what it takes to get Democratic votes, which will mean a proposal focused* less on home lenders and more on homeowners*. The problem is -- she does not want a bill that relies only on Democratic votes, because the bailout is not popular with voters and she doesn't want to take the blame if it goes sour (as it certainly could).
What to do? We are no experts, but, it turns out, the experts aren't really experts. Our principles lead us to the view that the Democrats should make it a fairer, more progressive response to Wall Street's crisis. They need to trust that people will reward them for standing up for working and middle-class people instead of kow-towing to the wealthy.
How might the revised bill look that is different than the original?
* *The costs must NOT be borne by working families.* If we need to bail out Wall Street, we need to make sure that Wall Street pays for it, by imposing a steep surcharge on incomes over a million dollars a year and a small tax on all financial transactions (as New York did until 1981).
* *The final plan MUST re-regulate Wall Street.* Any bailout needs to reverse the deregulation of Wall Street that led to this crisis, including breaking up banks that are "too big to fail."
* We may have to protect troubled banks for the sake of economic stability, but *we should not be protecting the shareholders*. If a financial institution can't survive without government help, then it should be temporarily nationalized. That's what European countries have done in similar crises. And it has worked well (see the Norwegian banking crisis of 1988-92, and we're not kidding!).
* *It must be a bailout for homeowners, not for home lenders. *We need to compel any institution that gets taxpayer assistance to renegotiate loan terms. Where foreclosure is unavoidable, families should be guaranteed the right to remain in their homes as renters. And the bill needs to include direct assistance to families in financial trouble, including expanded Unemployment Insurance and Home Heating Oil assistance.
*More broadly, the bailout can't stand in the way of the broader economic stimulus package that is desperately needed*. As former president Bill Clinton rightly says, the root cause of this crisis is an anemic real economy.
The reason investors poured so much money into real estate speculation and opaque financial instruments is the lack of investment opportunities elsewhere. In the long run, the only way we can have a vibrant economy without financial bubbles and crises is *if the government takes the lead in creating major new opportunities for investment*. In the 19th century that meant railroads and canals, in the 1930s it meant the public works programs of the New Deal, in the 1950s it meant the federal highway system. *Today it means a crash program to respond to the challenge of climate change with massive public and private investment in green jobs and alternative energy*. Without a commitment to to rebuilding the real economy, this bailout is just addressing the symptoms and not the underlying disease.
Wall Street and its friends in Congress keep telling us that a bill must be passed now, but rushing into a bad bill would be worse than doing nothing. Until we have a good bill, one without the four points noted above, the most responsible thing to do is vote no.
That's it. Read the papers, pay your dues, and....*organize. *
Bertha Lewis, Bob Master, Sam Williams
WFP Co-Chairs
Dan Cantor
WFP Executive Director**
p.s. A great newsletter on all of this is Too Much<http://salsa.wiredforchange.com/dia/track.jsp?v=2&c=m3LNK%2Bpnf29qQIEu9GvSlUbdGPHuvSdY>. You won't be disappointed, and we encourage you to sign up for it.
*Help Working Families fight for the little guy: * We can't count on Wall Street. We rely on contributions from ordinary people like you to keep the WFP going. If you'd like to support our work, visit:
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