What’s really required in this crisis is an entirely different kind of government intervention in the economy.
Editorial
Socialist Worker, October 1, 2008
Quickly organized protests around the U.S. drew opponents of the bailout for Wall Street (Joe Newman)
AS THE smoke cleared after Monday’s stunning House of Representatives vote against a $700 billion financial bailout for Wall Street, the politicians immediately got down to the business of blaming each other–and scheming about the next attempt to push through this rescue of the super-rich.
But for working people trying to figure out what the hell has happened to the U.S. financial system–and why the leaders of the U.S. government, apparently regardless of political party, are prepared to spend more than $2,000 for every man, woman and child in this country to save Wall Street–the reaction was different.
For one thing, there was sweet satisfaction to be taken in the fact that the bankers and stockbrokers didn’t get their way for once–especially since they’re out to steal $700 billion in taxpayers’ money to cover their bad investments, under a program devised by former Wall Street CEO and now Treasury Secretary Henry Paulson.
With the business world ratcheting up political pressure and Paulson predicting certain doom if no action was taken, the Bush administration and the leadership of both parties in both the House and Senate were all sure that the bailout bill would go through. Yet the legislation was derailed because members of Congress are feeling the heat from a growing popular outrage over the staggering scale of a giveaway to the very same people who led the economy to the edge of the abyss.
It was an all-too-rare turn of events for the U.S. political system–the opinions of ordinary Americans actually mattered in what happened.
At the same time, though, there’s a sense of foreboding. If the government can’t agree on a bailout, will Wall Street really crash and burn–and cause an economic catastrophe on Main Street, too?
After all, that’s the claim of “King Henry” Paulson and his nominal boss, George W. Bush. They’re basically extortionists, insisting that if Congress doesn’t agree to a king’s ransom for the banks, the economy gets it–in the form of a worldwide financial meltdown that would wipe out workers’ savings and eliminate millions of jobs overnight.
The stock market plunge that followed the House vote Monday will have reinforced such fears. Few workers have the resources to play the stock market, of course, but their lives are affected by its ups and downs, especially the downs–for example, the loss of retirement savings in 401(k) accounts that many workers rely on, now that defined benefit pension plans are going the way of the dinosaur.
So is it true? Are we all–the multi-millionaire bankers on Wall Street and the tens of millions of workers on every other street–in the same boat after all? Do we really need the Paulson bailout to avert a second Great Depression?
The answer is no.
The argument that a bailout of the banks is good of all us is an ideological smokescreen, to cover the specifics of the Paulson proposal, as sanctioned by the Democrats–which benefits the rich and powerful, at the expense of the rest of us.
There are plenty of ways that government intervention could alleviate the financial crisis and provide urgently needed relief to working people. But that would involve programs, policies and priorities that the bankers despise–and that political leaders in Washington want nothing to do with.
Paulson is right to say that Wall Street is facing its most severe crisis since the Great Depression–a catastrophe entirely of its own making–and that the U.S. government has to respond. But the form that response takes–a huge handout for the super-rich or a progressive plan to rein in the banks and help ordinary people–depends on whether workers organize to make their voices heard and felt in Washington.
Peace and Justice Post 
Bailout Vote Underscores US Leadership Crisis
October 1, 2008Truthout, Monday 29 September 2008
by: Steven Thomma, McClatchy Newspapers
The bailout deadlock demonstrates that no definitive leadership exists in Washington – least of all in the White House. (Photo: Ezra Shaw / Getty Images AsiaPac)
Columbus, Ohio – The failure of a proposed Wall Street bailout Monday underscored that America is suffering not just from a financial crisis, but also from a crisis of political leadership.
“This has been a bad day for Washington and a bad day for American politics,” said Harold Ford, a former Democratic congressman from Tennessee. “What happened today was an embarrassment for the country.”
None of the country’s political leaders, Republican or Democrat, has proved able to navigate the treacherous politics of the moment and secure an agreement to bail out the country’s financial system and restore confidence in the marketplace.
President Bush is a largely discredited lame duck. He’s not trusted by his own party and was unable to bend the Congress to his will even as he warned of a catastrophe if lawmakers rebelled.
Democratic presidential nominee Barack Obama and his party’s congressional leaders control the Congress and agreed with Bush’s urgency, but they couldn’t deliver a majority, either.
Still, they came closer than did Republican John McCain and his party’s leaders in the House of Representatives, who delivered only 30 percent of the GOP votes for the compromise, while Democrats delivered some 60 percent of their members.
Leaders of both parties vowed to seek bipartisan cooperation toward drafting a compromise that could pass, but with their own elections five weeks away, they couldn’t stop themselves from partisan attacks, which make the goal of bipartisan agreement even more difficult to reach.
Nowhere is the crisis more evident than it is in the White House.
Bush limps toward the end of his second term with among the lowest job-approval ratings in history – a recent Gallup poll found just 27 percent approving and 69 percent disapproving.
Worse, he’s lost credibility in Congress, notably for leading the country into war in Iraq on false claims that Iraq had ties to al Qaida and weapons of mass destruction. When he dispatched Vice President Dick Cheney to lobby House Republicans to support the Wall Street bailout, the closed-door session grew heated, and some members reportedly reminded Cheney that they’d trusted him on Iraq.
Bush also is paying a price for years of strong-arming Congress, particularly when he counted on then-House Majority Leader Tom DeLay, R-Texas, to “hammer” proposals such as a costly expansion of Medicare past skeptical conservatives.
“There’s no question the rank-and-file are carrying some grudges from the past,” said Dan Schnur, the director of the Unruh Institute of Politics at the University of Southern California.
Democrats, who won control of both the House and Senate in 2006, also couldn’t deliver. Congress’s approval rating is even lower than Bush’s, at around 18 percent.
When Obama, the party’s new leader, learned of the plan’s rejection, he spoke about Washington almost as if he weren’t a member of Congress.
“Democrats and Republicans in Washington have a responsibility to make sure that an emergency rescue package is put forward that can at least stop the immediate problems we have so we can begin to plan for the future,” he said.
He didn’t say how he might lead or what role he’d play. “Step up to the plate,” he told Congress. “Get it done.”
His party’s leaders in Congress also threw up their hands, as House Speaker Rep. Nancy Pelosi, D-Calif., and others bragged that they’d delivered a majority of the Democratic votes, even though that wasn’t enough.
“The Democratic side more than lived up to its side of the bargain,” Pelosi said, lauding fellow Democratic leaders for “getting 60 percent of the House Democrats to support a bill which isn’t our bill.”
Republican leaders in Congress were powerless as well to deliver the votes they’d promised, saying that they lost about 12 committed votes when some of their members got mad at Pelosi.
“We could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House,” said House Republican Leader Rep. John Boehner, R-Ohio.
McCain appeared as impotent as everyone else. He’d suspended his campaign briefly last week to rally support for the plan, and spent part of Saturday lobbying House Republicans by phone, but he couldn’t deliver, either.
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Tags:Barack Obama, economic bailout, John McCain, Nancy Pelosi, President Bush, United States, US Congress, Wall Street
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