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Kall: So, let's take a step back; we've got what has been billed as a crisis situation here; I'm not so sure it's a crisis. This reminds me too much of the crisis that we faced before we entered Iraq; when they were threatening us with weapons of mass destruction: bio-terrorism, and they used that to scare and bully the Congress—those foolish Democrats who supported Bush's request to go to war and all regretted it. I don't think (47:51) that's going to happen quite this way this time, but again, there's an awful lot of people who say Nancy Pelosi and friends make a lot of noise and then they give bush what he wants just about every time.
Korten: Well, there is a lot of political pressure. I think you're absolutely right in your assessment of well, "The sky is falling and we've got to act immediately"; for one thing, if the hedge funds and private equity funds and the speculators fall, that's kind of clearing out the trash to open things up so we can start (unintell) the system
Kall: (laughs) Amen.
Korten: It's just amazing; it was yesterday, or the day before, I was listening to one of these right wing talk shows. Man, they were just fuming at the mouth that the terrible Democrats are going to destroy our whole country because they've got this bill before them on this 700 billion dollar bailout and they're not passing it TODAY!
This one call in show had a stream of callers coming in, all just dittoing the blowhard. Saying "Yeah, those Democrats, they should be responsible and they should pass this and why aren't they passing it today?" It's just hard to believe that people could be so sucked in and so out of touch that—you know, this is an issue that's been building up for a long long time; the issues go very deep and the idea that a Democratic Congress should hand over to the bush administration a blank check for 700 billion dollars which is more than the total amt we've spent on the Iraq war so far, just because they ask for it and said, "The sky is falling!"
That would be the height of irresponsibility. So yeah, we really need to be out there with a message of "Look, it's time to step back, take a longer term look at this and if a lot of firms that have been engaged in high stakes speculation fall, that's probably all to the good, in the long term.
Obviously there are going to be some of disruptions but we've got disruptions any place, and given that the experts think that if we do the bailout it's going to add up to a lot more than 700 billion, more like a trillion; well, there's just an awful lot of other things we could do with a trillion dollars otherwise to cushion the shock while we're working on a complete restructuring of the financial system to make it work.
And to deal with issues like equity: This system is designed to destroy the American Middle Class and create ever growing inequality by concentrating wealth in the hands of these hedge fund managers.
At the same time, Wall Street is fleecing homeowners with misrepresentations and scams on mortgages, and people are not talking about the credit card situation, but we're developing huge credit card debts because the economic policies that favor Wall Street have been holding down wages below the level of inflation, which means people are becoming ever more desperate to just keep body and soul together.
They were responding by taking second mortgages, running up their household debt, but they're also charging it to their credit cards. Which is ultimately a trip to nowhere. As soon as they get overburdened, the card companies are raising their rates to absolutely exorbitant rates up into the 20s, even 30% and tacking on all kinds of fees.
This is just totally predatory; we used to call it "usury"; it is predatory lending on all fronts. Then they securitize these debts and play all these derivative games with them. It's totally insane.
Kall: You said that the system is set up to destroy the middle class--
Korten: Yeah, nobody's going to say that that's our intention but it is exactly what's happening, because—
Kall: Well, there's a war against the middle class and it's been going on for years. But my question is, this new development, this "handout" of 700 billion dollars; you know, the way I think about it, Bush worked out a way to pry off about ten, fifteen billion dollars a month to give to Halliburton and military contractors for the last six years? Five years—with the Iraq war.
Korten: Yeah.
Kall: Here he's got a brilliant way to pry off 700 billion dollars all at once and then more after that and it seems to me like this is an unbelievably fast way, if the system is designed to destroy the middle class, this is a way to accelerate the process much further.
