As expected, as has become customary, the Democratic leaders of congress, after making a lot of noise and protest, are selling out Main Street, handing the real plums of the bailout to Republicans, giving George Bush and Henry Paulson what they wanted most.
Forget about the "unsupervised control" part of Paulson's request. They never expected to get that. It was a negotiating ploy they expected to give up, one designed to make them appear reasonable asking for what they are going to be gifted by the Democrats.
What's particularly egregious is that the Dems are giving even more than Paulson asked. Most of the modifications from what Paulson requested, after the obvious extras, never expected to be included were stripped out, have been packaging-- changing the timing of the release of the money, things that have a minimal effect on the deal.-
First, there's that wild story about imposing a tax if the bailout doesn't return profits-- in five years, if the president elected in 2012 asks for it. What a cowardly, disingenuous way to avoid doing what should be done-- impose a tax immediately on stock transactions and loans that are going to be enabled because of the bailout. Thom Hartmann has described a plan that employs a tiny 1/4% tax on stock transactions (How Wall Street Can Bail Itself out without Destroying the Dollar). I say put it on loans too, since they are the beneficiaries of this project. Mortgage borrowers pay a similar PTI interest rate if they have less equity.
Waiting five years and putting the responsibility on a president two elections away is pretty much saying "a tax would be nice but WE're not going to do it."
Of course, the Republicans will oppose any tax. But the Democrats have a majority in both houses and the support of the American people. Oh well, that was never enough before to get Harry Reid and Nancy Pelosi to do the right thing, what the Majority of Americans want.
The deal gets worse. Now, there's a new insurance for banks, that the government pays for. That's a Republican demand-- remember, the people who hate government, except when it serves their special interests. Will the banks be paying for this, as they go? We'll see.
I liked Chris Dodd as a presidential candidate. But now, he's trying to put lipstick on this bailout pig, providing cover for another Pelosi failure to do her job. Yes. Pelosi's the worst. She has a solid majority in the house. Even her supposedly economic conservative, balanced budget bluedog dems should be working with her on this pig, allowing a tax to pay for the bailout. But no, Pelosi sold out the majority of Americans again.-
Of course, the Republicans, asking for elimination of the capital gains tax, and other breaks for the rich and corporations, are just as offensive, no more, no, equal for trying to use the crisis as an opportunity to push their standard policies-- the ones that led up to the failure.-
The plan the congress has put together is still highly risky, still endangers the dolar, still encourages risky behavior by businesses and the people and institutions that profitted.-
Both Obama and McCain have an opportunity here. They should reject the proposed "solution."- Americans are ready to help with the bailout, but a tiny tax bite- a quarter of percent-- is a fair, reasonable way to save an industry while- cutting risks.
Make the calls today and tomorrow. Tell your legislator, whatever party, that you see through the five year tax plan lie. Demand that a tax be part of the solution.