The recent economic slow down---the recession---has prodded a normally lacksadaisical White House into far-reaching economic intiatives few ordinary Americans understand and these intiatives have, by and large, been the product of backroom deals where all the usual stakeholders have had a place at the negotiating table with one gross exception: the public, or an advocate to negotiate for and defend the public interest. That is of little surprise to a wary electorate now tone-deaf to the pronouncements of an Exceutive Branch that has never stood for the general public interest and has always been bully-bully on corporate, elite, and other wealthy interests.
This article will shed a bit of light on the very shocking and real ramifications of the federal administration's far-reaching, consequential financial and other economic policy initiatives from recent days.
First, however, it is useful to provide some general economic context to the reality of Bushonomics over the past seven years. The income gap between average Americans and the very wealthiest ten or so percent of the US population has increased to obscene disparities only previously equaled in history during the 1920s. Real American wages, adjusted for inflation and other economic factors, have been continually eroding as a share of the overall national wealth.
Permanent, chronic unemployment and underemployment has become a reality of life for many more Americans. Costs for health care, prescription medications, insurance, education, housing, energy, credit, and increasingly for fundamental economic necessities such as food, clothing, and basic family entertainments are becoming increasingly prohibitive for many ordinary American taxpayers.
Patriotic Americans, who propped up the American economy by following Mr. Bush's call for consumer spending in the now almost seven years since the attacks on 9/11, are seeing their American dream, home ownership, slip from their grasp as their government essentially offers no response to them, yet "bails out" those bankers, brokers, and other financial agents who, in many more cases than not, defauded these very same patriotic Americans of their American dream. And the federal government is funding the bail out--a risky scheme in itself--at taxpayer expense. The same taxpayers the federal government has done nothing to help.
In a March 18, 2008 NYT Editorial, "Who will come to the rescue?" [click here The Times writes: "The Fed’s huge loans and interest rate cuts can buy time for flagging banks. They can also help prevent specific problems, like last weekend’s near collapse of Bear Stearns, from causing a chain reaction. They cannot save defaulting homeowners, transform bad mortgage loans into good ones, or do the same for hundreds of billions of dollars of securities tied to those loans."
Many ordinary Americans, disheartened by watching the federal government allow American manufacturing jobs to migrate overseas, and who question the wisdom of bailing out risky mortgage-backed investments whose depth is still not clearly known using taxpayer monies, wonder why can't the American government assist some homeowners from foreclosure, and transform bad mortgage loans into affordable, fair, and reasonable ones.
If the US Federal Reserve Bank can assume what is essentially unknown risk of the kind they have assumed, by pledging $30 billion to JP Morgan Chase to back-up Bear Stearns funds whose worth is virtually incalculable, or at least unknown, it seems reasonable that the government could likewise provide the facility for renegotiating fair mortgage terms to struggling homeowners at a rate they can afford, thereby reestablishing some level of value in the housing market, while limiting investment banks' risk, and and curtailing public exposure (through tax dollars) in what is surely a continuing financial collapse.
What Americans are sick of is government pandering to elite interests and corporate over-influence in American society and government. Yes, government has the duty to negotiate and act, but it also has the duty to negotiate and act in the light of the sun. Yes, corporations have a right to a seat at the table, but they do not have a right to all the seats at the table. The people must clearly demand that their government ultimately act in the public interest. Bailing out large corporate investment firms using taxpayer dollars is not clear-headed if the only comparable relief the government can offer private individuals, who have just as much stake in the American and global economy as do private and public corporations, is a few hundred dollars in a debt-incurring tax rebate that those very taxpayers will eventually have to repay with interest. In fact, it may be the case, given the uneqal profit-taking by corporate and investor CEOs during the last decade, and given the fact that consumers drove the American economy since 9/11, that ordinary, private individuals, and especially those who were sold mortgages by essentially faudulent tactics and gimmicks, are more deserving and less of a moral hazard.
We must engage a national debate on these issues and we must hold the White House and its executive agents and corporate interests to account for the questionable initiatives they are currently enacting, while ignoring commonsense proposals to help out struggling homeowners. We must demand that the public is well-represented at the negotiating table. And, finally, we must demand that sun shines on the process throughout.