Not an economist, not a political scientist, not a churchgoer: what are the qualifications and the motives that bring me to write on the moralities of the financial bailouts? There are essentially four: (1) I own a keyboard with (2) a spell checker (3) I am a citizen and (4) I am seething with anger.
What is at stake here? We don't really know. There were several preliminary packages and then there was the $700 Billion blockbuster followed by some "discoveries" absent of oversight before being awarded, but the grand total thus far is something on the order of ONE TRILLION DOLLARS, a number so large that many Americans are uncertain how many zeroes follow its lead digit. But suffice it to say, if one beheld the clear night sky and – beyond those he could see – imagined how many stars were in the multiple universes, and then multiplied that number by a million, he could then perhaps grasp, however unscientifically, the immensity here dealt with.
Why do a bailout? The reason offered by our incumbent Administration is that our economy is suffering and we must save it! One can accept this, especially if recently losing your job, being evicted from your home, or needing to suffer the indignities of applying for Medicaid or enrolling the kids in the School Lunch Program. But why is the remedy, the Trillion Bucks, the people's resources, the people's future debt obligation: being awarded to the bankers and investment house managers? Well, we've not heard much beyond something about "structure," which is something that an economist can expound upon, and the same economist will not hesitate to advise us that we "laymen" cannot be expected to comprehend so profound a concept. Pardon us, learned master, do we detect here the scent of rotten fish?
If you can indulge my nonpartisan imagining, could it be that the Bush Administration, with precious few months before its expulsion, saw one last grand opportunity to savage our economy to the profit of its interests and of its masters'? And could the pot be even larger than their interest in America's longest war, and could it even stretch beyond their occupancy of offices and the salaries and the perks we provided for eight years? And would it not be slicker than the no-bid wartime contracts that returned perhaps but the one usurious dollar in four to the parties involved, to now just hand out the money directly and grossly to the tens-of-millions-of-dollars-bonus recipients and to the incompetents of the hundred-millions-of-dollars separation allowances, without the bother of manufacturing the machinery of war? After all, just as those who finagled war were rewarded, should not those who destroyed the economy to their advantage in like manner deserve a payout? And, please, lest we assume that such questions are prompted by Democrat partisanship, we should not neglect to note that all this is happening in the full light of day with the complicity of a Democrat majority of both houses of Congress, the same party who enjoyed a majority of the Senate which in 2002 endorsed Bush's unprecedented and arbitrary war powers, enabling the subsequent and ongoing slaughter which may forever disgrace our history, and the same party now in the majority that continues to approve every dollar he's asked for to fund the War of Lies.
Returning to the biggest slice (thus far) of the bailout pie, the $700 Billion: just how was this number quantified, other than it is larger than $600 Billion and smaller than $800 Billion? No one knows! Some faint inquiries have been raised, all brushed aside in the fever to get it done, no real hell-raising from the "opposition," whatever one thinks that could possibly be after allowing six years of fraudulent war accompanied by its own fraudulent take of the national treasure. We don't know and we won't know unless some future "traitor" from the inside of this intrigue spills the beans to his peril.
This next question we might ask of the $700 Billion bit is how will it be spent? Unbelievably, we don't know that either, or how it will be allotted amongst the recipients. Our Secretary of the Treasury, Henry (Hank) Paulson, formerly of Goldman Sachs (an investment bank in the middle of this disaster) has appointed a thirty-five year old also former Goldman Sachser (...hmmm...) to buy financial "bundles" of something or other that, here again, we cannot be expected to comprehend, or shares (in financial disasters?) or bonds, or other stuff. Just to keep us off our toes, the description of the prospective purchases changes weekly, and we are not even advised specifically of the actual disbursements gifted away thus far. Here again, all without hardly a whisper of protest by the "opposition."
Assuming that it makes sense to put $700 Billion of our money into a bailout, could it be done differently? The current route appears to be a rebirth of Reaganonics 101: gift the rich with our national economic distribution and it will all magically trickle down to benefit everyone! The clear refutation of this approach is the result of the Bush Administration's gift to the rich across the past eight years, which has surpassed even that of the Republican administrations' of the 1920's, and which we now painfully witness as having trickled down only to the top two percent of all incomes.
Perhaps instead, should we "trickle up"? Should we provide home mortgage relief to prospective evictees, thereby actually helping people and at the same time providing cash stimulus to the bottom rungs of the financial system rather than for the home asset to lie wasted and depreciating in a now dying market? Should we invest these funds in infrastructure, providing jobs and much needed repair to our potholed highways and deteriorating and ever more dangerous bridges? Should we invest in the education of kids now deprived by lack of funds? All these avenues will in fact have the beneficial "multiplier effect" our learned economists are so fond of citing, which will cascade across our economy, and to this writer appears not only the more moral course but one more prudent than buying "packages" of mysterious merit from failed investment houses in New York.
One very real alternative is to take 50 of the $700 Billion package (that is seven percent) and invest it in our automobile industry, with the appropriate government oversight. Manufacturing is much closer than any investment bank to where the rubber hits the road of our economy. This would mean the preservation of hundreds of thousands of real jobs in automotive manufacturing and down through its supplier networks as well as the multiplier cascading through consumer products and across the economy to preserve perhaps tens of millions more. Our Republicans have responded to this saying: "Don't take it out of our $700 Billion!" Our Democrats have said not much of anything constructive here, which has, lamentably, been their custom across eight years of Bush Administration malfeasance.
We now know only that our money will be spent. We don't know where, how, how much, or to whose benefit. We need to shed some unproductive partisanship if we are to determine an honest and productive approach. We need to considerably sharpen our insights in the face of scare tactics and their nakedly exploitive sloganeering of TERRORISM! SOCIALISM! and generally the politics of fear. ---Finally, we of the electorate need desperately to pursue an objective examination of our real situation, of the possible fate we are headed for and the possible courses open to us beyond delusional partisanship. We need to remember how America was born, how economic abuses such as the Stamp Act and the tax on tea, and the onerous rule of a non-representative government across the Atlantic – not too unlike Washington Inc. today despite its relative proximity – abused its economy and the welfare of its citizens. The reaction, of course, was a groundswell of the people's self-interest. It was the Revolution.
A time honored saw of political scientists is that a people will revolt only when conditions become intolerable. We might well ask ourselves and advise our so-called "leaders" just how far along are we on that path.