Wall Street Bailout: Ignore the Sales Pitch -- Bush Plan is Not the Only (or Best) Option

by Deb Cupples |   True to its track record, the Bush Administration is dead-set on funneling at least 700 billion of our tax dollars to Wall Street firms whose executives recklessly drove their companies (and our nation's economy) to the brink of disaster.  In short, the Administration wants us taxpayers to buy Wall Street firms'  "distressed assets" (e.g., mortgages worth less than we'll likely pay for them).  You're right: it doesn't sound like a good deal for us.

In return for our generosity, the Bush Administration wants absolutely nothing from the Wall Street firms or executives who created this gargantuan mess in the first place.

Even worse, Administration officials have resorted to Iraq-war-style sales pitches (i.e., stretching the truth beyond recognition) to pressure Congress into approving the free-for-all bailout plan. 

For example, officials are falsely spinning the facts to make it seem as though there are only two options:  either 1) give Wall Street mischief makers $700 billion with absolutely no strings attached, or 2) subject our nation to the economic equivalent of the bubonic plague.

In fact, those are not the only two options.  We know this, because Senate Banking Committee chairman Chris Dodd has proposed an alternative plan -- which economist Paul Krugman sees as a "step in the right direction."

Sen. Dodd's plan would reduce the likelihood of a frozen credit market (precisely what our nation must avoid), while also doing the following:

1)  Giving us taxpayers an equity stake, so we might one day reap returns on our $700+ billion investment;

2) Preventing Wall Street execs from personally pocketing large amounts of our $700+ billion;

3) Establishing reforms to prevent Wall Street mischief makers from (once again) driving our nation's economy to the cliff's edge.

See?  There really is a third option -- though Bush Administration officials seem blind to it.

What stands in the way of Congress's approving any sensible plan that includes greater oversight, accountability, and protections for us taxpayers?

The usual Bush Administration shuck-and-jive: i.e., misleading or outright false sound bites. If employing its tried-and-true tactics, the Administration will likely use a sound bite that goes something like this:

"Any congressman who doesn't gleefully embrace our taxpayer-shafting bailout plan will be to blame for any terrible things that happen later -- and they love terrorists, too."

While repeatedly shrieking such sound bites, Administration officials would conveniently fail to address salient facts of recent history such as the following:

- That they knew of the housing bubble years back

- That they knew of mortgage-foreclosure problems years back

- That they knew Wall Street firms were over-valuing assets to keep stock prices up

- Yet they failed (or refused) to step up with sensible oversight and regulations to prevent (or lessen the severity of) the very crises we now face.

In short, the Bush Administration will likely seek to take advantage of the current state of panic and try to bully Congress into forking over our $700+ billion without even trying to improve accountability or to protect us taxpayers.

Such tactics worked some six years ago, when the Administration  falsely persuaded most of Congress to approve the invasion Iraq.  Any Congressmen who even dared question the Administration's arguments was labeled "soft on terror" and warned that any future terrorist attacks would be their fault.

Such tactics worked a few years ago, when the Administration bullied Congress into passing the so-called Patriot Act, despite some of its more odious provisions. Any Congressmen who even dared question the Administration's arguments was labeled "soft on terror" and warned that any future terrorist attacks would be their fault.

Such tactics worked a few months ago, when the Adminsitration bullied Congress into granting retroactive legal immunity to law-breaking telecom companies that had helped the Bush Administration illegally spy on Americans. Any Congressmen who even dared question the Administration's arguments was labeled "soft on terror" and warned that any future terrorist attacks would be their fault.

Now is the time for our taxpayer-funded representatives in Congress to grow spines and stop falling prey to the Administration's cheap political tricks -- tricks that even we ordinary folks have seen through time and time again.

Memeorandum has commentary.

Other Buck Naked Politics Posts:

* Bailout Plan: Dem Thinks Congress Will Allow Lobbyists to Shaft Taxpayers

* Executives Skate out of Disaster with Millions

* Skeptics Question the $700 Billion Bailout

* The Virtually Undebated Plan to Save the Economy   

* Economic Crisis: Sen. Clinton Nails it (video)

* Hoping Congress Really Thinks Through "Solutions" to Economic Crises

* Wall Street Bailout Plan: Angry Dem Congressman Uses F-Word, Even Gingrich Skeptical of Plan

* Wall Street Bailout Plan and Iraq-War-Style Sales Pitch

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Comments

[JollyRoger]

It is a continuation of the only consistent policy of the entire Reign of Error, which could be summed up with the slogan, "all wealth to the rich." It appears that, for once, they may not be able to scare and bully their way through this one.

Imagine that. America with LIMITS on executive power. A Congress that finally does the job we want done. Do we dare hope?

[Deb Cupples (Buck Naked Politics)]

Hi Jolly,

I'm hoping -- but not holding my breath.

[Adam]

I think that in this case the greed and the corruption are so naked, so blatant, that it's hard for anyone to ignore. They are asking us to spend more than the entire cost of the Iraq war in one day, and to get essentially nothing in return. It's absurd beyond description.

Of course, the only reason they aren't going to get what they want is because even Republicans can't stomach this sort of action.

[Deb Cupples (Buck Naked Politics)]

Adam,

I hope you're right. I'm feeling uneasy largely because of the Administration's recent spin -- stuff that ordinary folks who don't spend ours a week researching this stuff might actually believe.

[J4nitor01]

Deb,

While I would certainly agree that Americans should not blindly support this bailout, I think an important part your peice is inacurate and perhaps a little bias?

"While repeatedly shrieking such sound bites, Administration officials would conveniently fail to address salient facts of recent history such as the following:

- That they knew of the housing bubble years back

- That they knew of mortgage-foreclosure problems years back

- That they knew Wall Street firms were over-valuing assets to keep stock prices up

- Yet they failed (or refused) to step up with sensible oversight and regulations to prevent (or lessen the severity of) the very crises we now face."

Actually, the Bush admin. tried for years to get some oversight on Fannie Mae and Freddie Mac but was blocked by Barnie Frank & co.

see link.

[J4nitor01]

http://gatewaypundit.blogspot.com/2008/09/bush-called-for-reform

[J4nitor01]

In, fact it was Mr. Frank who was the most angry yesterday when the house republicans blocked this bill from being shoved down our throats.

http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/financial_meltdown

[Deb Cupples (Buck Naked Politics)]

HI J4,

I suppose I AM biased, but it's not a bias that I blindly adopted. It evolved since 2001, when I started researching corporate crimes and regulation after Enron fell. [I know, I have weird hobbies.]

That and whatever bias exists does NOT mean that my claims or arguments are automatically false. Some are a matter of my opinion, and some are a matter of history.

Let me be clear: that I criticize some Republican politicians does NOT mean that I'm criticizing Republican voters. Please don't take it as a PERSONAL affront.

I think that Bush has screwed, in some ways, ALL of us voters -- and that's NOT the fault of us voters.

[I've also criticized Dems on some issues, incidentally.]

Thanks for the Gateway Pundit link. Basically, Gateway quotes lines from Bush's speeches (and some of them don't have sources listed). I would do some research before believing Gateway's thesis.

Mere public statements are not the same as presidential ACTIONS.

Below are a few things that Gateway doesn't mention.

1. OFHEO's chairman was APPOINTED by BUSH . OFHEO oversees Fannie and Freddie. If Bush had wanted real reforms, he would have pressured his hand-picked appointee -- or picked a different guy to head OFHEO. http://www.ofheo.gov/about.aspx

2. Barney Frank and Gang had NO CONTROL over the House Banking Committee from 2001-2006, because Republicans controlled the House and ALL of its committees those years.

3. Since 2001, our SEC chairmen have been corporate friendly and anti-regulation (the worst being Harvey Pitt). BUSH APPOINTED all of them. If Bush had wanted better corporate regulation, he would have picked less corporate-friendly SEC chairs. PERIOD. Instead, Bush picked people that the securities and accounting industries lobbied for.

4. Two crucial years in terms of the housing bubble and the mortgage crisis were 2005 and 2006. Republicans controlled the White House and BOTH houses of Congress during those years.

Despite evidence of a coming crisis, Congress and the White House did NOTHING to prevent the crisis during 2005 and 2006. Period.

Honestly, I DON'T know whether (2007-present) the House Dems put forth legislation re: Fannie, Freddie, or CDOs. They MAY HAVE dropped the ball.

It would take a while for me to research, and I don't have the time just yet, so I'll withhold judgment on that issue for now.