Ian Welsh’s piece on Firedoglake raises legitimate questions about the plan being approved, 75-24 in the Senate as I write this, while asking voters to go out and demand that Congress consider the alternatives being proposed by members of the House Progressive Caucus.
Here is his brief, but on-the-mark critique on the bailout:
On the substance of the matter at hand, of course, it isn’t much changed. Increasing how much the FDIC insures is good, but something the FDIC could have done itself at Presidential order, it has the authority (and IRAs were already insured to $250,000). As “concessions” go, that’s very very little since Obama or Bush could have just said “make it so”. Adding in letting the FDIC borrow infinitely from treasury is also good, but it’s an administrative detail, the guarantee was already there.
There’s still no bankruptcy protection for ordinary people. The treasury secretary can still spend money on any asset he wants, pay whatever he wants, sell it for whatever he wants and doesn’t have to take an equity or bond share if he does, and if does do it can’t take voting stock but must take non-voting stock. Executive compensation restrictions are a joke, just “pay a little bit more tax on your pay” and overall there’s nothing in here, nothing at all, which would stop banks from continuing to engage in the same practices as got them here. That’s insane. This isn’t even closing the barn door once the horses are all out, this is buying new horses and deliberately leaving the barn door open.
Bottom line: a bad bill which has been larded up with various legislators pet bills to get the votes necessary to pass. Everything I’m hearing says it will easily make it through the Senate. The real fight remains in the house.
As for the alternatives, he says this:
There are currently two bills being worked on in the House as alternatives to the Paulson-Obama bill. The first is the DeFazio bill, which is intended to fix the banking system by providing, not a bailout, but insolvency relief. The second is being put together by Rep. David Scott and Rep. Doggett, with the aid of economist James K. Galbraith, and is intended to help ordinary people by creating a modern version of the Home Owner’s Loan Corporation (HOLC) to take over mortgages and keep people in their homes with reasonable serviceable mortgages. Also working to turn
these bills into something that helps all Americans are Rep. Elijah Cummings and Rep. Lloyd Doggett.Each bill by itself is incomplete, together with some work they could make a good, complete, humane solution to financial and economic meltdown which is also acceptable to enough Republicans to pass.
I want to mention the coverage of the deliberations, which has left the alternatives out of the discussion and has spent most of its time talking about the politics, the process, the game of partisan manuevering. Even liberal TV personalities like Keith Olbermann and Rachel Maddow have lost sight — to some degree — of what this bailout really is and have ceased asking whether the alternatives might work better.
Hank Kalet 