No blank check for Bush

By Weekly Archive On Oct 1, 2008

"If
Putin had written it, I would have understood it." That’s what
former House Speaker Newt Gingrich had to say about the big Bush $700
billion-plus bailout plan. Echoed Vermont Sen. Bernie Sanders: "Not
even Stalin was ever given so much power or so much money to spend."

When
leaders of the left and right agree on what’s wrong with Bush’s
proposal to rescue Wall Street, you know it’s a bad deal. This is the
largest transfer of wealth and power in history. It would put total
control of $700 billion — and probably more — in the hands of one
man: unelected, with no oversight, and no legal or political
accountability. Assuming that’s even constitutional, it’s a dangerous
undermining of our democratic form of government. No wonder some
Republicans in Congress are calling the Bush plan "financial
socialism."

Treasury
Secretary Henry Paulson insists that Congress must endorse his super
bailout intact and in a hurry — "clean and quick" — or
else the sky will fall. This coming from the same man who, for the
last two years, has been daily assuring us that Wall Street’s doing
just fine and the fundamentals of our economy are strong. He’s always
been wrong before. Why should we believe him now?

Besides,
haven’t we seen this movie before? After every crisis, the Bush White
House insists the end is near and demands that Congress act
immediately to give the administration whatever new powers it wants,
with no strings attached. They did it after Sept. 11, and Congress
surrendered our right of privacy in the Patriot Act. They did it
again in the buildup to the war in Iraq, and Congress surrendered its
own war-making authority. And now they want Congress to surrender all
regulatory oversight over Wall Street and hand all power over to the
president and his Treasury secretary? No way.

Congress
should not give George Bush another blank check. First of all, even
though Paulson warns that the "sky is falling," there’s no
way of knowing if his plan will succeed. Government intervention may
rescue the economy, or it may just lead to more government bailouts
at even greater taxpayer expense. Nobody knows. So while it’s a risk
to do nothing, it’s also a huge gamble to throw $700 billion at a
problem without knowing whether or not it will work.

Second,
Paulson’s plan of having the government buy $700 billion of worthless
paper may get the banks back in business, but it does nothing to
solve the underlying problems on Wall Street. As outlined by the
White House, the proposal contains no structural changes, no new
regulation or oversight, and no brakes on the reckless financial
instruments that got us into this mess in the first place. Without
fundamental reforms, we’d be just throwing good money after bad.

Most
importantly, of course, it is outrageous, if not immoral, to ask
American taxpayers, whose homes, jobs and retirement plans have been
destroyed by those thugs on Wall Street, to turn around and bail them
out to the tune of $700 billion. They knew what they were doing. They
created those funny-money schemes. They were paid handsomely for it.
And then their house of cards collapsed. What responsibility do we
have to reward their bad behavior? Zero! After all, that’s the way
the "free market" is supposed to work.

No
blank check for George W. Bush. At the very least, Congress should
say no deal for Wall Street that does not include equal protection
for Main Street. In return for bailing out the big-bank robber
barons, taxpayers deserve, at a minimum: legislation to re-regulate
and restore oversight of financial institutions; tough federal
oversight on how bailout funds are spent; legal authority to
renegotiate mortgages of at-risk homeowners down to a level that will
enable them to keep their homes; limits on interest big banks can
charge on credit cards; an equity share in any bank we bail out; and
limits on salaries and severance packages for CEO’s of any firm we
bail out. If CEO’s won’t accept those terms, too bad. Let them fail.

Finally,
there’s no need to rush into any bailout deal. Nor is there any need
to commit to the entire $700 billion up front. If this is, indeed,
the most serious financial crisis since the Great Depression, maybe
Congress should stay around another couple of weeks: not just to get
it done, but to get it right.

Bill
Press is host of a nationally syndicated radio show and author of a
new book, "Train
Wreck: The End of the Conservative Revolution (and Not a Moment Too
Soon)." You
can hear "The Bill Press Show" at his Web site:
billpressshow.com. His email address is: bill@billpress.com.