Wall Street Wants Us To Bail Them Out To Screw Us Over Again

Everyone has paid at least a little attention to the massive fiscal crisis that Wall Street felt last week. If you are confused as to what happened, you should check out this must-read piece by Devilstower at DailyKos. Now this week the President and Congress are trying to remedy the situation but have very different views on how to go about that.

Basically Bush, Paulson and the rest of the GOP wants us to let Wall Street off the hook for their excesses and make the taxpayers shoulder the burden (what's another trillion when we already owe $9.6 trillion?). Leaders in the Democratic caucus better take heed of some important questions though. Listening to Bush beforehand got us into a lot of trouble, no matter what the topic, so lets not just go and bend over for his "solution" this time. There is some sort of positive agenda forming from the majority party, but you never know what you'll get when Pelosi is in charge of something that challenges Bush's authority.

One Senator who is neither a Democrat nor a Republican (but sides with the Dems) is on to the right idea:

By Senator Bernie Sanders

The current financial crisis facing our country has been caused by the extreme right-wing economic policies pursued by the Bush administration. These policies, which include huge tax breaks for the rich, unfettered free trade and the wholesale deregulation of commerce, have resulted in a massive redistribution of wealth from the middle class to the very wealthy.

The middle class has really been under assault. Since President Bush has been in office, nearly 6 million Americans have slipped into poverty, median family income for working Americans has declined by more than $2,000, more than 7 million Americans have lost their health insurance, over 4 million have lost their pensions, foreclosures are at an all time high, total consumer debt has more than doubled, and we have a national debt of over $9.7 trillion dollars.

While the middle class collapses, the richest people in this country have made out like bandits and have not had it so good since the 1920s. The top 0.1 percent now earn more money than the bottom 50 percent of Americans, and the top 1 percent own more wealth than the bottom 90 percent. The wealthiest 400 people in our country saw their wealth increase by $670 billion while Bush has been president. In the midst of all of this, Bush lowered taxes on the very rich so that they are paying lower income tax rates than teachers, police officers or nurses.

Now, having mismanaged the economy for eight years as well as having lied about our situation by continually insisting, “The fundamentals of our economy are strong,” the Bush administration, six weeks before an election, wants the middle class of this country to spend many hundreds of billions on a bailout. The wealthiest people, who have benefited from Bush’s policies and are in the best position to pay, are being asked for no sacrifice at all. This is absurd. This is the most extreme example that I can recall of socialism for the rich and free enterprise for the poor.

In my view, we need to go forward in addressing this financial crisis by insisting on four basic principles:

(1) The people who can best afford to pay and the people who have benefited most from Bush’s economic policies are the people who should provide the funds for the bailout. It would be immoral to ask the middle class, the people whose standard of living has declined under Bush, to pay for this bailout while the rich, once again, avoid their responsibilities. Further, if the government is going to save companies from bankruptcy, the taxpayers of this country should be rewarded for assuming the risk by sharing in the gains that result from this government bailout.

Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:

a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;

b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and

c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies’ stock goes up.

The rest of the Op-Ed addresses the need for a jobs program, re-regulating the industry that took advantage of GOP policies and ensuring that these corporate entities never get as big as they have.

Sanders is exactly right that we need to fight back, because there are so many agents that are trying to keep the status quo going at the expense of all of us. For example, the Fed gave Goldman Sachs and Morgan Stanley a big wet kiss yesterday by changing their status to bank holding companies, ensuring that they get a piece of the potential government bailout. Some champion this as a way to regulate the two giants, but really it is a giveaway to firms that contributed to the fiscal disaster we are in. Even foreign banks like UBS are trying to cash in on this financial raping of the American taxpayer.

This is a crucial time in the fight between the middle class and the wealthy elite. Now is the time for Dems to stand up tall along with Sanders and say, enough is enough!