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Thursday, 2 October 2008

Nationalize, Not Bailout

With 700 billion dollars at hand at any time, Wall Street's party isn't over, it's just getting started.

There's a plan afoot to take our tax dollars and give them away to huge companies that have made poor choices. We buy off their bad assets, sell them at a huge loss and then sit around waiting for them to have more bad assets. It's a $700 BILLION pool of money, that never goes dry. We can't have national health care, because that's too expensive, but any hedge fund in trouble can have cash when they need it.

We infuse huge amounts of tax dollars, what will turn out out be trillions, over time, and in the end, have nothing. The uber-rich, however, have a huge safety net. They can make no wrong choice. If they bet on prices going up, and they go up, big win for them. If they bet on prices going up, and they go down, our taxes make up the difference. It's a hell of a party when you don't have to pay for it.

The idea is that some businesses are too big to fail and too important to our economy and therefore, it's in our shared, public interest to help them out. And this could well be true. Large banks are an essential part of any modern, market economy and having tax payer backup for them is an important tool. But if we're paying for them, we should own them. Companies that are so important to our well-being that they need public support, should belong to the public. If they're central to the government's mission, they should be part of the government. If we pay when they lose, we should profit when they profit. Things like health insurance, banks, and public utilities are too important to be run like a card game. If we need them, then the people in charge should be answerable to the public who relies on them, not on shareholders who place bets as if it's poker.

Companies that are not vital to our interests, but so big that they can't fail are too big. Break them up! Don't just hand over our money. This is class warfare. they want to squeeze every drop of cash out of the middle class and the poor and use it to buy themselves third, fourth and fifth houses, while leaving the federal government to foreclose on our sole homes. Don't forget that these "bad assets" are our homes! Professional bankers and mortgage brokers advised private individuals to take poor risks. These professionals committed fraud. They lied to us. They lied to their superiors, who were only too happy to look the other way. A whole lot of deception went into this mess. Nobody in the banking industry was shocked when their loans starting going bad. They knew they had been making bad loans. They also knew they still got to keep the huge bonuses that they paid themselves. And they knew they could count on tax payers to bail them out. The same tax payers who are now also facing foreclosure and are suffering generally under the credit crunch.

The people who made this mess should be the ones to pay for it. The rich made money off of this. Tax them! They can spare it. Tax the war profiteering corporations who have been making billions off of our tax dollars by not rebuilding Iraq. Tax the oil companies. Tax the profiteers!

I think safety nets are an entirely reasonable part of an economy. But they should be there for people who need them. If I get sick and get laid off, I lose my house. If we can afford to help out robber barons, we can certainly afford to help out people who are having a rough time. How many people could get healthcare for $700 billion? How many kids could go to college? How many unemployed people could have an extra month of breathing room while they look for a job in a crap economy?

We're in the credit crunch because of fraud, certainly. But we're also here because of deregulation. Regulations are there to prevent things like this. They need to be re-instated. Our houses, our jobs, our economy are not playthings for speculation. Banks and insurance companies need to be kept separate. Our currency is not a toy for speculators. Our manufacturing sector hasn't gone offshore because of the magical free hand of the marketplace, it's gone offshore because of changes in tax laws. We have the power to control how we allocate our money, who gets and how resources are managed. We could re-instate the tariffs that used to protect our manufacturing sector and thus create jobs and reduce the carbon footprint of global shipping. We could start enforcing the laws that are supposed to protect unions and make safer, better workplaces. We could stop government outsourcing, so that people who provide public services are loyal to the public and when disaster strikes, we're not at the mercy of private firms, Blackwater and mercenaries. The government could actually govern! It could provide services. It could stabilize the economy. It could use our resources to help us, not the rich friends of corrupt officials. Things do not have to be like this.

The bailout is the wrong answer. If we have to save a company, we should own it. Nationalize, not bailout!

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