VIDEO: GOP Brags That McCain Will Continue Bush's Economic Legacy
By David Sirota
July 15th, 2008 - 12:21pm ET
Last week, I appeared on Fox News to discuss the inflammatory comments by Phil Gramm (John McCain's top economic advisor) and how those comments really epitomize the Republican Party's country clubbish, let-them-eat-cake outlook on the economy. Notice about half-way through as the Republican strategist I'm debating actually acknowledges that McCain's major idea for fixing the economy is continuing George W. Bush's tax policies - and that when she's called out for saying that, she tries to deny what she just said:
The interchange is instructive for two reasons.
First and foremost is the admission: namely, that Republicans still want America to believe that the way to steady the economy is to follow Bush's efforts to slash taxes for millionaires. As I show in the very first chapter of my book, this is a prescription being rejected even in some of the most conservative parts of the country.
Second, there is the denial: When called onto the carpet for wanting to continue the policies of the most unpopular president in history, Republicans start running for cover to the point of claiming they never said what they just said. The denial is a tacit acknowledgment of the power of the populist uprising now boiling throughout the country. The GOP knows the country is very angry at conservatives' free market fundamentalism - and so will deny and obfuscate to pretend they aren't championing such fundamentalism.
Of course, moments after appearing on Fox, my email in-box was filled with hate mail from conservative viewers. For instance, Dave in Bokeelia, Florida told me "Gramm was abolutely correct" in blaming Americans for the economic downturn, then asked, "Why don't you get and your boyfriend move to Denmark or some other socialist country?" then declared, "Obama has already lost, you moron."
A guy named Charles angrily asked, "When did raising taxes ever stimulate economic growth?" then said "raising taxes will only cause a deeper recession," and added "Do your homework before berating someone on television." Apparently, he forgot that our most recent economic boom during the 1990s came immediately after President Clinton raised taxes on the wealthy.
My favorite was from a guy named Steve who wrote, "hey girlyboy, do you have any idea how pitiful you look to normal folks when you open your sissy moth beging the government to help?" (that is his spelling - for real).
These comments show how powerful conservative propaganda has been - it has convinced a number (albeit a dwindling one, according to polling data) of people to believe that the real problem in our country is that we have too few royalists running the government - not too many. Though this conservative ideology is clearly on the ropes, the Fox News clip shows that the GOP is going to continue trying to ram it down our throats.
This is an ongoing series from the national tour for THE UPRISING. You can order The Uprising at Amazon.com or through your local independent bookstore.
From: Coffee House
Bush and Congress Want to Raise Your Taxes to Help out Fannie and Freddie's Management and Shareholders
That's the word from the press reports. Apparently the government is going to hand Fannie and Freddie bucket loads of taxpayer dollars, no questions asked. The NYT reports that they will be given access to $300 billion of government loans at below market interest.
That's nice. Shareholders who would have lost all their money if matters were left to the market, may instead walk away with billions of dollars. Similarly, the top executives of these companies, who earn salaries in the millions and tens of millions of dollars, will keep collecting their paychecks.
We should all be thankful that the government intervened. After all really rich people and investment fund managers can't be expected to be able to handle their investments on their own. They need the helping hand of the government when they really screw up.
Similarly, we don't want the fate of highly paid executives to be left to market. If this happened, some might lose their vacation homes and private jets.
Some people say that we had to hand tens of billions of dollars to the country's richest people to prevent a financial collapse. This is simply not true.
We had to keep Fannie and Freddie in business, but we could have done this by putting conditions on the bailout. The government uses conditions all the time when it offers help to low and moderate income people. Unemployment insurance, TANF, food stamps, and even student loans come with all sorts of conditions.
It is only when it comes to giving money to extremely rich people that we find it impossible to impose conditions. Again, we could have told Fannie and Freddie that no executives will get more than $2 million a year in total compensation. We could have told their shareholders that they are out of luck, because that is what is supposed to happen when you invest in a bankrupt company.
Instead, we told the people who work as truck drivers, school teachers, and fire fighters that they will have to pay more in taxes to help some of the richest people in the country escape the consequences of their own stupidity. While kicking the poor is always fun for politicians, neither the Bush administration nor Congress are prepared to tell the very rich that they are on their own.
They Rob You With a Fountain Pen
July 11th, 2008 - 11:39am ET
“As through this world I’ve wandered, I’ve seen lots of funny men;
Some will rob you with a gun; And some with a fountain pen.
Woody Guthrie
Look out folks, you’re about to get fleeced. We’re getting sent the bill for the bankers’ bacchanalia. They had the party, made off with the dough, and we’re going to end up paying the price.
Here’s a brief description. Housing prices continue to fall. Down some 8% last year; another 8% in the first quarter this year, with a long way to go. By next year, experts predict one in four homes with a mortgage will be underwater – worth less than what is owed.
Rapacious bankers and investors drove this folly, inflating a housing bubble by huckstering mortgages to folks who couldn’t pay them or didn’t understand them, inventing exotic securities based on mortgages, marketing them widely, without a clue to their actual worth. Under the conservative hand of Alan Greenspan, the Federal Reserve sat idly by as the bankers had their predators’ ball. Now the banks are in trouble. Their basements are filled with securities that have no market. They are scrambling to sell off assets, raise new capital, and unload the lousy paper.
Who gets stuck with that? Check out the article by the invaluable Charles Morris from the Washington Independent, here. Morris, a recovering banker himself, provides a peak behind the screen.
The Federal Reserve, he estimates, has traded the banks about $500 billion in Treasuries (US bonds, backed by the good faith of American taxpayers) in exchange for dubious instruments, about $200 billion for mortgage backed securities. It is paying 98 cents on the dollar for securities that may be worth 60 cents, or may be worthless.
Meanwhile, the government is considering a bailout of Freddie Mac and Fannie Mae, two private government sponsored entities that finance about ½ of the $12 trillion US housing market. In the fourth quarter of last year and the first quarter this year, Morris reports, these entities have been financing mortgages at about twice the level of actual mortgage borrowing. Where did the extra money go? It went to take more of the worthless paper off the hands of banks and investors.
If Freddie and Fannie go belly up, the entire financial house of cards will collapse. So, as John McCain promised yesterday, they won’t be allowed to fail. But if the taxpayers end up bailing them out, then we’re looking at a staggering increase in US debt, and losses of hundreds of billions.
Trying to find a floor for housing prices makes a lot of sense. Helping homeowners who got fleeced by making the banks eat their losses while allowing people to keep their homes either as renters or with affordable mortgages makes sense also.
But remember one thing. The bankers and investors are walking away with millions of dollars in private profits built upon reckless gambling, secure in their confidence that the federal government would not let them fail. And now we’re getting the bill
The only sensible way for Americans to pay this bill would be to levy new taxes of the wealthiest Americans who profited from the folly. Whenever you hear conservatives complain about taxes, whenever you hear them rail about waste in government, whenever you hear their spurious arguments justifying tax breaks for the wealthy, remember the above.
The biggest waste in government is bailing out private follies. The largest thievery comes from privatized companies making out like bandits. The biggest crooks aren’t welfare moms; they are the guys who rob you with fountain pens. And if we have to bail them out to limit the damage to the innocent, the least we can do is tax the money they made off with to pay the bill.
If you'll gather 'round me, children,
A story I will tell
'Bout Pretty Boy Floyd, an outlaw,
Oklahoma knew him well.
It was in the town of Shawnee,
A Saturday afternoon,
His wife beside him in his wagon
As into town they rode.
There a deputy sheriff approached him
In a manner rather rude,
Vulgar words of anger,
An' his wife she overheard.
Pretty Boy grabbed a log chain,
And the deputy grabbed his gun;
In the fight that followed
He laid that deputy down.
Then he took to the trees and timber
To live a life of shame;
Every crime in Oklahoma
Was added to his name.
But a many a starving farmer
The same old story told
How the outlaw paid their mortgage
And saved their little homes.
Others tell you 'bout a stranger
That come to beg a meal,
Underneath his napkin
Left a thousand dollar bill.
It was in Oklahoma City,
It was on a Christmas Day,
There was a whole car load of groceries
Come with a note to say:
Well, you say that I'm an outlaw,
You say that I'm a thief.
Here's a Christmas dinner
For the families on relief.
Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.
And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home.
Rise and Fall of the Enron Boys
posted by William Greider on 05/25/2006 @ 3:57pm
Normally, I am a "bleeding heart" when it comes to long prison terms, but an appropriate sentence for the Enron boys might be six trillion years. Kenneth Lay with his million-dollar smile and Jeffrey Skilling with the cold, confident eyes of a viper made their company into the symbol and showpiece for a glorious era. It was the hyper-modern and market-efficient "new economy," in which the concept of wealth falling out of the sky became briefly hip and widely believed in respectable circles.
Enron led the way. Lay and Skilling showed us how it's done. And when Enron fell, the great national delusion turned to catastrophe. Unwitting investors lost $6 trillion overall. Millions of innocent bystanders lost much more in terms of their lives. So let Skilling and Lay now serve as symbol for the shame of modern American capitalism. Let these guys do the time for all those others, the corporate titans and financial con men, who got away.
Justice sometimes proceeds in strange ways. I am opposed to public hangings and other forms of scapegoating, but perhaps this time we need a spectacular ritual sacrifice to amplify the point made by that swift, sure conviction in Texas. These men in the good suits are criminals--criminals!--who must be made to set an example for all ambitious people who toil in business and finance.
These two thugs looted pension funds and destroyed the personal savings of families. They stole money from the rest of us, not to mention from government and other non-glamorous business enterprises. They rigged energy markets to drive up prices and bilk defenseless consumers (an old-fashioned swindle borrowed from nineteenth-century robber barons and newly decriminalized by deregulation). They swallowed viable, productive companies and wrecked them, especially wrecking the livelihoods of their employees. And, worst of all, they were best pals with politicians and political leaders as well as the most prestigious names in banking and finance--connections the Mafia would die for!
Sorry, am I shouting? My exuberance over this verdict is a mixture of joyous fulfillment and lingering doubts about the impact. Since the meltdown of the stock market in 2001 and the avalanche of scandalous revelations that followed from hundreds of corporations, I have thought the political system and the financial system and even the public at large did not sufficiently get the message. The pervasive rot in American capitalism is much deeper than acknowledged. The various forms of fraud by which millions of people are separated from their money continue in practice, often blessed by law itself.
Still flourishing, likewise, are the leading Wall Street firms--Citigroup, Merrill Lynch, JPMorgan Chase, to name a few--that showed Lay and Skilling how to do the fancy financial footwork, converting "debt" into "revenue," so that stock analysts could tout Enron's rising "profit". This was fraud too, but nobody from the banks went to prison (they paid millions, even billions, for no-guilt settlements with government and injured investors). Message to America: Don't rob the Seven Eleven with a six-gun. Rob the general public with pen and computer.
Congress, meanwhile, claimed to "toughen" financial laws, but they did not get reform halfway done. Now the Chamber of Commerce and other front groups are back in Washington insisting that the rather mild reform measures be scrapped too. They may very well succeed, if the public is not aroused. The media can take care of that. They will be describing this verdict as "an end of the era."
Wrong again. Thet era of corporate corruption, financial swindling and blue-sky illusions is not over. The players are merely paused, waiting for the marks to re-enter the casino. Perhaps Kenny Boy's conviction will remind people that the game is still fixed and those guys in good suits are the dealers.
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