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If You Break It, You Get a $700 Billion Bail-Out

    The giant Wall Street bailout has touched off a cascade of outrage among us common folk. Dolores Kantrowitz of Miami Beach, responding to my column about the $700 billion gift to investment bankers, captured the prevailing sentiment nicely in an e-mail despairing that “that all crooks go unpunished.’

    “Enron, the President, Republicans and Democrats alike - get
a slap on the wrist when they are naughty."

       But why not require them, Kantrowitz suggested, to give back “all the money they stole. This is what I taught my children - if you break it you replace it. If you steal it you
return it or if you already used it - pay for it with an apology.

      “Why are the crooks getting a slap - a minimum fine? If they go to prison it is a
white collar country club.   
        “Every one of us is to blame. I know that. It’s the Me society
and the heck with you.  Someone has to cry out until it sinks in.”

      Frances Griffith, a regular correspondent, was equally adamant:

      "Since I am a taxpayer, paying for my house on time, paying all of my taxes on time, paying all of my other bills on time, including paying off my credit card every month, I think that when I become an owner on Wall Street I should be a voting member of a Board of Directors that will vote on all decisions including golden parachutes and bonuses.

       "My resume includes the fact that I have bought and sold several houses without ever defaulting on a loan. Also, most years of my life I've had a budget and lived within it. I think those two things alone should be great qualifications.

       "I don't think I should be the only one. I think all of the CEOs and Board members should have to have those qualifications," Griffith wrote.

       Law Professor Donald Jones wrote:

        "We need to rescue  the victims, the working families who are loosing their homes, not  the perpetrators of  the crisis.  There are 10,000 foreclosure filings a day in the United States.  This is the economic equivalent of a tidal wave which threatens to  sweep away all prosperity.  The federal government needs to massively restructure loans , lowering  the cost of loans to borrowers.  This massive restructuring will stop the  wave.   Once the tidal wave of  foreclosures has been stopped the housing market will    recover, though at more affordable prices and  in  turn the majority of financial institutions will recover.  This bears a resemblance to policies of debt forgiveness that the federal government used during the depression.   This kind of government intervention is strong medicine but it is less radical than Paulson's own  form of  corporate socialism."

        Jones was just getting wound up:
        "Secretary Paulson's alternative  will likely leave the struggling homeowners to continue to drown in the flood of foreclosure.   In our system those who take the risks reap the rewards or take the consequences.  Paulson's proposal changes the rule of  individual responsibility, which the republicans love to talk about, at  taxpayer's expense.    In Bush's words, Wall  Street  got drunk,  and Paulson's proposal is for the tax payer to  pay the tab for its carousing .   As wall street  outstretches its palm for yet another handout the American people should say to them what the Republicans say to the urban poor,  'work  not welfare.' "
       My good friend a Slats was blunter yet in his evaulaton. "Do you think that before Hank Paulson gets his check without any restrictions or recouse in how he spends it, just ONE PERSON might suggest that this is the last chance Bush and Cheney have of making all their big spender buddies happy."


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I agree that the people of this country should not have to bail out the credit industry, but we are going to just the same. Why? Because the 42nd President of the United States and the Congress not only made it possible for investment bankers to operate the way that they did, but Congress, most notably the Democrat leadership blocked attempts to rein in Freddie Mac and Fanny Mae in 2003 and 2005 [If you doubt this, just follow the money. It leads back to Dodd, Franks and Obama among others]. In addition, the Clinton administration forced lending institutions to make loans to unqualified borrowers or face Federal legal action. They made the loans, which were guaranteed by Freddie and Fannie. Many, if not most, of these loans would not have been made if the Federal government had not encouraged and, in some cases, forced the loans to be made. Our elected representatives are ultimately responsible for this mess and therefor so are we. Maybe it is time to take a good hard look at exactly who are elected representatives are working for. It may be time to change the guard in Washington. In the meantime, we need to get the best deal possible for the taxpayers. Then, move on.

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