When it comes to political issues, I have a rule that’s worked well for me: Bring extra skepticism to any plan when its proponents declare that it has to be rushed to approval.
I’ve observed in local politics how people who want to get a project approved with little scrutiny invent artificial deadlines for their project’s passage. They declare that state funding for the project will not be available after that date, and so the project needs to be approved right away. Then, they’ll make the same argument the next year when they propose the very same project all over again.
The call to hurry up before all is lost is a ploy that’s often used to prevent people from spending the time to examine a proposal carefully and rationally. This ploy was used in the passage of the Patriot Act back in 2001. Congress passed the law without reading it, and crippled Americans’ constitutional freedoms in the process. It turned out that the Patriot Act was not truly a response to the attacks of September 11, 2001. The law’s provisions had been crafted ahead of time, and its supporters were just waiting for the right moment to sell the package.
The same thing is happening now with the 700 billion dollar Wall Street welfare package. The Times of London reports,
“Henry Paulson, the US Treasury Secretary, met lawmakers from the Republican and Democratic parties to persuade them to hurry through the biggest financial intervention in America since the Great Depression.
The bail-out plan had been drawn up by Mr Paulson and Treasury officials over the past few weeks, but had been kept secret for fear that Congress would have time to publicly oppose such a deal.”
The crisis of incompetence on Wall Street has been clear for quite some time. So, why does the government need to hurry up now to pass legislation that deals with the problem? If the Department of Treasury could work slowly for weeks to craft the legislation, why does Congress now need to hurry up and pass it without giving it the scrutiny it deserves.
The cost of this socialist grant program for sloppy Wall Street investors is actually much greater than 700 billion dollars. It’s 700 billion dollars plus interest. This 700 billion dollar giveaway to fiscally incapable fat cats will be deficit spending, meaning that it will be money that the government borrows, and taxpayers will have to pay back later.
If I wanted to wreck the federal government of the USA, I might identify this bailout legislation as just the tool to get the job done. We all need to ask how it helps the economy for Wall Street to get a special surge of cash when that money is coming out of the pockets of hard-working American families who don’t have the luxury of sitting back and letting their investments do the labor for them.
If there really is such a rush, and if the consequences of Wall Street failure are truly so monumental, why don’t those individuals who will benefit from the government bailout pay for the scheme? Why not pass the legislation – along with a special investment income tax that will provide the money to make the deal work? Add a provision that exempts the first $75,000 in investment income, and middle class Americans won’t be harmed.
Maybe that tax on wealthy investors is not the best answer. I don’t know whether it is, and I can’t know whether it is. Congress has not been given enough time to sort through this problem – and that’s how the White House wants to play the game.
If there really is such a terrible hurry, why don’t we just declare the next week to be a financial holiday, with the markets closed? Above all else, we must not rush into reaction, especially not when the very people who have proposed the solution to this long-looming crisis are the very same people who have managed the economy into its current rotten shape in the first place?
Skepticism, not a mad dash to push through the latest financial scheme, is what’s called for.
Given that the staff of the New York office of the failed investment bank Lehman Brothers are getting 2.5 billion dollars in bonuses, even after the collapse of their company, there is substantial cause for suspicion.