Congress, Hold on to that $ 700 Billion for a while!

Written by: publius on Sep 21, 2008 10:17 PM EDT

1. Capital can be put to much better use than whatever it is Wall Street does with it:

"Finance set the terms of corporate behavior over the past quarter-century,
and not in ways that bolstered the economy.
By its actions-- elevating shareholder value over the interests of other
corporate stakeholders, focusing on short-term investments rather than patient capital,
pressuring corporations to offshore jobs and cut wages and benefits -- Wall Street plainly preferred to fund production abroad and consumption at home." *

2. This is a rerun of the Reagan tax cut/national debt binge in the 80's:
Postmortem of October 1987

"What might have been is lost forever. The jobs that never opened up, the goods that were never made and enjoyed, the services that were never performed - these were forestalled or aborted by the speculating. 
Their ultimate loss or nullity is what Wall Street cost the nation, and the world. . . .
. . .the "supply side" tax cuts of 1981-82 were mistakenly supposed to stimulate savings and investment. . .These confused policies gave a trillion dollars of American money to people who couldn't use it; these people entrusted it to Wall Street; and Wall Street flushed it down the drain." **

(Note: Point No. 8 worth a look at)

3a.  Congress is responsible for the public purse and has been slow to
shut the treasury vault while there still something left inside:
3b. The nominee chose to follow directions from his Wall Street advisers and contributors:

Friday Sept 19, 2008
Thus, as Congress was finally insisting that IT, AFTER ALL  must sign off on spending
the public treasure (see Constitution), the Rubin steered Democratic nominee was
simultaneously handing a blank check to Paulson and Bernanke.

4. STEP ONE Fire the unRegulator and the Investment Banker

At least McCain called for firing SEC's Chris Cox. Paulson was CEO at Goldman Sachs for Mammon's sake! He is not fit to negotiate and sign for the public any deals with the Finance Industry.

5. There ain't a big rush here

Money moved back into stocks this past week whenever it suited the investors.
When not going into stocks,  money looking for a place to go last week poured into
US Treasuries with zero percent return (negative after fees).  Where else is it gonna go?

6. Way too much time, attention, money, and influence commanded by
the Finance industry. This is a symptom of a seriously ill world power. 

"Through the prior centuries the most reliable signals of full-fledged or relative decline
came when a leading power, its leaders overconfident from a generation or two at the
center of world commerce,embraced global finance and services as the political
economy of the future, allowing production or seafaring to fade."  ***

7. Use the "financial crisis" to reorient investment policy in line with national priorities  and the general welfare.

This is a grand opportunity to knock Finance off its perch atop the "Commanding Heights" of our economy and make a bold turnaround for an Apollo, or better yet  WWII, level
of public and private commitment to an accelerated launch of the sustainable 21st
century economy.

8. The Democrats hold the means to exact a winning price for paying
off Wall Street's losing proposition.

If we can summon up an instant  $ 5 trillion increase in the national debt to shore up
credit machinery We can, and are even compelled to, purchase bargains like universal health care, federal share of K-12 ed, and sustainable energy.

There have been several bills vetoed in this Congress - SCHIP for one.  Many more that could not get 60 votes to move out of the Senate. The Democratic Party  is now being commanded to sign over $ 700 Billion no questions asked.

If all those vetoed and fillibusted priorities were worth the effort in the first place, then they ought to get enacted before Finance gets its big "rescue" swindle loot.

Attribution:
* Harold Meyerson, Wall Street's Just Deserts,
Washington Post, September 18, 2008
** George P. Brockway, The End of Economic Man -
Principles of Any Future Economics, 1991
*** Kevin Phillips, Wealth and Democracy -
A Political History of the American Rich, 2002

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