Thursday, October 2, 2008

The Senate Gets in Line

As expected, the screws have been tightened on the US Congress after the House Republicans killed the $700 billion bailout. The Senate passed its version nearly 3 to 1 (and with extra earmarks to purchase the support of members of Congress [at our expense]). Nothing makes my students angrier than when I explain to them the process of logrolling--i.e., the use of taxpayers' money to buy the votes of Congressional members.

Just how sweet is the Senate's sweetener? An extra $100 billion of tax cuts for business, the same people whose inability to do business has led to the current environment of foreboding fear about our economic future. That little ditty helped ensure a 74-25 vote.

The House version will likely be different, but a re-vote is going to happen. Congressmen Ramstad and Barrett, non-supporters on Monday's rebellion, are already in line to be "converted." They will likely be followed by other non-supporters (the types who used Speaker Pelosi's otherwise forgettable speech as a rationale to vote no on Monday [instead of using their conscience]). And, sadly, candidate Barack Obama has "convinced" several key members of the Congressional Black Caucus, including John Lewis, to switch their vote to yea on the legislation. By the time the vote is taken in the next day or two, passage is almost guaranteed.

What does this mean? It means that nearly a trillion dollars over the coming years will be used by an unaccountable Department of Treasury to assume the losses (through asset purchase) of people who cannot conduct their own business. Of course, your bills will still be due and with interest. Nothing in this legislation will do anything for you the taxpayer or homeowner or debtor. Nothing will compel these companies to begin giving out loans again anytime soon (one of the excuses by supporters for passage).

And our friends from Wall Street (the kind still collecting on your bills while telling you to pull yourself up by the bootstraps) will be able to conduct the same kind of business practices that made possible our financial crisis. That is because there is no mention in any of these contrived discussions about bringing back the Glass-Steagall Act, the overturned set of regulations which would have prevented the third party involvement of non-lending institutions in questionable loan and mortgage practices. Of course, it would not have addressed the speculative bubble and diminished home values, but then again neither does Congress's boondoggle of a bill.

So, que up, my dear citizens. You are about to get fleeced. Enjoy the ride and never forget. Your payments are due at the beginning of the month, and if you fail to pay it is off to the land of higher interest, collection agency calls, and then your neighborly dear old judge (who will look upon your financial crisis with the mercy of a greed monger from a Dickens novel).

No comments: