Go to Original
By Mark Silva
The failure of the bailout, for now, perhaps, is "a teachable moment.'
Ron Paul and Dennis Kucinich are on top.
Let history record that, for one fleeting moment perhaps this week, the most anti-establishment candidates for either major parties' presidential nominations this year - two who stirred a lot of emotion but attracted few votes -- were riding the wave of the victorious majority of the House of Representatives.
They balked at the bailout.
Paul, the Republican congressman from Texas, delivered a scowling speech against the Bush administration's $700 billion bailout of the banks and other financial institutions stuck with bad mortgage debt on Monday - when it failed on the House floor by a vote of 229-205. And Kucinich, the Democratic congressman from Ohio, stood alongside him. Until now, opposition to the war in Iraq was largely what united these two occasional hotspurs of the political debate.
"The beneficiaries of the corrupt monetary system of the last three decades are now desperately looking for victims to stick with the bill after they have reaped decades of profit and privilege,'' Paul argued on the House floor..
Kucinich calls this "a teachable moment'' in our times.
"Slowly, like the Titanic turning around, sentiments on the Hill shifted, and we heard congressmen capitulating and changing their tune a little, desperately trying to find ways to salvage the bailout without completely enraging their constituencies," Paul wrote on his Web site before the vote on the bailout, which he feared would succeed. "Inevitably, it appears Congress will call their constituents' bluff and the bailout will pass, because that is the habit Wall Street and Washington have fallen into.''
Inevitably, perhaps, the Bush administration will win some variant on the bailout, sweetened perhaps with some lures to make it more palatable to just a few holdouts in both parties.
"Lipstick on a bailout,'' Paul calls it.
But then, Paul and Kucinich will return to the vocal minority.
But for now, they are on top, and Kucinich's own explanation of the bailout, how the Treasury's purchase of $700 billion in bad mortgage debt - with money that ultimately the Treasury will have to borrow from the credit markets - is worth the reading, no matter what anyone thinks of the deal:
"Here is a very quick explanation of the $700 billion bailout within the context of the mechanics of our monetary and banking system,'' Kucinich wrote in an email today.
"The taxpayers loan money to the banks. But the taxpayers do not have the money. So we have to borrow it from the banks to give it back to the banks. But the banks do not have the money to loan to the government. So they create it into existence (through a mechanism called fractional reserve) and then loan it to us, at interest, so we can then give it back to them.
"Confused?
"This is the system. This is the standard mechanism used to expand the money supply on a daily basis not a special one designed only for the "$700 billion" transaction. People will explain this to you in many different ways, but this is what it comes down to.
"The banks needed Congress' approval. Of course in this topsy turvy world, it is the banks which set the terms of the money they are borrowing from the taxpayers. And what do we get for this transaction? Long term debt enslavement of our country. We get to pay back to the banks trillions of dollars ($700 billion with compounded interest) and the banks give us their bad debt which they cull from everywhere in the world.
"Who could turn down a deal like this? I did.
"The globalization of the debt puts the United States in the position that in order to repay the money that we borrow from the banks (for the banks) we could be forced to accept International Monetary Fund dictates which involve cutting health, social security benefits and all other social spending in addition to reducing wages and exploiting our natural resources. This inevitably leads to a loss of economic, social and political freedom.
"Under the failed $700 billion bailout plan, Wall Street's profits are Wall Street's profits and Wall Street's losses are the taxpayers' losses. Profits are capitalized. Losses are socialized.
"We are at a teachable moment on matters of money and finance. In the coming days and weeks, I will share with you thoughts about what can be done to take us not just in a new direction, but in a new direction which is just.''
No comments:
Post a Comment