The Saturday Rant

The Saturday Rant
Bailouts, Broken Promises, and the Big Squeeze
Saturday, November 15 2008

If it’s Saturday, it’s time to rant. As usual the week provides plenty of fodder for the verbal cannon, sometimes it is tough to choose only a few topics, but I have decided those most worthy of my gunpowder for this week are the failed economic bailout, the potential promises from the campaign trail that are likely not to be kept, and the situation that the average worker finds themselves in.

Henry Paulson is either incompetent, a charlatan, or just a flat out liar. And just like the Bush administration decision to sell us on a war in Iraq based on false premises, it doesn’t really matter what category the deception falls under because the end result is poor policy decisions that only exacerbate an already difficult situation.

Paulson and the Treasury Department he heads sold us on the notion that this bailout had to happen and it had to happen yesterday, lest we all fall into the abyss of economic ruin. But just as the Bush clan sold us on one idea then proceeded to change the game plan and the ultimate justification for it as quickly as you can say hoodwinked again, so Paulson and his crew are switching from buying up bad loans to buying bank stocks to who knows what. Like they say about the weather in the Midwest, if you don’t like Paulson’s bailout plan today, just wait because it’s likely to change tomorrow. Of course what do you expect when you’ve got the fox guarding the henhouse, and the body that is charged with oversight is that little old boys club we like to call the United States Congress.

Did anyone really think that the Congress would look out for the interest of their constituents over those of their clients? They rattled a few sabers against the Treasury plan, but in the end, after some heavy drama, special meetings, and despite overwhelming public opposition, they passed the bailout plan, even threw in an extra 150 billion in pork just for the heck of it. Now they tell us we need another bailout, but of course we can trust them to get this one right. When does it all end? When the foreign governments that are fueling our economic engine decide that the costs and the risks of investing in our debt are too high and they take their money elsewhere. When that will happen is anyone’s guess, but rest assured that it will happen if we continue to spend more than we bring in, it is simply a matter of time.

What also seems to be only a matter of time is when we can start chalking up all of the broken promises of the recently concluded presidential campaign. I am focusing on three key areas where the promises made were very clear and unequivocal, and right now I will set the over/under on promises kept at one.

The issues are withdrawal of the troops from Iraq, lowering taxes on the middle class while paying for it by raising taxes on the upper class, and starting a comprehensive program of health care reform. Barack Obama and the congressional Democrats ran on this platform, and we the people have been tuned in, and I believe will continue to stay turned on to see how these issues are dealt with. There was unprecedented interest and excitement regarding this campaign, but under the theme of be careful what you wish for, the Democrats now clearly hold the reigns of power and will be expected to come through and produce results on these issues.

Personally the withdrawal of troops seems like a no-brainer, and the easiest one for Obama to pull off because unlike the next two it does not require the cooperation of Congress and it has widespread public support. But I am also hearing that the Iraqi’s now want us there until 2011, and so I can see the justifications being offered to keep our soldiers there longer, and all I will say to our president-elect is to remember Hillary. She was the clear front-runner in this race until liberals like myself who feel strongly about the war decided that her vote for the war and refusal to acknowledge it as a mistake made her candidacy a non-starter for the doves. The quickest way to lose the support of the liberal base is to renege on the promise made regarding Iraq.

Show us the money! I am personally of the mindset that tax cuts for the middle class are not the most fiscally responsible way to go, and that the real problem lies in corporate greed and a rigged system that has kept wages stagnant while every possible ounce of productivity is extracted from the American worker, what I term the Big Squeeze. We are asked to do more work effectively for less, because while our wages tread water, the cost of living continues to rise, as do the exorbitant bonuses and benefits accorded to those at the top of the ladder. Tax policy won’t change that, but every bit does help and I certainly won’t turn it down.

But the tax cut for the middle class was sold along with an increase on the upper class as a means of paying for it without further increasing the national debt. I am sensing that the Obama camp is starting to back off of their pledge to pay for these cuts, and I have little to no confidence that the Congress, who ultimately is responsible for passing any such legislation, will actually pull the trigger. To make matters worse, all tax bills must originate in the House, and those members are already well into their reelection for 2010 mode and are unlikely to anger their benefactors who fund those expensive campaigns. How many of those donors do you think make under a hundred grand and how many make over a quarter of a million? Exactly.

Health care will be the most difficult to pull off because it requires not only Congressional support, but bi-partisan cooperation within the Congress. It also requires long term solutions in a system that is designed for the short-term. We haven’t even seen the 111th Congress and our new president sworn in, and already the fixation is on whether Sarah Palin will be the Republican front-runner for 2012. And we’re supposed to believe that the ADHD Congress can focus long enough to deal with real long term issues that need to be addressed now, like health care, energy policy, education reform, and environmental issues. Oh yeah, maybe I missed the memo on when we solved the whole Social Security solvency issue, but that one is hardly even mentioned anymore. Maybe they opened the lockbox they were so keen on mentioning back in 2000 and took care of that one. What’s that, the Bush tax cuts for the upper class and the ruinous Iraq War shattered the lock box? Curses, foiled again!

You have to have a sense of humor when dealing with where we are as a nation, lest you turn into a perpetual worrier or worse, one of those conspiracy theory types who is convinced that 9/11 was an inside job, that the Fed is a secret cabal bent on world domination, and that the government is trying to kill us all off by putting deadly particles in the air and allowing them to rain down on unsuspecting populations below, what is known as cloud seeding. I’m not making this stuff up either, there are many people who buy into these ideas, I know because I know some of them quite personally, they are what John Kerry aptly and I might add with great humor recently called the tin foil hat wearing black helicopter crowd.

A sense of humor, along with a keen watch on those in power is required to live in the great American democracy of the early 21st century. While we may not be able to actually effect the change we need, at least we can enjoy the ride. We still have a system of republican democracy that beats most other alternatives, and besides, if our government actually kept its promises and worked efficiently, effectively, and competently, what would a guy like me have to rant about on Saturday mornings?