pk

"The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression."
http://news.yahoo.com/s/ap/20080920/ap_on_bi_ge/financial_meltdown

The (corporate) media are now telling us ( they've actually told us this several times in recent months, in relation to various bailouts) that the Fed and Paulson HAVE to be given massive blank checks by Congress to rescue Wall Street. Oh yes, oh yes, we're all gonna die if we don't give Wall Street what it demands! Sing along everyone!!

And, of course, Congress will roll over. Both Prez candidates are already on board with this Suckering of the People.

It's all so funny, in a way. How are we going to 'solve' the bad debt crisis? With possibly a trillion in MORE BAD DEBT!!!! It really takes genius to come up with a plan like that, doesn't it?

Now here's what COULD be done, in my opinion. The government could buy up all the bad mortgages at their full price. This would be paid for by raising taxes on the rich - especially on Wall Street wealth. Homeowners would still be expected to pay off their mortgages, but with no increased interest rates and with principle adjustments where necessary. Yes, some kind of beaurocracy would be needed to administer this. HORRORS!!! :0

Also, interest rates on credit cards would be capped at something like ten percent. The government would return to sensible financial regulation. Wall Street is like a gigantic poker table/ monopoly game. Ok, there's nothing wrong with that, and it can even be good. But the riskier exchanges need to be separated from the more fundemental ones. The closer a financial product is to actual assets, the less risky it is. That said, there also need to be regulations against selling and reselling a product to drive up the price. No matter how strongly asset based a financial product is, it can be made meaningless by the inflation caused by tossing the ball back and forth.

Market manipulation has been regulated for centuries. It's not a new problem and the need to regulate it isn't new either, despite all the cries from the 'serious people' that 'this is all new and we need all kinds of new approaches (that of course only 'experts' can provide, experts who always turn out to be highly interested participants)'. Sensible regulation is necessary (and it's one of the things that shows what a huge lie the 'free market' myth is, as it is usually propounded by those who are obsessed with it).

Most importantly, larger issues relating to the health of the economy, that is, the fairness and open-ness of the economy, have to be addressed. For starters, existing regulations preventing harrassment of unions and unionization drives have to be enforced. Unions and unionists, environmentalists, cities and states, etc. would have to have a place on the Fed, and the Fed would have to be brought much more closely under Congressional control. Globalization - which has been the most important driver of increased poverty and increased gaps between rich and poor nationally and worldwide - has to change direction. Globalization is inevitable. The choice we face is HOW we globalize. So far, globalization has been driven exclusively by the interests of the global financial elite. That can't continue. All interests have to be taken fully into account. Labor, environmental concerns, safety concerns, concerns of native cultures and of traditional lifeways - all of these belong at the the table at least as much as the concerns of the top 1%.

If the rich really are patriots, they would, will, be the first to ask for increased taxation, especially considering that it was their class, by and large, that created and/or contributed to the conditions for, the problems we face. Some, like Warren Buffet, seem to recognize that the rich should pay their fair share. Buffet:

"stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes, while his employees paid 33% of theirs despite making much less money"
http://en.wikipedia.org/wiki/Warren_Buffett