Tula Connell from AFL-CIO Now blog: No Blank Check on Bailout!

This is directly from Tula Connell's DailyKos story:

Congress: No Blank Check on Bailout!

Only a few months ago, the Bush administration repeatedly bashed attempts by Congress to expand health insurance coverage to an additional 4 million children, saying the $35 billion involved was too much to spend.

But now Bush is rushing to ram through a $700 billion corporate bailout—new estimates put the figure at up to $1.8 trillion—for companies whose greed outpaced their brains and plunged our nation into a financial debacle. (Nobel Prize winning economist Joseph Stiglitz concisely calls the disaster “the fruit of hypocrisy.”) The U.S. public isn’t buying it. Only 28 percent support the bailout plan as proposed.

The bailout legislation that U.S. Treasury Secretary Henry Paulson is insisting Congress pass immediately with no changes would give unprecedented power to a single political appointee: Paulson.

It’s not bad enough that Paulson, the former Goldman Sachs chief, wants America’s taxpayers to buy millions of worthless bonds from U.S.-based companies—with no penalties and no oversight for the corporations responsible for this mess. He wants to load us with the same junk debt from foreign corporations—overseas corporations like UBS, which just so happens to employ Phil Gramm, economic guru for Sen. John McCain.

As Attaturk writes on Firedoglake today:

Phil Gramm, of course, is the architect of McCain’s response to the housing mortgage crisis (laughable as it was) this spring; he may still be his Treasury Secretary nominee. He is also vice chairman of UBS’s U.S. division and a lobbyist for UBS.

Under the Bush administration and its McCain clone, it’s not surprising that Gramm would get bailed out. Because while he was in the Senate, Gramm introduced a bill to deregulate the financial industry, creating the monolithic commercial-investment banks that now are going under—and that are asking for us taxpayers to bail them out. Oh, and McCain was among the senators joining Gramm in pushing the bill to deregulate.

Surely, McCain now must regret his actions?

Nope. As Attaturk notes, this exchange took place just yesterday:

Q: In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?

McCAIN: No. I think the deregulation was probably helpful to the growth of our economy.

With 84 lobbyists from Wall Street on his campaign, McCain is so embedded in creating this crisis, he was still saying just last week that the fundamentals of the nation’s economy were strong.

The AFL-CIO is urging Congress to step back, take a deep breath, and not pass the Paulson bailout plan as it is written. Take the time to get it right—and don’t give Bush a blank check. Such a plan must not be overseen by one political appointee, but by independent actors who are looking out for the public interest—not corporate bedfellows.

In a letter to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry Reid (D-Nev.), AFL-CIO President John Sweeney urges that any bailout contain a stringent set of conditions:

  • A moratorium on home foreclosures that gives homeowners a chance to restructure their loans.
  • An economic recovery and jobs package, including extended unemployment benefits, fiscal relief for state and local governments and a major investment in our nation’s crumbling infrastructure.
  • An immediate strengthening of current financial regulations and a commitment to further regulate our financial institutions to protect the public’s money when it is give to private companies.
  • Strong public oversight and transparency at the agency created to oversee the expenditure of billions of dollars of taxpayer money to rescue private companies.

As Ian Welsh points out on Firedoglake, the Paulson bailout means the banks bailed out don’t have to change how they do business. In 2007, Wall Street paid itself bonuses equal to the raises of 80 million Americans, but we’re expected to pay $2,324 dollars each (every man, woman and child) to bail them out. And that’s only if the bailout stops at $700 billion.

As written now, the Paulson bailout plan is totally unacceptable, as it contains no independent oversight or reasonable conditions on the use of taxpayers’ money. It is summed up well by both journalist William Greider and writer Richard Behan.

Greider calls it an historic swindle.

Behan, comparing Bush’s rush to pass the bailout with the Bush administration’s rush to the Iraq war, sums it up as “The $700 Billion Bailout: One More Weapon of Mass Deception.”

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