Continuing from my last post…
Joseph Stiglitz, Nobel prize winning economist at Columbia University, argued in the September 26, 2008, edition of The Nation (“A Better Bailout“), that Wall Street banks would be celebrating today, as the U.S. Congress votes to pass something it would never consider for struggling working class citizens in crisis: a massive handout to the alleged wealth creators:
the banks realized that they were about to get a free ride at taxpayers’ expense. No private firm was willing to buy these toxic mortgages at what the seller thought was a reasonable price; they finally had found a sucker who would take them off their hands–called the American taxpayer….
Paulson and others in Wall Street are claiming that the bailout is necessary and that we are in deep trouble. Not long ago, they were telling us that we had turned a corner. The administration even turned down an effective stimulus package last February–one that would have included increased unemployment benefits and aid to states and localities–and they still say we don’t need another stimulus. To be frank, the administration has a credibility and trust gap as big as that of Wall Street.
If the crisis was as severe as they claim, why didn’t they propose a more credible plan? With lack of oversight and transparency the cause of the current problem, how could they make a proposal so short in both? If a quick consensus is required, why not include provisions to stop the source of bleeding, to aid the millions of Americans that are losing their homes? Why not spend as much on them as on Wall Street? Do they still believe in trickle-down economics, when for the past eight years money has been trickling up to the wizards of Wall Street? Why not enact bankruptcy reform, to help Americans write down the value of the mortgage on their overvalued home? No one benefits from these costly foreclosures.
The administration is once again holding a gun at our head, saying, “My way or the highway.” We have been bamboozled before by this tactic. We should not let it happen to us again.
Excellent questions, which means they will go unanswered. [Update: the current bailout plan has just been defeated in a vote in the U.S. House of Representatives.]
Stiglitz on Democracy Now! — The results of a three trillion dollar war financed by deficits
Stiglitz speaking in April, about Today
Slavoj Žižek has joined other radical cultural critics and political philosophers in training his sights on this bailout for predatory bankers, and thanks to Open Source Radio we have some of his latest thoughts. He says in his interview (see the audio file below):
Dangerous moments are coming. Dangerous moments are always also a chance to do something. But in such dangerous moments, you have to think, you have to try to understand. And today obviously all the predominant narratives – the old liberal-left welfare state narrative; the post-modern third-way left narrative; the neo-conservative narrative; and of course the old standard Marxist narrative – they don’t work. We don’t have a narrative. Where are we? Where are we going? What to do? You know, we have these stupid elementary questions: Is capitalism here to stay? Are there serious limits to capitalism? Can we imagine a popular mobilization outside democracy? How should we properly react to ecology? What does it mean, all the biogenetic stuff? How to deal with intellectual property today? Things are happening. We don’t have a proper approach. It’s not only that we don’t have the answers. We don’t even have the right question.
Less state spending is “bullshit,” Žižek argues, and Bush with his trillion dollar intervention in the market ought to be nominated an honorary member of the American Communist Party, he jokes. The conversational interview is hard not to listen to right to the end, animated, engaging, and thought provoking, without a hint of pretension.
And what’s this about “tent cities”? It seems that the world emperor has no clothes after all, and is begging in the street. This is your America, watch it crumble. Just a reminder from the Department of Homeland Security, your alert level is Orange, and your real threat is somewhere in western Pakistan.
Tent City 1
Tent City 2
Tent city in suburbs is cost of home crisis
Reuters, Thurs., Dec. 20, 2007
In hard times, tent cities rise across the country
Associated Press, Thurs., Sep. 18, 2008
Welcome to Tent City, USA!
“Well, thanks to the U.S. mortgage crisis you can now experience the thrill of camping out in the backyard every single night! But this time instead of your backyard it’ll be in a vacant lot. And instead of thrill the only thing you’ll experience is despair and your inevitable suicide…”
Bushvilles? Of Tent Cities and Golden Parachutes
“Today’s Contemporary Americana!
Would we call these “Bushvilles?” I suppose Kevin O’Brien and the rest of the capitalist bootstrap enthusiasts would object. Well, screw them. Hopefully.
I always like to compare and contrast because its fun and ironic in that post-modernistic sense. So compare and contrast the above BBC story to this snippet, also from Schechter’s story:
‘A week earlier, Bear Stearn’s former CEO bought a Manhattan condo for $28 million, no mortgage needed. In December, compromised Wall Streeters walked off with $31 billion in bonuses, just a billion below the record set a year earlier.’
So if they can walk away, why can’t the Skaggs?”