Tuesday, March 16, 2010

No More Bailouts

Americans have had enough of the nightmare of irresponsible big institutions getting bailed out by the US government using their tax dollars. The average citizen on Main Street should not pay for the risky and reckless behavior of corporate giants on Wall Street.

Bailout is the most unpopular word in the language today. In Texas, the Republican nomination for governor was decided when the heavy favorite, Kay Bailey Hutchinson, was derided as “Kay Bailout”, for her vote in the U.S. Senate.

Now, the Senate Democrats have proposed legislation to overhaul financial markets by establishing government scrutiny and regulation to almost any financial product, from payday loans to workers to derivative trades by investment bankers.

The bill's prospects are unclear. So far it has no Republican support and the lobbyists hired by financial interests are already on the attack. But their defense was destroyed when they took the bailout money to remain solvent. When they begged the US government to loan them trillions of dollars to save them from bankruptcy, they put themselves in the hands of the federal government obligated to make sure it never happens again.

Hence the absolute requirement for regulation of trading, for adequate capital, for consumer protection, for mortgage regulation, for transparent records, etc. When an institution needs a rescue to survive, it gives away part of its independence. If they are too big to fail because their failure will have negative consequences to the entire American and world economies, they must be restrained in conducting business in a manner that increases the risk of failure.

We all know that financial institutions and big business have enormous power in Washington. They will resist most serious reforms and effective regulation or at least try to weaken them. The battle will be a serious test of American democracy. If serious regulation does not establish controls over outright gambling with other people's money, over deceptive practices, over risk-taking for bonus payments, the nation will have capitulated to practices that could bring down the Republic.

We can't have anymore of this business of, heads I win, tails you lose. The national interest must be protected. No more gambling with depositors’ money with the assurance that the government will bail out the losses and a fat bonus will await the gambler if the house wins.

1 comment:

an average patriot said...

Jerome you know what stinks? Capitalism has been bailed out and as the average citizen anywhere in the world does not matter it will happen again if they need it and deal with the people militarily if they have to.

While the pundits in politics and they media continue to play and make money we will remain an inconsequential nuisance and once again the right solution will never be hit.

You keep hearing of some fallacy called a jobless recovery. That is code for the poor needy elderly uninsured and out of work will go south but our system will be saved and that is all that matters.

That is the way Republicans want it. If they go with this Deem process and pass this without a vote the sh@$ is going to hit the fan.

Down the road who knows when enough is enough, the 2nd revolution even a brother of mine is calling for will happen.

I really do not see a way out of it because there are two immobile sides with us right in the middle.

The only way to save the middle is to pass health care and if that happens the two sides are going to explode. We are at an impasse a junction wait watch and listen!

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