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.
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