Socking Taxpayers Is Not Populism : A Real S&L; Bailout Would Put Cost on Greedy High-Rollers
What in the holy name of that 19th-Century Populist “Sockless Jerry” Simpson is going on? A bare majority of the House attaches four or five mild palliatives to the most regressive, expensive piece of corporate-welfare legislation ever, and suddenly members of Congress and the press are reporting that there’s “a strong Populist wind sweeping across the House.”
Populist? Let’s check that wind gauge again. The object of this huffing and puffing is the Bush Administration bill to give multiboodles of our money to the flock of buzzards circling the savings and loan industry. Great ghost of Wright Patman! Even a hundred amendments couldn’t put a Populist sheen on this act of official larceny, which would lift more than $200 billion out of the ordinary taxpayers’ pockets and drop it in the undeserving hands of wealthy financiers.
You might scoff at a Texan complaining about how the S&L; bailout is being handled, since a large percentage of failed thrifts are in my state. But less than 1% of Texans own an S&L;, and even fewer were part of the mismanagement and fraud that took place in the past decade. The typical Texan is being gouged just as much as the rest of the nation’s taxpayers.
The gut Populist issue in the bailout bill is who pays for it--the few who profited from the unsupervised financial frolic that caused the crashes or the many who had no hand in this funny business and got nothing?
Yet this fundamental question goes begging for attention from national lawmakers and scribes. There have been lengthy discussions and tedious coverage (mostly on the business pages) of such details as whether thrifts must maintain capital cushions of 1.5% or 3% of assets. But where are the speeches and lead stories trumpeting the outrageous fact that the Bush bill, supported by congressional leaders of both parties, puts the bulk of this rich man’s bailout on the backs of workaday people who cannot even get loans at the institutions they are being forced to save?
Your personal share? $1,000. Your spouse, each kid, your old Aunt Eula and every American will have to fork over $1,000 of their tax money, too. Never in U.S. history has a single federal expenditure taken such a big bite from the people without even having a public debate about it.
Washington must be hoping that people outside the Beltway won’t fathom this rip-off, or that folks will be intimidated or bored by all the financial mumbo jumbo. Maybe. But it’s more likely that the truth will sink in quicker than you think, and it will deepen their cynicism about who gets what from government leaders.
How often have the President and Congress told us that there’s no money to do what we need? Affordable housing: “We don’t have $20 billion.” A national health program: “Get outta here.” More cops on the beat to deter crime: “Ask your local government.” Educational excellence: The “Education President” said that there’s only $444 million for this. Repair America’s highways and unsafe bridges: “Later.” Entrepreneurial capital for small business and cooperatives: “Not the government’s role.” But bail out S&L; chieftains? “Here’s $200 billion. Y’all come back if you need more, you hear?”
The House did pass a few important and progressive amendments, such as a proposal by Rep. Joe Kennedy (D-Mass.) calling for public disclosure when lenders “redline” minorities and others from obtaining loans. They are sensible alterations that the House-Senate conference committee should retain when it works over the bill. But they add up to so little quo for so much quid --and they certainly don’t spell Populism.
If Congress really wants a Populist label for restructuring the home-loan industry, it should heed the Financial Democracy Campaign, a nonpartisan citizens’ coalition with the gumption to suggest specific proposals to put the bailout costs squarely on those high-rollers who pushed for and profited from the folly of S&L; deregulation. The campaign also calls for a tiny assessment on the overall assets of each financial firm to capitalize a $50-billion Home Opportunities Fund, to make loans to people who need housing.
Measures like this are the true grit of Populism. If Congress--or at least the Democrats--were to embrace such unabashedly democratic approaches, then everyday Americans might embrace them. Instead, there is a bipartisan rush to put this bailout on our tab before we notice.
There still is time to call their hand, but not much. The conference committee, our last chance, begins its work on Tuesday. These members should be called on to fight for what is fair, to make this nation’s mega-wealthy pay for their own greed-gone-bad.
To us outsiders, this bailout looks like another kick by the powerful, putting an enormous debt on this generation and beyond. It saps our country’s economic vitality. It centralizes control over capital in fewer hands, further removed from our communities. Perhaps most damaging of all, it confirms our cynicism about the fairness of our political system. Washington must do better.