The Great American Swindle

Our goal is to shrink government to the size where we can drown it in a bathtub.

- Grover Norquist ('Field Marshal' of the Bush Plan)

Has the government drowned yet? (Can we finally shut off the water?)

Good piece from The Nation, by William Grieder:

Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion." If this deal succeeds, I predict it will become a transforming event in American politics--exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.

Actually... if they're brought down, perhaps we can start over. Its probably time to let these two bloated, corrupt parties crash with their buddies in the bloated, corrupt financial market. They all sleep in the same bed. The Republicans are now Neocons; the Democrats... Neocon collaborators. Any semblance of their former party platforms has long ago vanished.

While the growing ranks of angry Independents watch both parties hang themselves with their own neckties (you can make that a purse strap for Palin,) Greider talks about what our government could be doing... if it wasn't in bed with Wall Street lobbyists:

Let me be clear. The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

Since both parties serve their campaign financiers - corporate and banking lobbyists - of course nothing substantial will be done... other than dumping the entire thing on the backs of the already-struggling taxpayer.

The tub is overflowing. Can we turn off the water now?