The Bush administration’s proposal to bail out some of Wall Street’s biggest players with an unprecedented transfer of public wealth to the private sector sent shock-waves throughout the nation.
Already deep in deficit, the administration wants to borrow $700 billion dollars — in addition to the $900 billion already spent this year to prop up troubled lending institutions and deal with the fall-out from the housing crisis — and entrust it to Treasury Secretary Henry Paulson, fresh from a long run on Wall Street himself. He’d then buy up worthless paper from struggling banks.
Who would get the money? Nobody knows. Paulson says he wants to hire Wall Street firms to oversee the process.
Under Bush’s plan, the taxpayer would get little, if anything, in return. The whole thing would happen without Congressional oversight, save for a semi-annual report on the process, and Paulson’s actions would be beyond challenge in the courts.
It is an economic coup d’etat in the making. And people are talking about little else. Here’s 10 things that have been on our radars …
1. Shock Doctrine: Profiting from Crisis
Robert Borosage of Campaign for America ‘s Future invokes Naomi Klein’s “Shock Doctrine in asking whether we’re going to “get fleeced in this crisis” …
Call it extortion. Every American is told to ante up $2,000–an estimated $700 billion in all–to bail out the banks from their bad bets, or they’ll bring down the entire economy.
In a speculative frenzy that allowed the Masters of the Universe to pocket millions personally, the banks filled their coffers with toxic paper that no one wants to buy. Now they sensibly don’t want to lend money to each other, since no one knows if the other is solvent. So they go on strike, and threaten to trigger a global depression, if they don’t get rescued.