There are few days were everything hangs in the balance, and where it is ordinary people who hold the scales. There are few days in the history of the Republic which are as important as today. Either it will be seen as a turning point, or it will be seen as the inflection point ever downwards in a spiral. Today it is not moghuls of finance, generals, or distant elites who decide our fate, but only us. We can look back over two hundred years, and see a few, a very few, days which decided the fate of the nation. Many were on the field of battle, some few were elections. Today we fight a war, not with force, but the force of our convictions, we fight a battle, where the wings of victory, are our own words.
We must say no. And we must tell the people who work for us. This bill is not nothing else than the meaning of America itself. We have a choice of two Americas, one where enabling acts are rammed through under the cover of darkness and obscurity, with and in the shadow of fear, the other where there is, yet, some slim hope for our Democracy. The waves of the people's revolution must overwhelm the dike and dams of privilege on this day, or there will be no tomorrow.
Why this day? Because this bill, and an bill so conceived in fear and hysteria, will bring forth a life of misery. Were it to be passed, it would join the odious acts, the AUMF, the Military Commissions Act, and the PAA among them, that signaled to ourselves and the world that the American experiment, has ended. It would be the capstone that would seal all the rest.
Why this act? Lend me your eyes and I will tell you.
The Economics of Fear
This act reeks of fear, but its excuse is that it will save us from a financial mushroom cloud. Yet, when looked at, the evidence for this assertion evaporates. It is claimed that the crisis is here now, because banks are not lending to each other. Instead, the problem is that the Federal Reserve has lost control of its own mandate to protect the currency. It is not that banks are cowering in terror at doing business with each other, they own each other's stock, they engage in balance transfers, they continue to sign contracts, accept deposits. If there were truly a general fear, we would see a pervasive collapse in credit. We do not. Instead what we see is bankers demanding higher returns on their overnight loans. This does not mean they deserve these returns, merely that the problem is that on one hand we have not controlled inflation, and on the other we demand that there be no recession.
Benjamin Bernanke has surpassed even Arnold Burns as a paragon of incompetence.
What has happened is that America went to war, and engaged in an orgy of consumption at the same time, joining states like France in the last days of it's Old Regime in demanding both guns, and butter. During the war, it was unthinkable not to lend, because a catastrophe in Iraq, would be a catastrophe for the world. America has made this mistake before, and the result was the economic crisis of the 1970's, a series of escalating recessions, each of which was more costly than before.
Since it is not bankers in fear, but bankers in the grip of greed, the solution is not to try and bribe them to continue to loan money. Since the problem is that America borrowed and squandered foolishly, the solution is not for America to borrow and squander even more. Fiscal, monetary, and social insanity brought us to this point, insanity will not get us out. The reality is that America is now headed for the recession that elites have flailed and thrashed and sought to avoid. It is time to pay the piper. Instead of bailing out billionaires, the urgent need is to catch the ordinary people who would otherwise slice through the net at the bottom of society, and never recover.
This bill meets fear with fear, and compounds greed with greed. It leaves in place those who created the crisis, profited from profligacy, and have hoped to forge the chains of slavery to debt around our necks. Their hope, as is the hope of every generation of aristocrats, is to force the living to be slaves to the dead. Never have so few, stolen so much, from so many, for so little return.
On it's face, this bill should perish. But it goes farther than that.
A Constitution of Corruption
With each shock, with each moment of peril, the elites have demanded, and received from cowering Congresses whose names will be carved in ignominy, new and more excessive grants of power. With each such grant, they proceeded to act, not in the public interest, but in self interest, not in the common good, but as common criminals. This act is not the first, nor, if it is passed, will it be the last. But it may be the last which we can prevent.
Paulson's plan was not conceived in a few hours, but planned and prepared for months, and only launched upon the public at a moment of perceived panic. The executive hid it in its dark recesses, waiting for a moment to launch it upon us. This alone should be enough for a legislature with any scrap of republican spirit, or democratic pride, or American honor, to reject it out of hand and demand that it be worked a new, from wholly different principles.
In the vast complex web of words we find the core and seed of the very same plan that was fired in dead of night from a White House besieged, occupied by an executive whose delusions of grandeur have crumbled around him. With all of the provisions, caveats, conditions, and cleavages, we find that there is no effective restraint on the unfettered power of the executive. No party, no President, no cabinet should wield such effectively unlimited authority, even in time of war. The oversight cannot restrain the spending, nor overturn the contracts, nor remove the individual who wields them, save by impeachment alone.
No bill has ever packed less restraint into more pages than this one.
Endlessly a complacent and compliant press has told us that what we, the people, purchase today, with the full faith and credit of the United States, "might be worth much more." But if it were so, then some one would buy it. And the truth is that this assertion is predicated on the belief that this bill will rocket America back to immediate prosperity, Almost no reliable and independent observer thinks that that is so.
What accountability is it for the Treasury Secretary to report to a board, on which he himself sits? It is an insult to the intelligence of a fly. What restraint is it for the President to spend, and then defy the Congress to claw back money that has fled round the globe? If we could trust the financiers to abide by the rules we have made, we would not, by their own admission, be here.
Legislation without Representation
Far from being a process where interest is pitted against interest, this bill is that species which was known to be fatal to the Republic from its inception. Madison warned that the death of the Republic would be a minority voting itself a subsidy from the majority. This bill is exactly that. It's profits and protections go largely to holders of bonds overseas, princes both private and public, royalty of foreign kingdoms, holders of debt contracted without public knowledge or assent. It's costs fall entirely on us.
For our Democracy to function, we must have the ancient checks and balances. This process has had none. Who has argued against? For our Democracy to survive, there must be accountability. This bill provides none, as it is being rammed through without public discussion or debate.
Who has spoken for the people? With all the cameras and conferences, we have not had a voice. Locked out from a Byzantine process, we have been told to wait while others decide our fate. A curtain of night and fog surrounded the negotiations, with repeated declarations that deal was reached, taking for granted in the absolute the people's assent.
What we have is not a compromise, but legislation that is compromised in the very means of its inception and elaboration. We are being told to create a potentate of the Treasury who will be, in effect, the Prime Minister for a Monarch in the White House, with a Congress that is expected to do no more than count out the years of our lives being turned over to others.
If this act passes, why would any executive ever expose their plans to the risks of election again. Instead, we will have government with years of inaction to create catastrophe, and then demands in dead of night for another drink of autocracy.
These repeated announcements of a deal are, in themselves, a corruption of the process. Each announcement has been an attempt to deceive the public into believing that the votes were there, and resistance was futile.
And it is not that the public has not noticed. By mounting majorities, the public has come to loathe this plan. When it was introduced a small majority seemed willing to give their assent, now, the bill is as unpopular as the Office of the President that gave it birth, and the Congress that is ready to pass it. A bare fifth of the public approves of any plan based on Paulson's. One could find more supporters for abolishing the Federal Reserve, overturning the Civil Rights Act, or making Broccoli the national vegetable. More people believe in witchcraft, than believe in this bill.
A leadership, lockstep and encased in a bubble, is trying to whip and deceive the public. It is possible to fool some of the people some of the time, but this requires that all of the people become fools for all time.
Already legislators locked in honest elections, those few were the outcome is in doubt, have fled for cover. Is there any more clear indication of the public sentiment, than that those who know that the people have a choice, will choose to vote against it?
It is at an end
For these reasons, that it is bad in premise, bad in principle, bad in policy, and bad in politics, this act is odious. But since it is at the crest of a tide of abuses and indiscretions, it represents either the last act of a people who could not sell their freedoms cheaply enough, or, by it's rejection, the first of a new era. If the powerful know that they can obtain any license merely by compounding failure upon failure, and then be unaccountable for the results, then we will have more failure.
Today is the test. If our expression means anything at all, this bill will fail. If there is a representative with the courage to declare that the emperor has no clothes, then this bill can be stopped. It might seem that this bill is a vast conflaguration, which burns without control, and that one small word cannot do more than be steam in the smoke. But it its of such small acts, added one upon the other, that all battles are made of.
This is your Democracy America, and if you are not here, now, in this moment, on this day, then what follows are an endless train of days, each one to be lived in the regret of having not stood here now. The choice is simple to war without end, and power without limit, we will add debt without accountability. It will be a burden too much, too heavy, too far.
We are told there are no alternatives, but this simply is not so. We are told there is no political support for the alternatives, but if a 27% President and a 17% Congress can pass a bill with 22% support for a bottomless well, then anything can be passed.
If we do not turn this back now, we will leave any hope of compromise and conversation, any hope of debate, and will turn instead to darker means which will destabilize the very foundations of our society. Strikes, and even violence, will grow over the coming months, as people are told that the people must pay in full, the debts that the powerful have washed clean.
We must say no. We must say no as often and as ardently as we can, as forcefully as our individual voices allow, until there is a great and mighty chorus to demand that this bill be sent back to the oblivion it came from, and a new act, crafted on better principles by better means, be formed on hope and not hysteria, on principles, not panic, and on truth, and not terror.
There is a crisis, but the sounds we hear are not falling bombs. We are not yet faced with financial catastrophe, but this bill represents constitutional catastrophe. It is not an election, but a democratic revolution, which will set us free.
Since politics has defeated this bill, with a coalition of those facing re-election defeating a coalition of the safe seats, it is to politics that we must look to a solution. What is the political solution? Why was this bill wildly unpopular with the public?
It was that vast sums of money were promised, to the people who had caused the problem, without oversight or accountability, and without any sign how this would be paid for.
What do we need to do now? Like Jimmy Stewart, we just need to get the banking system through until January when a new bill can be written. That's all we need to do.
That means we need to Jump Back to Stability and Sanity.
Jump start lending by having the FDIC given wider an injection of money, backed by future FDIC insurance fees, to take over banks too insolvent to lend. This crisis has gotten worse because banks have been allowed to bleed for months. Have the treasury issue a large block of 1 month treasuries, and authorizing wider lending at rates below LIBOR, but above the Fed Funds rate. Basically if a bank is too sick to lend, then it is too sick to live.
Back the program by extending insurance coverage and costs to included all entities that deal in securitized debt. Wall Street, has to take out crash insurance.
Stabilize write down mortgages that are above market value, giving the government a lien of half of the profits of the sale of the property. Keep people in their homes.
Sanity close all of the loopholes now that allow the creation of more "toxic waste." The Treasury Secretary should be doing this, not being an economic Czar.
Then we come back in January and deal comprehensively with the problem, with a new President and a New Congress. No more compromising with the lamest of ducks. Think of it as foreclosure in place on the Bush White House.