The Treasury Department's requested bailout of the beleaguered financial sector is an unabashed, and unannounced full-frontal attack in the class war. The American middle class taxpayer is being asked to bail out Wall Street. The upper class has already gotten a half trillion tax break from the Bush administration, so it's you and me who are going to pay for it. If we don't bail out the banks, they say, grandma's pension is going to disappear, and your neighbor's house is going to be foreclosed.
OK, so let's look at some of the players in this mess. Let's talk about Phil Gramm. Until July he was the chief economic advisor to the McCain campaign. Former senior senator from Texas, and now a vice chairman of UBS, the Swiss financial conglomerate (which has recently written down 9 billion in bad debts and laid off 25,000+ workers worldwide). He's been a special friend of the banking industry for years. He was one of five co-sponsors of the "Commodity Futures Modernization Act of 2000," which contained the "Enron Loophole" that allowed the whole Enron mess. His wife just happened to be a member of the board of directors at Enron at the time. Shady? Nawww. He was also key in passing the Gramm-Leach-Bliley Act which gutted regulations dating back to the post-Depression era, which prohibited the conglomeration of banks, insurance companies, and investment brokers. Guess who we're bailing out now? The same conglomerates which formed as a result of that deregulation-- Goldman Sachs, Lehman Brothers, AIG Insurance, UBS, Bank of America, JPMorgan Stanley-- all banks, brokerages, and insurers. Thanks, Phil.
Now Phil can't keep his mouth shut, and his statement in July that the people complaining about the economy are just a bunch of "whiners" upset enough people that John McCain fired him, though according to Wikipedia they're still close friends. But look at what our uncle Phil has accomplished-- there's no way to prosecute any of these conniving robber barons for putting their banking institutions (and grandma's hard-earned pension) in jeapordy, because Gramm and company repealed all the laws against that behavior. He (and McCain) are still crusading for less regulation in banking! And good, flag waving neoconservatives and ditto heads are all shaking their pin-shaped heads in agreement.
And then there's Mr. McCain. Do you happen to remember about 20 years ago, near the end of the Reagan presidency, when there was another paroxysm of greed which shook the financial markets to the core, and required a huge government bailout? It was called the S&L crisis at the time. It's what the Whitewater Investigation was looking into when Ken Starr found out president Clinton was getting head from Monica Lewinsky. Well, Starr was originally investigating shenannigans in some real estate ponzi scheme in which some thought perhaps Hillary was involved. That turned out to be a dead end (except the cigar and the blue dress and the blowjobs, that is). But there were a few villians identified in that greed-fest, errr... I mean scandal. There was one name onto which all of the excesses of the time were attached. Charles Keating, who spent 5+ years in Federal prison. Well, Keating was found to have been helped out (again, by the removal of or protection from regulations pertaining to what you could do with a Savings and Loan Association) by powerful friends. The best way to make illegal behavior legal, then as now, was to repeal the laws against it. That takes partners in high places, and after long and careful investigation, Congress's own ethics committee pointed out some "bad guys" right in their midst. Five of them. The "Keating Five" they were called. Guess who was on that list?
John McCain-- who was cleared of charges of actually breaking the law (the charge was he interfered with regulators trying to enforce the rules), but was roundly and publicly criticized for bad judgement-- was a member of the Keating five.
That debacle brought an end to Savings & Loan Association industry, and cost taxpayers near $150 billion. Our current crisis will almost surely bring an end to investment banking as we know it, and cost much, much more. But we've still got Phil Gramm, spouting on about how we can't get anything done with all the regulations in the way. And we've got John McCain, the republican presidential candidate, who still can't seem to find better company, even after all these years. And he still doesn't think anyone has done anything wrong.
God bless America.
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