Why I'm Celebrating the Defeat of the Wall Street Bailout Today
A financial crisis always hurts poor people and people like me who have a negative net worth (why can't Congress bail me out and pay my student loans?) more than it hurts the ruling class. And there may be that rare elitist or anarchist who wants to see the economy come crashing down because they either don't really have as much to lose or they see it as an opportunity. But that's not me. I'm celebrating because the bill represented the worst of big-money's influence over our democracy: A weak Republican President and a Treasury Secretary who has largely benefited from the schemes that are now bringing down our economy were pressuring Congress and the American people to give them hundreds of billions of dollars - some coming directly out of my indebted pockets - so that a few banks wouldn't go under.
So if the banks go under won't we all suffer? Possibly. However, there was no guarantee that we wouldn't have suffered under the bailout - in fact some economists believed we might suffer even more. AND we can and should still demand that Congress does inject some money into the economy. That money should just go directly to the people who need it - tenants who can't afford to pay rising rents; professionals who are still paying off student loans despite having decent-paying jobs; people who are having trouble paying off their mortgages; the people who lost homes in recent hurricanes; veterans who can't pay their medical bills; and on and on. All of these problems wouldn't disappear if the bailout bill was passed, and they might be exacerbated since tax dollars that could have provided relief might disappear as we discover that the investments that we are bailing out are worth almost nothing and $700 billion disappears into thin air (and perhaps a few of the fattest bank accounts).
I'm also celebrating because of the role in all of this played by some of the worst Democrats. As a progressive I certainly side with the Democrats more than Republicans, but critical moments like this remind me that almost all of them (the one's in Washington not the rank and file folks like my grandmother) are part of the same awful political system benefiting from the worst policies and practices in our system. Nancy Pelosi, Harry Reid and Barney Frank were cheerleading and fearmongering more than any Republicans, outside of perhaps the White House. Their loss today is a setback to some of the most undemocratic Democrats; and they deserve it.
It was troubling to see the stock market fall over 700 points, but the economy is based on material circumstances on the ground. Either we have resources that will make our economy strong or we do not. They aren't pulled out of thin air on a broker's computer. It was no surprise that the market would plummet - it is dominated by the same forces who wanted this bill to pass. Sure a lot of Americans have small amounts in the market - in 401k's mostly - but most of the stocks on Wall Street are owned by a minority of Americans - the very rich who were more likely to benefit if the bill had passed.
With hundreds of billions of dollars at its disposal for investment bank bailouts and pointless wars, the federal government doesn't have to allow a crisis at the top to affect most Americans. But without demands from most of us, Congress still will pass some bad legislation that will probably result in a short-term Wall Street rally but ultimately do very little good for you or me.