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Whose Bailout Is This?

The Working Families Party urges Congress to help the middle class get through the current financial crisis

Across New York state, members of the Working Families Party have filed petitions with Congress calling on the body to resist pressure from the White House and the international financial community to unconditionally hand over $700 billion to bail out the nation’s ailing financial industry.

More than 10,000 members have launched petitions through the WFP to New York’s senators and the representatives in the House.

“This crisis is fundamentally fueled by people who were allowed to buy up these mortgages, cut them up into a thousand pieces, and repackage them and resell them as something that they weren’t,” said WFP spokesman Dan Levitan. “This was a new form of trade that Wall Street sort of invented in the last 10 years, and it really took off in the last five years. And they would say what they were selling was safe, and the government let them do it with a wink and a nod, and the bond raters let them do it with a wink and a nod.”

This, he added, was the direct result of the Bush administration letting Wall Street run wild. “This is a classic right-wing ideology that says what is good for Wall Street is good for America.”

Yet now, with the financial turmoil spreading far and wide, and talk of stagflation and depression looming, many pundits are commenting on the irony on Wall Street. The finance ideologues are casting off their beloved laissez-faire and running to Washington for a bailout—eagerly restructuring investment banks Goldman Sachs and Morgan Stanley into bank holding companies with much stricter regulatory oversight than they had in their former incarnations.

The WFP doesn’t want Congress to put up $700 billion under the terms that Treasury Secretary Henry Paulson originally proposed, especially given the widespread perception that the bailout would function as a subsidy to elite Wall Street executives and investors. And Levitan challenges the premise that the big financial firms are “too big to fail” because their collapse would have devastating effects on the U.S. and world economies.

“This bailout goes to benefit the same people who got us into this mess, right?” Levitan asked. “If we are going to do that, Congress should bail out middle-class families too. And there are a lot of proposals floating around about how to do this. But there is a serious question here: Why isn’t the middle-class too big to fail? Why is only Wall Street too big? When something bad happens to them, the state is there to step in. This crisis is hitting working families across the country.”

Representatives for the 20th and 21st Congressional Districts, Mike McNulty (D-Green Island) and Kirsten Gillibrand (D-Greenport), have both described the situation in Washington as fluid and volatile. They are waiting to see the results of the legislation that the House of Representatives produces, and said that they are committed to forcing the best possible outcome for the middle class.

But the pressure coming from the White House, economists and the international financial community is colossal. The WFP is hoping that the Democrats will follow through with some of the early movements toward broad reform, but the pressure to act could blind them to the actual dangers, said Levitan. “You got these mortgage-based assets. Nobody knows how badly they are going to do, ’cause nobody knows what they are worth. You can’t sell them ’cause you can’t price them. You can’t get rid of them ’cause you can’t sell them. Nobody has ever experienced something like this before.”

“Right now the Democrats are saying some of the right things,” he continued. “Our point is that they need to spine up and really commit to use this crisis to do something for middle-class families, too. Don’t back down. The problem with Democrats is not that they don’t know what is right. The problem is that they don’t actually follow through. And that’s always been the role of the Working Families Party—to be a pressure from the left when push comes to shove, and it is shoving right now.”

—Chet Hardin

chardin@metroland.net


What a Week

Oh, the Humanity!

In the face of the current state of the American health care system and the ongoing health care debate, Americans may have a hard time empathizing with the French, who are facing cuts to their national healthcare system. French President Nicolas Sarkozy has cut funding for half of the country’s 165 physiotherapists at the National Baths of Aix-Les-Bains. As a result, the physiotherapists have gone on strike. Sarkozy has begun to take on France’s state sector industries, which have regularly scared away attempted cuts by previous French leaders. In a recent speech, Sarkozy recently pointed out that there are 721 French diplomats in the former colony of Senegal, which only has a population of 12 million—while there are only 271 diplomats in India. “How is that normal?” Sarkozy asked.

Oil Zombies

Democratic Speaker of the House Nancy Pelosi had a run in with protestors who were holding McCain signs and chanting “Drill here! Drill Now!” during the Democratic National Convention this week. The speaker paused and then responded, “Right here?” “Can we drill your brains?” Pelosi went on to call the protestors “the handmaidens of big oil” and the “two-cents-in-ten-years crowd,” referring to the amount she thinks off-shore drilling will reduce the price of gas.

The Day the Swinging Died

Capitol Region pundits and reporters lost one of their favorite subjects this week. A Slingerlands psychiatrist put in the winning bid to buy the Union Street Bed and Breakfast in Schenectady, effectively ending the run of the swinger hangout that features a sex dungeon in its basement. Owner Bob Alexson has said that he was not driven out but has chosen to move on. Alexson clearly did not consider what area columnists and anchors would be left to write about with his sexy B&B out of the picture.

For the Dogs

A Seattle woman who registered her dog to vote—a protest against the lax oversight of voter registration—had fraud charges dropped against her this week. The judge dismissed the case, sighting that the woman had already paid over $200 in court costs. The woman did not try to hide the fact that her dog was registered, and she pointed out that the dog never actually voted.



Peace Now

Photo: Chet Hardin

The Rev. Willie Bacote of Troy’s Missing Link Men’s Ministry led a march Tuesday from his Lansingburgh home to the heart of North Central Troy. The small but devoted group of city residents hoped that their efforts will help curb the violence that is tearing at the fabric of the North Central community. The march concluded on Bond Street with a nighttime vigil at the spot where 25-year-old Dustin Smith was shot and killed earlier this year.





Loose Ends

-no loose ends this week-



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