There is both confusion and anger at the mass level across the political spectrum about the 700 billion "bailout" of Wall Street banking and brokerage houses which the Bush administration is trying to force through Congress right now. The administration is portraying this as either or, bailout or disaster trying to marginalize debate to create a fait accompli.
First there really is a far-reaching fiscal crisis and something has to be done quickly to contain it. But what Paulson and the Bush administration are in effect trying to do is to "socialize" the losses of major institutions of finance capital on the assumption that the benefits will then trickle down to the masses of people, who will not lose their jobs, homes, and pensions.
For the 700 billion (about a year and a half of the present military budget to put it in perspective) the working class in the administration plan gets nothing.
There will be no restructuring of credit which will help debt ridden families begin to pull themselves out of the economic quicksand that they are currently in. The "regulation" will probably make it harder for them to deal with their current debts. There are no suggestions by the administration or virtually anyone else on how to shift the burden of a bailout onto the deregulated financial institutions which are at the center of the crisis.
For example, the military budget, already representing nearly 1/2 of the worlds official military spending, could be cut in half (to about 250 billion) which would still make it the biggest military budget on earth. Half of the money could go to social investments in labor and the people, the other half to paying off the new debt.
When people are bankrupt or simply cannot pay the debts they have incurred, they are put on some repayment plan. There is understandable outrage through the society about the vast personal wealth which the high executives of these institutions have incurred. But no one yet is talking about repayment.
Just as Franklin Roosevelt proposed a salary limitation for executives during WWII in order to show sacrifice for the war effort, both compensation caps and payback plans for CE0's and CF0's whose wealth ranges from the tens of millions to the hundreds of millions can and should be enacted. Also, since the capitalist class loves regressive payroll taxes for social security and Medicare, a serious program of reregulation could establish an excess profits fund and attach it to FICA, in effect to make the capitalist capitalist class begin to pay directly a much bigger partof social security and allied programs,while reducing the payroll taxes on working people.
Such suggestions are in the U.S. context radical and of the left. But they are antidotes to policies that are radical and of the right, policies that the nation has long endured and which have produced the disaster that we face today.
They are the sort of questions that should be raised today, namely, how can we prevent a collapse that would produce a depression and also make the perpetrators of the crisis pay the great bulk of their own rescue. My suggestions are by no means the only ones or even the best
ones, but they are in the direction of what we should be discussing.
What is, as all labor negotiators always ask, the trade off for working people and the whole people for accepting this unprecedented bailout? At present there is no trade off except the usual trickle down promises. A reasonable position for all non big business sectors of the society to take should be;no trade off, no bailout, since as all labor negotiators know, the more desperate big capital's position becomes, the more concessions they are willing to make.