SHOCK AND AWE: DROWNING IN A BAILOUT

“Only a crisis, actual or perceived produces real change.” – Milton Friedman, Father of the Free Market Economic Shock Doctrine

"I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."
Grover Norquist, former Evangelical Liaison to the President, founder of The Americans for Tax Reform
ClaimDemocracy Panel, November 2007

That’s what it feels like right now for Americans, like you’ve been punched in the face, kneed in the stomach, and hit on the back of the head, and now you’re kind of awake, bleeding, and you feel someone pulling you across the cold hard floor to the bathtub…and bad for all of us—the water is running. As you’re pulled along you find yourself staring into space, tears running, in disbelief about what’s going on, what's about to happen, and almost numb, but definitely terrified….you’re in shock. Hopefully we’ll wake up a few people to become resilient in what’s happening while we're in shock and what we can do about it.

Yesterday on MSNBC, the Rachel Maddow Show outlined the eight-year disaster that is Bush policy, largely guided by the economics of Milton Friedman: move from de-regulation, wait for a real or perceived shock crisis that will paralyze the people and then enact pre-prepared policy privatization or additional shocks. Those disasters are September 11, the Iraq War, Hurricane Katrina, and now the economic crisis.



We half-watched in shock after September 11 as Bush rushed for massive privatization of contracts through Homeland Security for military functions, surveillance, and the Patriot Act dismantling of basic Constitutional rights. Then we saw $8 billion in cash disappear into the Shock and Awe Iraq Occupation hole; private contracts to Blackwater for security, the building of the Green Zone by Halliburton, and the take-over of 70% of Iraq’s oil--not to pay back taxpayers--but to fill the pockets of Multinational Big Oil Companies. Again, on our own land, we saw the prep work for Katrina; bleeding money away from fixing the levies, privatization of 95% of the schools, stealing away public low-income housing, and privatization of the police force during the crisis—again, Blackwater. In every case they’ve engaged in de-regulation, wait for a real or perceived shock crisis that will paralyze the people and then enact pre-prepared policy privatization or additional shocks.

Based on the above, can you predict what this economic bailout for the banks is going to look like? What are they operationally doing right now in this policy rush to save us from economic crisis?

While you’re in shock, Paulson, Bernanke and Bush are actually in a panic to gut out the government to its fullest extent before Bush leaves office, through their financial bail-out proposal. You will have to read on your own in Naomi Kline’s Shock Doctrine how they--and by “they” I mean neo-conservatives, the World Bank, the International Monetary Fund--screwed over South Africa by tying up the country in so many geo-political economic rules and agreements that the country was bankrupted, their Constitution nullified, leaving the new social democracy with no real power. They have never truly recovered from the corporate takeover of the corporate ruling class.

This is what Bernanke and Bush have in mind for us. That, in Section 1 (a) of the proposed legislation purchases and handouts are “…terms and conditions as determined by the Secretary..,” giving the Secretary unilateral powers over this $700 Billion taxpayer handout. Make no mistake this action will NOT “socialize” these banks, because the “Federal” Treasury is not an arm of the Federal Government, but owned by several “independent” banks. So in essence, from Regan to Bush II, the neo-cons have been de-regulating the banks, among many things, and making a KILLING off of Americans, making them wealthy beyond measure. In squeezing every cent out of these de-regulatory loopholes, they’re now going to get their second round of pay. These banks that act “independent within the government" will seize YOUR $700 Billion in cash borrowed from CHINA, leaving us YOU with the tab. This will all happen with no government or legal oversight.

What will be left for the next president to fix any of our infrastructure mess? Healthcare? Schools? Social programs for Americans? I’ll tell you what they’ll do, because Friedman’s recommendations are always the same. Now that there is this huge debt, you have to gut out any “unnecessary” programs, like Social Security and all its related programs at the state level. Do you feel your face just hovering above the bath water now? See, government is not bad, but it’s only as good as the people running it. If you hate government, then the government is going to suck, but it’s nothing compared to corporations taking over your physical and emotional trauma-crisis management for a profit. I can just hear their lustful breathing for power and control over Americans. This is why they’re in such a rush to pass this legislation because they have to guarantee a broken government and future profits off of crisis. We’re going to make money off of this deal like Iraqi oil is paying for the war. Now, be good consumers or they’re going to shut off your Real ID Chip.

In the NYT story Democrats Set Terms as Bailout Debate Begins, “Some lawmakers also said they did not want to be rushed into approving extraordinary new powers for the Treasury secretary and the government without full consideration of the consequences.” 

Bush highlighted the problem regarding the economy on September 21st, unwittingly, by saying, "And, you know, I know a lot of people here in Washington saying, Mr. President, saying, well, who to blame? Now is not the time to play the blame game. There's plenty of time to analyze the situation. But from our perspective, it's time to solve the problem, and that's what we did." 

This is the repetition of words that happened in the aftermath of Katrina and now, again, Bush is expecting you to buy into the belief that you can solve a problem without knowing what the source of the problem is!  You’re still staring into the bathtub with a hand on the back of your head and your hands tied behind your back and he’s saying, it doesn’t matter how you got here, just let us dip your head into the water and it will all be okay.  If you can get your hands free will you prevent this from happing again? Will you put the guys in jail that perpetrated the shock in the first place or at least make them pay? In many American minds, we often buy the bitter pill that says now is the time for rapid response, rather than critical thinking and prevention.

The NYT article continues by saying, “Financial companies were already lobbying to broaden the plan. And the Bush administration did indeed widen the scope by allowing the government to buy out assets other than mortgage-related securities as well as making foreign companies eligible for government assistance.” After years of lip service to their base about “illegals” accessing government programs, they’re now going to bail out “foreign” corporations. This is the pinnacle of anti-social behavior, to value a money machine for the wealth of others against the welfare of actual human beings.

As in the aftermath of Katrina when government assistance was deregulated and downsized so as to limit assistance for our most vulnerable private citizens, so it should be for the banks. To this day thousands, if not millions of our citizens still have no access to all the public land that was privatized, or schools that were privatized, teacher salaries cut and contracts handed to big corporations for elite neighborhoods and nonexistent for “red-zones” who can’t pay.   So it was up to us to help our own.  Private citizens stepped in the gap to send millions of dollars to our fellow citizens and opened our homes to our American "refugees."  This should be the fate of the banks, turning to their own.

The people who caused this economic problem or profited most from deregulation should pay for this bailout, as recommended by Senator Bernie Sanders (we’ll get to at the end), since millionaires and billionaires fought from the Regan years until now for de-regulation of the financial sector. The conservative wealthy are not for "big-government" and welfare for irresponsible individuals, so why should government (We the people…) be there for irresponsible corporations, who engaged in predatory lending for a profit, to vulnerable citizens, uneducated in the deals they were making?  

Now, my understanding is that corporations have all the rights and responsibilities of individuals by law and so they should go to their own just as Americans have been forced to do. Wouldn’t it be great if the wealthy would dodge economic hypocrisy, do the moral and ethical things by going to their own, all the other corporations and billionaires and say, We need you to donate to help us recover from this economic crisis.  I don't believe that the US taxpayer should pay for a system that fought so hard for a hands-off government, made huge profits at the top, and then lobbied to use enhanced interrogation techniques, even water-boarding, to terrify us into giving more of our land, our privacy, our money, our lives for their greed.  This is the power they want, all banks owned by one or two banks, with no oversight, or ability for citizens to negotiate.

Have you made your voice heard to your legislators?  I agree with and am pushing for Senator Bernie Sanders proposal for the bailout, as outlined in his September 19th article on the Huffington Post:

Specifically, to pay for the bailout, which is estimated to cost up to $1 trillion, the government should:

a) Impose a five-year, 10 percent surtax on income over $1 million a year for couples and over $500,000 for single taxpayers. That would raise more than $300 billion in revenue;

b) Ensure that assets purchased from banks are realistically discounted so companies are not rewarded for their risky behavior and taxpayers can recover the amount they paid for them; and

c) Require that taxpayers receive equity stakes in the bailed-out companies so that the assumption of risk is rewarded when companies' stock goes up.

(2) There must be a major economic recovery package which puts Americans to work at decent wages. Among many other areas, we can create millions of jobs rebuilding our crumbling infrastructure and moving our country from fossil fuels to energy efficiency and sustainable energy. Further, we must protect working families from the difficult times they are experiencing. We must ensure that every child has health insurance and that every American has access to quality health and dental care, that families can send their children to college, that seniors are not allowed to go without heat in the winter, and that no American goes to bed hungry.

(3) Legislation must be passed which undoes the damage caused by excessive de-regulation. That means reinstalling the regulatory firewalls that were ripped down in 1999. That means re-regulating the energy markets so that we never again see the rampant speculation in oil that helped drive up prices. That means regulating or abolishing various financial instruments that have created the enormous shadow banking system that is at the heart of the collapse of AIG and the financial services meltdown.

(4) We must end the danger posed by companies that are "too big too fail," that is, companies whose failure would cause systemic harm to the U.S. economy. If a company is too big to fail, it is too big to exist. We need to determine which companies fall in this category and then break them up. Right now, for example, the Bank of America, the nation's largest depository institution, has absorbed Countrywide, the nation's largest mortgage lender, and Merrill Lynch, the nation's largest brokerage house. We should not be trying to solve the current financial crisis by creating even larger, more powerful institutions. Their failure could cause even more harm to the entire economy.