Some Republican governors, led by Mark Sanford of South Carolina, Haley Barbour of Mississippi, and Bobby Jindal of Louisiana (and Sarah Palin--remember her?--of Alaska) are objecting to the stimulus package because they say it will pass the costs on to future generations and "Social Security." At least that is what Sanford said on Sunday morning. I was astounded by his sudden concern for Social Security. I was also puzzled as to why he would think that Social Security was even threatened. He didn't elaborate, only asserted. Perhaps he still thinks that we should have privatized social security in 2005.What delight that would have created right about now.
I was also concerned when these governors said that what they were going to reject was assistance to their states for unemployment compensation. I guess they think that no one in their states is losing their job.In other words, screw the people who are really struggling, but accept the tax breaks for the better off. True Republican compassion and justice. Mostly, they just want tax cuts. They have drunken the kool-aid and cannot raise themselves from their intellectual sugar high. The sugar high has permanently mutated their civics genome.
Since the American taxpayer is going to pay for the bailout over time, it makes sense that those taxpayers who will receive most of the benefit from the bank bailout and the corporate tax breaks should also pay higher taxes and absorb most of the burden. They get their bank bailout money, then they pay a good chunk back in higher taxes. Not only let the tax cuts end in 2010, but increase them even further for those making over $40,000 or maybe even $250,000. "Foul, no fair!" they would cry. "Why that would be destructive to the economy," they would object. How silly to pay us millions only to collect most of it back the way Roosevelt, that traitor to his class, did, or Eisenhower! Well sure. And the circularity would end up with the money in the government's coffers to offset buying up the "toxic assets" and for more stimulus and support for the unemployed and the homeless and the ordinary American.
So if you don't like the circularity of the bailout paying you only to be collected in higher taxes, Mr. Citibanks, then let's just stop it right now. Don't ask for the bailout, return the money you've already received, take your lumps, watch the FDIC come in and take over your insolvent bank, fire your sorry asses along with the members of your board, keep the decent employees on the payroll, break you up until you are no longer too big to fail, and look for new buyers for the fragments.
There's plenty of people out there who will buy your assets for the chance to make their money in the banking business. Only this time the banking will be sensible and local (or at most regional) and responsive to the people in your community. You know, Frank Capra, Jimmy Stewart, avuncular angels descending to keep the jobless from committing suicide.
The healthiest banks in the world right now, it turns out, are in Lebanon, of all places. Lebanon which once again had the crap knocked out of it in 2006 by their neighbors to the South. Why? Well, it seems the head of the Lebanese banking authority forbade Lebanese banks to buy the mortgage backed securities and other speculative instruments, let the insolvent banks go under, and required that banks not lend out more than 70% of deposits. People all over the Middle East are sending their money to Lebanon because of the stability. There's regulatory sanity for you.
Additionally the Glass-Steagall Act should be returned so that investment banks cannot mingle with commercial banks. Regulation of securities should be tightened, and full accounting for the use of the bailout money should be determined. Congress could also re-introduce the legislation that Charles Schumer managed to quash that allowed hedge-fund managers not to pay income tax, only capital gains taxes on their ill-gotten gains. While we're at it, the people of New York could recall Schumer, one of the unsung villains of the massive transfers of wealth.
Though the consensus is rising from every economist outside of the government that the insolvent banks should be placed into receivership just like Indy Mac, the consensus within the White House and on Wall Street, unfortunately, is that the Banks should be left alone to carry out their predictable shenanigans. Let's just not use the word "nationalize" shall we? Let's use the proper word, "receivership," and let the bank examiners take them over and clean them up in preparation for a sale to bankers, not marketing and sales idiots.
For my money, you can also stick it to the Wall Street traders on the floor who won't be affected by the executive caps on salary. Let them start paying more taxes on their commissions in order to lighten the burden on the 90% of the people (and their offspring) who will bear the brunt of the bailout. Let them pay transaction fees on their longs and shorts and jumps in and out of the market.
Whenever Republicans complain about taxes, they always threaten that business and talent will leave the states, like in California for the past few weeks. Perhaps we should encourage the giant bankers and even other Republicans to start thinking about leaving the country. It's time we let the plutocrats flee the US if they don't like the tax burden, especially since that burden is increasing because of the handouts they demand. Let's take over the slogans. America: support it or leave it. Let the plutocrats defect and live off their massive accumulated transfers and tax-avoidance bankrolls sitting in their Swiss Bank until they perish from the face of the earth. Deep down in the muck that has been identified in the UBS scandal is the spoor of Phil Gramm, one of the first at the trough when the bailout money was dished out by Hank Paulson, villains both in the deregulation of the derivative roulette.
Because there are plenty of people who can take their place for lesser pay, and probably run the banks as well as or better than the fools who have brought us to this mess. It would be the inexpensive way to do it, and it would be wonderful dramatic irony: the same kind of screwing that they have been pulling on their employees for decades, fire the older help and hire the neophytes.
We could call it "ethical cleansing."