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Taking the short end of someone else’s risk

by Brian Clarey

So it’s to be a bailout on a massive scale, the biggest Band-Aid ever created to hold together the deepest wound our economy has suffered since 1929. And we have ourselves to blame. How much money are we talking about here? About $700 billion? No, wait… almost $850 billion? Maybe more? Really? Really. Like many Americans who pay their mortgages, live in at least the same neighborhood as their means and have made sacrifices to keep sandwiches in the lunchboxes, I am bent right in half about this government bailout of the banking industry. What the hell did I do to deserve such a rapacious savaging of our national coffers, a teeny-tiny portion of which came from me and mine? When the credit was easy, I picked up a house — just one — with no money down. I took the loan out for the foreclosure value of the house, reinforced my employment situation, made the payments even when it meant making some hard choices. I’ve been hounded mercilessly by student-loan servicers, financially sodomized by creditcard companies, nickel-and-dimed by my bank, swiped at by late fees and hidden charges. And still I keep going. How about a life preserver for guys like me? The argument is that the financial institutions on Wall Street are too big to fail, that to allow the rot to fester is tantamount to sabotaging the entire world economy. And though I have always been a proponent of the free market, I can see the logic there. To a certain degree, the machinations on Wall Street — which is just a euphemism for the global corporate world, hardly contained to a few blocks in lower Manhattan — do support the global economy, and certainly act as a pillar for our domestic platform. But we cannot downplay the importance of a functioning middle class — and the working poor — in our figuring. The people who cash their paychecks, pay their bills, buy groceries and gas and actively build the next generation of consumers cannot be overlooked in the grand scheme of things. And there are stark inequities here. True, Main Street cannot function properly without Wall Street activity, but Wall Street seems to do just fine even when Main Street’s denizens are down and out. They say Wall Street’s workings are based on confidence — confidence in lenders to have access to shortand long-term cash, confidence in borrowers to make good on their debts. But what of the confidence we mortgage-humpers feel towards the economy they’ve built, one based on financial aerodynamics instead of production, imaginary dollars instead of greenbacks? The confidence we feel towards our government has likewise been compromised. Enron showed us that skilled accountants can make a sinking ship look like a pleasure cruise. The lead-up to the war in Iraq has proven, once again, that elected officials are capable of duplicity. Hurricane Katrina revealed a degree of governmental ineptitude. NAFTA and its ensuing mass outsourcing of US jobs implied that the government may not have the best interests of the American people at heart. Unscrupulous lenders verified the existence of unchecked greed. Voracious borrowers lent credence to PT Barnum’s maxim. We’ve been burned before.

And yet we are supposed to take it on faith that this bailout package — which I refuse to refer to as a “rescue” — is a good and necessary thing. Which it may very well be. So the banks and brokers get their billions, enough to catch all the rest of us up on our mortgages, provide us with health care and send all our kids to college. And there’s no guarantee they won’t waste it or steal it; there’s no guarantee it won’t disappear in the fluctuations of the markets. They take their Band-Aid, but they should know that the regular schmucks will be watching. The citizens of my corner of the world want to see more than just a massive payout. We want to see regulations. We want to see accountability. We want to see indictments where warranted, help where it is needed and, just this once, some economic justice in a world where greed and risk have had no down side. We know the holidays are coming. And if million-dollar bonuses are being doled out by “beleaguered” Wall Street firms come December while the rest of us are trying to finagle some semblance of Christmas for our kids… well, we’re going to know about it. And we’re not going to like it. The fear now is of what might happen to our economy if we don’t bail out our lending institutions. The fear later becomes intermingled with anger, disenfranchisement and righteous indignation. And like with this bailout, we won’t know what happens next.

To comment on this story, e-mail Brian Clarey at editor@yesweekly.com.

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