Banker Bailout = Welfare for the Wealthy

By now, I’m sure everyone has heard about the US plan to stick American taxpayers with the bill for bank bail-outs to the tune of $700 billion.  It’s hard to put that kind of money in perspective, so I’ve been trying to think of other things that have cost the US $700 billion.  As it turns out, it’s actually $100 billion more than the price tag for the entire Iraq war to date, according to zfacts.

Whether or not you agree with the morality of war, you can’t argue with the fact that the $600 billion America has spent on killing and torturing Muslims has actually bought something.  Soldiers’ wages have been paid, a variety of killing and maiming technologies have been developed, purchased and used up, a sprawling command centre covering 10 square kilometres of prime central Baghdad real estate has been built and fourteen permanent US military bases are under construction.  Meanwhile, in the private sector, billions of dollars worth of no-bid contracts have been handed to companies like Halliburton, who have subcontracted to subcontractors who subcontract to slave traders trafficking in undocumented foreigners who – when they are not being beheaded – are forced to do real work, resulting in measurable goods and services.  Even so, many argue that $600 billion is a shockingly exorbitant sum for a war that, according to Donald Rumsfeld, was supposed to cost about zero dollars, give or take.

Not so with the $700 billion banker bail-out.  Apart from occasional outbursts of confusion, The mainstream media seems pretty supportive, despite the fact this time the money will be used up practically overnight, will pay no-one and produce, purchase and build nothing.  To be charitable, I’ll assume the lack of popular criticism is due to the reverence-inducing incomprehensibility of global Keynesian economics, and not because newspaper editors are bootlicking sycophants to the preposterously rich.

The US government’s plan to borrow about 3/4ths of a trillion dollars to pay off about 3/4ths of a trillion dollars in bad debts is a great deal for bankers.  While the bank’s efforts to recover your bad debts are mainly limited to threatening letters and automated phone calls at supper time, the government’s bad debts are repaid by taxpayers who can have their assets seized by the state or be chucked in prison if they balk at the terms of repayment.  Paulson’s bail-out proposal would create a Shangri-La for financial sector profiteers:  It would socialise the risk and leave the profits private.

This is why this clause embedded in the banker bail-out bill should be troubling to the taxpayers who will be forced to foot the bill:

Sec. 8. Review. Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

How surprising!   A Republican political appointee ducking democratic oversight and accountability!  My guess is the bill will glide through with minimal interference from either side.  If there’s anything both political parties in the US seem to agree on, it’s the sacred right to unfettered, unregulated, undemocratic, unaccountable, irresponsible and unethical behavior on the part of the obscenely rich.

If the bill passes as is, Henry Paulson will have free rein to do whatever he sees fit with that $700 billion.  Following the footsteps of Gabriel Schwartz, he can leave it lying around in his hotel room to be lifted by a dodgy hooker.  Like Jack Abramoff, he can trade it for political favours.  He could send it in suitcases to Iraq to vanish like the $12 billion the Fed shipped over in 2003.  He can stick it in his pocket like Christopher Ward, ex-chairman of the Republican National Committee.

And there will be nothing you, your government, or your courts can do about it.

But don’t worry, because Americans still have recourse to prayer.  Republicans may not be accountable to democratic process or the rule of law, but even they are accountable to God – or at least they think they are.  So pray that, like the $600 billion your government has diverted from public services to pay for pointless foreign wars, the $700 billion over which Paulson will have unfettered control actually pays for something.  Pray this bail-out isn’t the final, desperate hand at the high-stakes poker table where mad-eyed gamblers start trying to recoup their losses by wagering the deed to houses they haven’t paid off.  I think Sarah Palin’s infamous prayer is appropriate:  “That’s what we have to make sure that we’re praying for, that there is a plan”.

(I suppose if you’re not religious, you could always riot.  Or write to your congressperson.)