October 1, 2008
The Senate voted tonight in favor of a huge bailout for some Wall Street gamblers who shot for the moon and missed. The Senate didn’t deal with the real roots of the financial crisis–the decades of deregulation and dismantling of the Depression era legislation (such as Glass-Steagall) that had for years effectively prevented just this kind of crisis. Although some senators today acknowledged this underlying problem, they chose to defer any discussion on re-instituting regulatory laws until January. According to them, it was now necessary to pass some kind of quick fix, so that investors would not choose to make things worse. But why were the senators so convinced that it was necessary to pass something quickly, rather than deal with the root problems? Besides the obvious conflict of interest (too many of our legislators, of both parties, are heavily supported by the same financial interests that are being bailed out), there is also a fundamental problem with the irrational financial system that we have allowed to take control of our lives. Do we decide national economic policy based upon how to keep our citizens employed, housed or fed, or on manufacturing the goods that we need, or on what our health care needs are, or on how we can minimize the environmental damage to our planet? No. Instead our policy is primarily based on trying to second-guess how a bunch of gamblers, otherwise known as investors, will react tomorrow, or the next day, in their narrow little ‘market place’ game of trying to outdo each other in the accumulation of personal wealth. This is not rational economic policy. I urge our representatives in the House to do the right thing and insist on putting proven regulatory constraints back in place before allowing any kind of bailout for the Wall Street game-players.