The photograph is annoying.  Hank Paulson stands at the microphone surrounded by Nancy Pelosi and other Dem and Repuglican Congressional leaders with suitably serious expressions on the faces indicating that the US financial system has gone to hell.  But not one Democrat there had the cojones, when their turn came at the microphone to remind Americans why the US is in financial crisis: the mortgage debacle and greedy, fraudulent practices by mortgage lenders and other financial institutions fueled by the deregulatory, no regulation Bush criminal regime.

 

And Hank Paulson was part of the problem.  Not one Democratic "leader" standing there mentioned his hypocritical denials of a grave problem, and a protect the Republican and Bush regime role in this unfolding tsunami of a crisis.  It's absolutely disgusting.

 

This bailout is coming on the backs of struggling American workers, not the wealthy few who caused this catastrophe.

 

As Jonathan Tasini writes at Working Life: "So, let's see if we can sum this week's drama:

"Over the past weekend, Treasury Secretary Henry Paulson says, basically, nothing to worry about, we've got this financial crisis under control now that we--the taxpayers--own Freddie Mac and Fannie Mae.

   "Opppsss...then comes Monday. Paulson says, eh, don't worry everything is okay even though Merrill Lynch was headed for a sale and Lehman Brothers was headed for the auction bloc and the markets all over the world were in a freefall.

   "Opppsss...then, comes Tuesday. After the Dow dropped more than 500 points and panic was everywhere, Paulson says to us, don't worry, the worst part of the housing market crisis is probably behind us, or maybe a few months away.

   "Opppsss...then comes Wednesday and good 'ole Hank has to dip into the Federal Treasury again for a cool $85 billion to make sure AIG doesn't go belly up and ignite an entire cratering of an already-tottering financial market. At least news reports indicated that Hank was a bit grim-looking but everyone was still trying to reassure us.

   "Opppsss...Thursday rolls around and, guess what, you and I--and the rest of the taxpayer world--are going to pick up hundreds of billions of dollars in bad debt, thanks to:

The federal government is working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues. At the center of the potential plan is a mechanism that would take bad assets off the balance sheets of financial companies, said people familiar with the matter, a device that echoes similar moves taken in past financial crises. The size of the entity could reach hundreds of billions of dollars, one person said.

   "And, just now, Paulson has confirmed the deal, without many specifics...

  "So, the questions will be:

   1. What is this going to cost us?

   2. Since many of the very people who made this crisis happen made off with billions of dollars over time in compensation, shouldn't this tab be paid for by a tax hike on the wealthiest Americans?

   3. What assurances will the public get that we are now going to clean house? The CEOs and managers and their ilk should be permanently barred from having a hand in this business."

Well, the guesstimates say the cost may be $1 trillion.

And William Greider at The Nation cautions: "Financial-market wise guys, who had been seized with fear, are suddenly drunk with hope. They are rallying explosively because they think they have successfully stampeded Washington into accepting the Wall Street Journal solution to the crisis: dump it all on the taxpayers. That is the meaning of the massive bailout Treasury Secretary Henry Paulson has shopped around Congress. It would relieve the major banks and investment firms of their mountainous rotten assets and make the public swallow their losses--many hundreds of billions, maybe much more. What's not to like if you are a financial titan threatened with extinction?

"If Wall Street gets away with this, it will represent an historic swindle of the American public--all sugar for the villains, lasting pain and damage for the victims. My advice to Washington politicians: Stop, take a deep breath and examine what you are being told to do by so-called "responsible opinion."

"The scandal is not that government is acting. The scandal is that government is not acting forcefully enough--using its ultimate emergency powers to take full control of the financial system and impose order on banks, firms and markets. Stop the music, so to speak, instead of allowing individual financiers and traders to take opportunistic moves to save themselves at the expense of the system. The step-by-step rescues that the Federal Reserve and Treasury have executed to date have failed utterly to reverse the flight of investors and banks worldwide from lending or buying in doubtful times. There is no obvious reason to assume this bailout proposal will change their minds, though it will certainly feel good to the financial houses that get to dump their bad paper on the government.

"A serious intervention in which Washington takes charge would, first, require a new central authority to supervise the financial institutions and compel them to support the government's actions to stabilize the system. Government can apply killer leverage to the financial players: accept our objectives and follow our instructions or you are left on your own--cut off from government lending spigots and ineligible for any direct assistance. If they decline to cooperate, the money guys are stuck with their own mess. If they resist the government's orders to keep lending to the real economy of producers and consumers, banks and brokers will be effectively isolated, therefore doomed.

"Only with these conditions, and some others, should the federal government be willing to take ownership--temporarily--of the rotten financial assets that are dragging down funds, banks and brokerages. Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets--property, houses, shopping centers--that could be readily resold by the Resolution Trust Corporation at bargain prices. This crisis involves ethereal financial instruments of unknowable value--not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

"Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC--profiting on the upside, then again on the downside. Guess who picked up the tab? I suspect Wall Street is envisioning a similar bonanza--the chance to harvest new profit from their own fraud and criminal irresponsibility.    

"...The people should make themselves heard in Washington, even if only to share their outrage."     (Read the rest here.)

A final word on the Congressional leaders gathering. Nancy Pelosi, who took impeachment off the table, was standing near Paulson and uttered nary a word about Paulsen and her Repugulican colleagues in the group who supported the wealthy perpetrators of this financial catastrophe and their leader, Bush, and 2008 nominee, McSame, who did nothing to nip it in the bud but instead promoted the criminal actions of Wall Street and now bailing them out.

Wake up people!