Monday, October 01, 2007

Why Not A Leveraged Bailout?

Today's imminent collapse of the secondary loan market and talk of a bailout reminds me of nothing so much as the early 90s when I cut my teeth on public policy in the midst of the savings and loan bailouts. My former boss Michael Waldman (later a POTUS speech writer) literally wrote the book on 'em. I remember his cynical coaching, "the corporate interests hate socialism when it's for the rest of, but love it when it's for them."

So true. One need look no further than the classic red-baiting consistently used to bring down any form of credible proposal for health care reform. How can it be that the same interests that come together through the Chamber of Commerce to bash government so consistently can expect the taxpayers to foot the bill for a multi-billion dollar bailout for their crushingly bad investment decisions?

Of course I oppose a bailout of these interests. Yes, I vaguely understand the ripple effect, the number of potential homeowners that might not get a loan without a "secondary market" to buy it up from their bank, etc. I grok. But I stubbornly believe, however naively, that banks will make loans if they are good business decisions and they won't if they aren't. I don't believe it does consumers any good to pull them into loans they can't afford and will default on. I don't believe propping up the over-inflated housing market is in the short or long-term interests of working people.

Although the Fed's aggressive action may have staved off a bailout for a time, I tend to believe a bailout is probably foreordained because the combined interests of wall street, campaign contributors and the perceived interests of consumers in getting more risky loans, will be enough to create a congressional majority, if not consensus, for taxpayer bailout of the sub prime market.

So given that virtual inevitability, I suggest we prevail upon the liberal Democrats to leverage something major out of the deal, something they've never mustered the will for before: a truce against government. If Capital gets to raid the Treasury, they agree to a moratorium on government bashing for say, the life of a typical home loan: 30 years.

This way, Congress takes out a 30 year mortgage from big business (and it has to be the whole friggin' chamber of commerce and its interlocking directorates that sign off on it, not just the lenders). The interest paid is this: the space for Congress to regulate for the good of the American people in an environment not poisoned by anti-government toxins.

Better yet, the Dems should push for big business to agree to front a major pro government campaign. Start disclosing on all their advertisements the government breaks that make it possible for them to exist and make money.

Picture this:

"It's never too late to refinance your home with Nations Bank--come in for a free consultation tomorrow. We can afford to loan you this money because of your tax dollars."

or

"The relationship between you and your doctor is treasured by Sutter Medical Group and the federal government."

Now that's a bailout.

1 comment:

snichols said...

Posted by Belina:
Sara, I applaud your blog on cell phones and kids if for no other reason than it
challenges the never-questioned assumption that cellphones increase safety.
Cellphones are just part of my more general observation of children and their
parents that so much is about the parents and not the kids. Past a certain age,
children and, especially, teenagers barely worry about their safety at all. In
fact, teenagers are invincible, so they are not carrying cellphones to make
themselves feel more secure, but, as you point out, for the parents to feel more
secure. Seeing cellphones carried by children and teenagers made me wonder
initially how I ever got out of childhood and adolescence alive without one.
But I did. For all the reasons you point out: my parents knew where I was or
should be and expected me to check in or be home at a certain time. Recently,
my mother couldn't reach me for several hours when she worried something had happened to me in transit and it increased her anxiety because she thought she
should be able to reach me. I had simply forgotten to turn my cellphone on.
When I was a kid, she wouldn't worry until I didn't show up where and when I
said I would. Because sometimes I wasn't anywhere, meaning I was in the woods
or biking or playing in a park. As with all these forms of communications, they
create the assumption and expectation on the part of the one initiating a
communication that the person on the other end has or should receive the
communication immediately and, if not, something must be wrong.
Cellphones are a double-edged sword for adults as well. Living in Manhattan, I
can't tell you the number of pedestrians who cross the street in
mid-conversation with a cellphone pressed to their ear, obviously less aware but
also decreasing their visual perception and reaction time. If the person
driving the car at the intersection being crossed by the pedestrian who is
talking on a cellphone is ALSO talking on a cellphone, than no one is where there should be -- thinking about their
safety at that moment. Except if they are talking to each other, which, I
suspect, isn't very often the case. And as you point out, a child could lie
about his or her whereabouts. I guess the solution to this is the tracking
technology that can locate the phone. But wiley teenagers will just leave the
cellphones at the house they're supposed to be in and then go with Tiffany to
the crackhouse in San Francisco anyway. Teenagers want and deserve some
independence from their parents and sometimes desperately need it. Escape and
freedom are part of being a teenager. Imagine Huckleberry Finn with a
cellphone. Without fostering a sense in children that privacy and independence
are valuable, what kind of future generation of citizens will we have? A
generation that is used to being monitored constantly and, therefore, do not
necessarily value liberty and privacy and are willing to subordinate those
values for security. Oh, . . . wait a minute now . . . that just may be what some people are hoping for.