BY TOM TOMORROW
Write and call your representative and senators plus Nancy Pelosi and Harry Reid this morning and tell them to tell the Bush administration NO on their proposed $700 billion handout to Wall Street. Congress obviously can propose a much better plan of its own, but the first thing to do is kill this monstrosity.
Congress main line
(202) 224-3121
Nancy Pelosi
(202) 225-0100
Write Pelosi (corrected)
Harry Reid
(202) 224-3542
Write Reid
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.” If this deal succeeds, I predict it will become a transforming event in American politics–exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice.
One of Paul Krugman’s readers sent him this quote from a recent article “by” John McCain called “Better Health Care at Lower Cost for Every American” (pdf):
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.
The only way McCain could do more to help Obama win is if he went on stage for the first debate next Friday, pulled a kitten out of his pocket, and bit off its head. Yet despite McCain’s assistance, I still have faith the Democrats may manage to pull this out of the fire at the last second and lose.
Alan Greenspan was knighted by the Queen of England in 2002. Here’s the citation announced at the time by the British Treasury:
The award is in recognition of his outstanding contribution to global economic stability and the benefit…realized from the wisdom and skill with which he has led the U.S. Federal Reserve Board.
Greg Mankiw is an ultra-fancy economics professor at Harvard who teaches a famous introductory class there. Here’s what he wrote on his blog yesterday:
Today is the first day of Harvard’s academic year, and the first day of a new year of ec 10. I will give the introductory lecture at noon.
I would like to thank all my friends on Wall Street for doing so much to spark interest in economic issues. You have gone beyond the call of duty, and your timing could not have been better.
Ha ha ha! That’s quite droll!
But here’s what Professor Mankiw is too funny to mention: he was Chairman of the White House Council of Economic Advisers from 2003-2005, during some of the prime years of the housing bubble’s inflation. Thus there are probably fewer than five people on earth who had more power to get things under control. Yet not only did Mankiw do nothing whatsoever, when I interviewed him for an article in 2005 (after he left the White House and returned to Harvard), he become extremely agitated at the notion that a housing bubble even existed.
Hence, he should get a large, large chunk of the credit for managing to “spark interest in economic issues.” I guess he’s just too modest to bring it up!
ALSO: I’m going to go out on a limb and guess there’s a connection between Mankiw’s White House performance on the housing bubble and the impressive number of “friends on Wall Street” he possesses.
AND: Besides being so funny, Mankiw is a hero to the oppressed.