First of a three-part series on the economic crisis.
You, telling me the things you’re gonna do for me.
I ain’t blind and I don’t like what I think I see.
–Michael McDonald, The Doobie Brothers,
“Takin’ It To the Streets”
For what is the crime of robbing a bank, compared with the crime of owning one? –Berthold Brecht
So now that President Obama is in office, his economic team is in place, the largest stimulus package in US history is nearly complete, real interest rates are negative and the Treasury is about to announce a “big bang” version of TARP that provides even more capital to private banks, we’re good, right?
Lo siento, no, as shown by last week’s steep stock market slide, even after his program passed the House. For once, the Republican wingnuts may be right. There really is much less to Obama’s stimulus than meets the eye.
His new plan for ridding the banks of toxic assets–“cash for trash,” as economist Joseph Stiglitz has aptly described it–is also likely to be way too kind to bank executives and shareholders, and he appears to be remarkably ignorant about the indisputable successes that capitalist countries like Norway, Chile, and Japan have had with temporary, partial bank nationalizations that make the taxpayers “owners of last resort.”
There has been far too little debt relief provided to the growing number of homeowners facing foreclosure, small business owners facing bankruptcy, and other debtors. This step is urgently needed to stem the free fall in housing prices and the rising tide of layoffs among small businesses, where most of the country’s jobs are.
There are rumors afloat that Obama’s team may soon announce something like this, but the numbers that we’ve heard from key Congressmen–$50 billion to $100 billion–are far too modest. We need to pressure the president for a “People’s TARP,” no less generous than the ones that the banks are receiving.
Finally, while US policymakers have been throwing gargantuan sums of borrowed money at the wall, mollycoddling Wall Street, and dithering on debt relief for the rest of us, the global crisis has deepened. All across Europe and Asia–from Athens, Chongqging, London, Moscow, Paris and Prague, to Rekyavik, Riga, Seoul, Sofia and Vilnius–people have become completely fed up with their governments and are taking it to the streets.
So here’s a message for our new president, from someone who worked hard for his election long before it was fashionable: if you dally and temporize, the very same thing could easily happen here–perhaps just in the form of a massive tax strike, in solidarity with Messrs. Geithner and Daschle.