Phil Gramm, the senator-banker who until recently advised John McCain’s campaign, did get it right about a "nation of whiners," but he misidentified thefaint-hearted. It’s not the people or even the politicians. It is WallStreet–the financial titans and big-money bankers, the most importantinvestors and worldwide creditors who are scared witless by events.These folks are in full-flight panic and screaming for mercy fromWashington, Their cries were answered by the massive federal bailout ofFannie Mae and Freddy Mac, the endangered mortgage companies.
When the monied interests whined, they made themselves heard by dumping the stocksof these two quasi-public private corporations, threatening to collapsethe two financial firms like the investor "run" that wiped out BearStearns in March. The real distress of the banks and brokerages andmajor investors is that they cannot unload the rotten mortgagesecurities packaged by Fannie Mae and banks sold worldwide. Wall Street’s preferred solution: dump the bad paper on the rest of us, the unwitting American taxpayers.
The Bush crowd, always so reluctant to support federal aid for merepeople, stepped up to the challenge and did as it was told. TreasurySecretary Paulson (ex-Goldman Sachs) and his sidekick, Federal ReserveChairman Ben Bernanke, announced their bailout plan on Sunday to preventanother disastrous selloff on Monday when markets opened. Like thefirst-stage rescue of Wall Street’s largest investment firms in March,this bold stroke was said to benefit all of us. The whole kingdom ofAmerican high finance would tumble down if government failed to act ormade the financial guys pay for their own reckless delusions. Instead,dump the losses on the people.
Democrats who imagine they may find some partisan advantage in theseevents are deeply mistaken. The Democratic party was co-author of thedisaster we are experiencing and its leaders fell in line swiftly. Housebanking chair, Rep. Barney Frank, announced he could have the bailoutbill on President Bush’s desk next week. No need to confuse citizens bydwelling on the details. Save Wall Street first. Maybe lowbrow citizenswon’t notice it’s their money.