‘Bail out Main Street, not Wall Street’

John Parker WW photo

Following excerpts are from a commentary by John Parker from the International Action Center on the Pacifica radio station KPFK in Los Angeles on Sept. 25.

Bush told us that we had better accept this 700-billion-dollar handout to financial giants before we all go under.

Secretary Treasurer Henry Paulson said, “This entire proposal is about benefiting the American people because today’s fragile financial system puts their economic well-being at risk.”

Mr. Paulson added that, “Without action, Americans’ personal savings and the ability of consumers and business to finance spending, investment and job creation are threatened.”

So he’s saying it’s about our savings and ability to purchase and the creation of new jobs, given the high unemployment rates we’re suffering from. Also, what’s been finally acknowledged by the Democrats and Republicans is the housing crisis, in particular the unprecedented rate of foreclosures.

So these are the problems that could possibly be helped, they are telling us, with the 700 billion, at least enough to get us out of hot water.

Well, here’s a thought: Why not solve the crisis of jobs and housing directly? What would happen if the government invested 700 billion into housing? This money could be used to provide assistance to at-risk families of renters and homeowners. To make the point of how much could be done, let’s go to the extreme and say the government just up and builds new homes. Through economies of scale and the use of eminent domain to acquire land (after all, they keep telling us this is an emergency), the government could build homes at a cost of no more than $100,000 per home. This would mean that 7 million new homes could be built nationwide. Now, the foreclosure filings are predicted to go up to 2 million nationwide in 2008, so that would well cover the last few years of foreclosed families.

What would that mean for us here in California? Well, our portion of that 700-billion handout, according to the National Priorities Project, would be 89 billion. Or it could mean 890,000 homes this year in our state alone. That would about cover the entire foreclosures of last year and the predicted amount this year. Now magnify that nationwide. Ok, housing crisis solved.

Well, what about jobs? Nationwide we could produce 23 million full-time jobs at $15 per hour. Think that would put a serious dent in unemployment, and stimulate the economy? Once again crisis solved.

If the government did take these suggestions and use the 700 billion to directly create jobs and housing, it would not, however, be able to overcome capitalism’s fundamental problems that make these crises inevitable. But it would get us through the immediate crisis and significantly make a dent in the suffering of working and poor people while, at the same time, building a path towards full employment and the meeting of people’s basic needs of survival.

Their solution, however, does nothing to even slightly numb the pain their crisis has caused and will cause our class. It simply surrenders our future with blank checks to a ruling class of reckless bankers and brokers who’ve time and again proven their eager willingness to drive us further into crisis for the sake of profit, by any means.

So, given how easy it would be to get a handle on this mess, why haven’t the Democrats or Republicans considered this?

Well, I’m no economist, but I do know a little about conflict of interest and whose interests are being served here.

The financial publication Bloomberg reported yesterday that Goldman Sachs Group, Inc., one of the biggest beneficiaries of the $700 billion, plans to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp.

Isn’t it curious that Treasury Secretary Henry Paulson was the former chair and chief executive of the Goldman Sachs Group? However, Paulson is not just looking out for the interests of one financial institution; he’s protecting the interests of his class—made up of financial and industrial monopolies.

Believe me, it’s not us, the working class, they’re trying to save. Bail out Main Street! Not Wall Street!