Brian T. Watson
With all of the resentment and anger among us ordinary citizens on the street, we are in danger of drawing some wrong conclusions. As we evaluate the proposed solution for the Wall Street mess, and as we contemplate our presidential preferences for the fall election, we should question how savvy we've been and vow to become smarter.
Average Americans are mad at everybody, and rightly so. The current chaos on Wall Street is just the latest in a long string of difficulties that citizens have had to endure.
In the 1970s and '80s, steel, manufacturing, assembly, and other solid, blue-collar jobs left our country for overseas where labor was cheaper. In the 1990s, engineering, computer-related, and white-collar jobs did the same. In this decade, globalization continues to pressure the American workforce and exert a constant restraint on wages.
Health-care costs have been unmanageable and 40 million Americans have no health insurance.
Consumer credit card debt is enormous. Tens of millions of households with no savings at all are carrying tens of thousands of dollars of debt — and that is not counting their mortgages.
Energy costs are whipsawing the economy and individual households, and are poised to hammer us further. Since the oil shocks of the 1970s — despite efforts at energy efficiency — relatively little progress has been made to reduce our vulnerability to our overwhelmingly coal- and petroleum-based economy.
The war in Iraq has been a colossal disaster, and we have barely begun to pay for it. We'll soon be asked to start paying off what will be close to $3 trillion of war-related obligations.
Lastly, in the past decade, even as lower and middle-income workers have struggled with job insecurity and reduced wages, the corporate, executive class — the top 5 percent of income-earners — has thrived beyond imagination. Obscene executive salaries and bonuses — 200 to 300 times average worker pay — and gross extravagances like $20-million condos and personal jets, have created an unfair, exploitative, indefensible, and unhealthy income gap.
It is against that backdrop that ordinary citizens are seeing this latest insult — the request to pony up $700 billion to rescue Wall Street from its own excesses. And the speed with which Congress has been pressured to act on what is perceived as a "bailout" is especially grating to citizens who for the past two years have observed the passive government reaction to the home foreclosure crisis.
But though our anger is warranted, our country needs a prudent rescue of Wall Street. The banks, businesses, credit markets, and pension funds of "Main Street" are so inseparably connected to the trajectory of Wall Street, that it has become impossible to allow it to crash. It is all of America that is being bailed out.
Many large and small manufacturing and products companies — "real" businesses that employ large numbers of workers — are struggling to finance and conduct their normal weekly operations. By a variety of complicated and intertwined debt and credit mechanisms, companies are dependent upon the uninterrupted activities of Wall Street.
The good news is that when we rescue Wall Street, we'll begin to stabilize our economy and help all of us.
With an improved bill, we will also halt home foreclosures, limit executive pay, stimulate lending, and monitor how the $700 billion is spent (which we may eventually recover).
Although the excessive borrowing, crazy spending, and unsustainable practices that afflict all sectors of our economy have taken 30 years to build, the Bush administration has for eight years grievously misled a citizenry all too eager to believe.
The Bush administration has pretended to be for the average worker.
But its real interest has been the corporate class. Bush's tax policies and his inaction on health insurance, home foreclosures, and the long-brewing Wall Street crisis, show us that.
Bush has enriched only the pharmaceutical, fossil-fuel, and weapons manufacturers. He pretends to be a "free market" guy. Don't believe it. There are thousands of lobbyists on Capitol Hill who work with Congress and the Bush administration to align government policy and spending with market interests.
And Bush has divided ordinary Americans while the corporate class has laughed all the way to the bank. The broad middle class argues endlessly with itself over taxes, while the rich simply are not paying their fair share. Meanwhile, Bush has simply borrowed another $700 billion to finance the Iraq war.
Well, the Wall Street crisis is a wake-up call. We need better regulation and oversight, new tax policies, less borrowing, less war, and real political honesty and leadership.
Lastly, we ordinary citizens need to be smarter, better informed, and less easily manipulated. We need to stop relying on our favorite talk show, Web site, or newspaper, and read more widely.
When we vote in November, I hope the appalling Bush presidency and the Wall Street crisis will have taught us about the importance of presidential judgment and the dangers of demonizing government and taxes.
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Brian T. Watson of Swampscott is a regular Salem News columnist. Contact him at watson@nii.net
