According to filmmaker Michael Moore, the Corporate Crime of the Century was averted – at least for 72 hours – by US lawmakers’ 228 to 205 vote rejecting the $700 billion financial bailout.
Moore says the Republicans' desertion of their president was motivated purely by election season politics: after years of wrong-headed policies that favored the plutocrats over the people, they are suddenly full of fulsome compassion for the common folk.
“Watching [the US Congressional channel] C-Span yesterday morning was one of the best comedy shows I'd seen in ages,” Moore writes on his Web site. “There they were, one Republican after another who had backed the war and sunk the country into record debt, who had voted to kill every regulation that would have kept Wall Street in check – there they were, now crying foul and standing up for the little guy!”
Moore plans to offer his own proposals later Tuesday. They are sure to feature a radically sharpened focus on those at the bottom of the financial ash heap – harried homeowners facing foreclosure.
With the Big Bailout (at least as envisaged by Henry Paulson and Ben Bernanke) now consigned to Congress’s Big Trash Bin, the warp-speed speculation is under way as to what might come next – and whether it will be effective.
In other words, will the next episode in this financial trapeze act be “The Bailout, The Sequel”? Or is it more likely to be an epitaph, “The Bailout, R.I.P.,” as some have suggested.
One scenario assumes that Congress will pick up the broken pieces and try to reassemble in a more politically acceptable – and yes, this has become very political – configuration. Even assuming a hitch-free ride, no new plan could pass Congress before Thursday at the earliest, when the House, whose renegade Republican members played a large role in bringing down the bailout bill, reconvenes.
The alternative scenario is to tear up the existing bill and rework it from scratch. Sure, that would take a lot of creative brainstorming and further delays – but proponents see this as the only fair way to proceed if ordinary citizens are to get a fair shake. The bailout in its current form, critics say, is a giant hoodwink, cloaked in political respectability.
In the absence of a bailout, the Fed and Treasury still have several options at their disposal, as The New York Times points out. The Fed can continue one of its main vocations, which is to print dollars and thus keep the cogs of the financial system well-greased with liquidity. The Fed has already pumped hundreds of billions of dollars into the world’s money markets, and other central banks have followed suit by injecting billions more in their own currencies.
Another possibility, according to the Times, is that the Fed and Treasury continue handling the crisis on a case-by-case basis, as they did in the pre-Bailout Plan days. Of course, that course failed to solve the trust and confidence problem before, and there’s little reason to believe it would work now.
In the end, the only enduring solution to the crisis will have to come from a paradigm shift in the way we think about the US financial model. That means an end to the easy credit culture that has become an article of faith for many Americans and some Europeans.