some permutation of the Paulson bailout is basically a fait accompli. The Hill reports that House Democrats have declared their willingness to approve the bailout provided a majority of Republicans join them. ABC News reported today that Democrats are ready to support it provided that McCain supports it as well, and the NYT summarized Obama's position as supportive of the Paulson plan with some oversight provisions and other protections added on (though without the requirement that the Government obtain an equity stake in these companies rather than ownership of their toxic assets -- the provision that Paul Krugman has identified as being an absolute prerequisite for any deal to be remotely fair or tolerable: "No equity stake, no deal").

In sum, it seems as though Democrats and Republicans -- and both presidential campaigns -- are preparing to jointly endorse some mildly improved version of the Paulson plan, on the premise that if they both do it, neither side will pay politically. As David Sirota notes, bank lobbyists have already decided they don't need to take Chris Dodd or any other intransigent members seriously because their winning is inevitable. Wall Street and corporate America can't lose in Congress -- they never do -- for one very simple reason: they own Congress and the "leaders" of it. Just listen to Rep. Marcy Kaptur;

For one thing it really does look like a parachute for the empire, in that it will bail out any global financial institution that happens to have what Paulson deems 'significant' investments in the US economy, whether they are in deep trouble already or not. This looks like a move to consolidate America's faltering command of the financial system and to ensure that the global appropriation of labour continues to operate overwhelmingly in the interests of US capital. Secondly, there are no protections for homeowners or taxpayers, no limits on executive remuneration, no plans to stimulate the economy, and no demands for reciprocity (ie, we give you $700bn, you give us...). This is just throwing money at the ruling class. So, as one might have predicted, the crisis is being used to shore up the class power of the rich through a massive act of expropriation.

posted by Scats : 9/24/2008 03:48:00 PM