Today's defeat of the Wall St. Bailout happened for many reasons but the main one is that this bill is very unpopular and its an election year. House Republicans need something to bring back home to their districts to avoid a complete rout in November. They think they have found their talking point.
I was also against the bill for many reasons but I also know that without some sort of plan the economy could spiral out of control. Bad debt has infected nearly every sector of the financial markets. Remember they were told these mortgage backed securities were safe investments with many having an A rating. Today's record point drop in the stock market showed that we are dangerously close to the tipping point. Banks have stopped lending to each other and each day another large institution fails. We are in the most serious financial meltdown since the depression. Wall St. executives are the robber barons of our time and another great depression could be looming. What can lawmakers do now? First and foremost any rescue plan should include taxpayer ownership of the companies that require a bailout. There needs to be some upside for the taxpayers after the investment firms have cleared their books of these bad assets. There must be a limit to executive compensation in all forms. There must be a tax on all investment transactions to pay for this huge bailout. We must also lower our corporate tax but cut out all loopholes. Corporate tax receipts as a percentage of our GDP are at a historic low. What good is a 35% tax rate when only small business is paying that? We must outlaw lobbying, it is legalized bribery and we should amend the Constitution to stop this incredibly destructive practice.
Today over 1 trillion of value was lost. The Dow is now lower than when President George W. Bush took office. We have all effectively lost 8 years of retirement savings and in twenty years the number of elderly who will live in poverty will grow unless a drastic market rebound occurs. The elimination of pensions for defined contribution plans made most people stock holders. This was a deliberate move by Wall St. for expanded profits. Now most Americans invest in stocks and its this fact that has made some institutions too big to fail. This problem is now worldwide and it threatens to wreak financial havoc throughout the world.
Our country is in danger of becoming a third world nation. We no longer are a manufacturing giant, in fact we hardly manufacture anything here. We are the world's largest debtor nation and our levels of poverty are getting close to third world status. Our population is less educated and the quality of our jobs is on a steady decline.
This is the result of deregulation and the idea that industry can police itself. John McCain recently said that deregulation has helped grow the economy. My 401(k) statements show that to be untrue.