Dems Should Make Bailout Bill More Progressive

David Brooks called people who voted against the bailout “nihilists.” Matt Lauer suggested that anyone who voted against the bailout bill did so to get political cover.

But there were sound reasons to vote against it.

Not on the Republican side, where those who worship the golden calf of the free market want no government intervention at all.

This is a time for government intervention in the economy. The free market has proven to be incapable of policing itself or of functioning rationally.

On the other hand, progressive Democrats were absolutely right to object to the kind of bailout that Paulson was forcing upon us.

No re-regulation of the financial industry was in the bill, so the same shenanigans that caused the crisis could recur at any time.

There was no restoration of Glass-Steagall.

No overturning of the Commodities Futures Modernization Act.

No insistence that lenders of mortgages can’t resell those mortgages up the polluted stream of finance.

And the bill offered no help to the people who are hurting the most: those facing foreclosure.

There was no moratorium on foreclosures.

No freeze on interest rates on those nasty subprime mortgages.

Not even a provision to allow judges to renegotiate mortgages of those who file for bankruptcy.

Nor did it have a stimulus component to get our economy going at the local level.

No, there was $700 billion—and just for Wall Street.

And we were all supposed to take it because otherwise the banks wouldn’t be able to lend, we were told. And disaster would follow, we were told.

Well, people are sick of the scare tactics, and sick of the government spending hundreds of billions of dollars to bail out bad actors without forcing them to change their ways.

The amazing thing, at the beginning of the debate, was that the free market Republicans were the ones objecting most.

Fortunately, progressive and populist Democrats spoke up and opposed the bill from the opposite side.

Now it’s up to the leadership of the Democratic Party, which after all controls Congress, to make the bill more progressive—and not to bow to the Republicans.