The Wall Street and economic crisis that the US is facing right now was predicted and expected to happen. You might ask “well then why was it not stopped ahead of time?”. And the answer I have to say to that is, because they started it.

The Gramm-Leach-Bliley Act

In 1999 the Gramm-Leach-Bliley Act was brought to congress and was shoved through legislation by republicans and democrats alike. In fact it was signed by Bill Clinton himself. What this act basically did was set the stage for our current economic crisis by deregulating the credit swaps and hybrid instruments that were previously illegal under US law.

Lending went from a lengthy, regulated, and involved process to a “fast food” drive through service. The fact of the matter is that being lent money shouldn’t be easy. It should be an involved process where the banks protect themselves from giving away money they know they won’t get back. The consequences of this legislation is now being seen right on our doorsteps today.

The $700 Billion Dollar Bailout

Who are we bailing out? If the president had his way, it will be simply the corporate executives. The same corporate executives that are responsible for these horrible lending practices. They loaned the money and they knew it was dangerous. This of course did not stop them from chasing the all mighty dollar sign. Instead, they continued on this predicted path to self destruction to only reach an end where the tax payers they screwed would have to bail them out with $700 billion dollars.

This bailout may be needed, but what the president and the treasury secretary, Henry Paulson, are suggesting is a non-transparent, unregulated agreement that gives these executives a free ride out of this crises with large amounts of tax payer dollars in their pockets. Tax payers should be demanding investigations and possibly legal charges against these crooks, not paying them off for this dishonesty and lack of ethics.

What this means to US citizens

Bush and congress have passed legislation that makes it harder for the average US citizen to declare bankruptcy. When Wall Street executives declare bankruptcy, they rush to the rescue. When 7 billion dollars is needed to provide health care to 46 million children in this country, the answer is “we don’t have it”. $700 billion is not a problem for a Wall Street bailout though. This bailout should be for citizens and strengthening our crumbling economy, not providing these bankers with an escape out the back door.

I’ll end this with a quote from Dean Baker, from the Center for Economic and Policy Research.

The people hate Wall Street now. They see that you have the highest-paid people in the country that ruined their companies, ruined the economy, and now they’re asking for a handout. We have a chance to turn around the inequality that’s been built up over the last thirty years by hitting it right at the top, if we focus in the right direction. We can do this.

Quote courtesy of DemocracyNow.

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