Bail Out or Intentional Failure?

It seemed as though Congress and the President were going to make a deal to help out homeowners, banks, and our failing economy. The deal’s proximity to closure was announced on television and in early editions. Then . . . it did not happen.

(NY Observer/RJ Matson co 2008)

Early this morning, pictures of McCain and Obama at the table with President Bush circulated. Stories abounded about where they were seated, who they talked to, and how press were banned from the actual deliberations. If House Caucus Chairman Rahm Emanuel is to be believed, that shift in the press was also mirrored in the meeting.

When asked point blank what happened to derail the agreement today on MSNBC, Emanuel responded by saying that everyone was basically in agreement “until politics came in.” He also spoke at length about how wrongheaded it was for McCain to make the deliberations into a political event or political grandstanding. In concluding, he also said “now that they [presumably McCain and Obama] are gone” Congress can get back to the business of solving the problem.

As he spoke, however, other sources reported that a small group of Republicans was holding negotiations hostage because of a limit to concessions for banking big wigs. Whether their decision is based on lobbyist influences, fiscal alignment with bankers and corporations, or simply a stall tactic to hold off an agreement until McCain can rush back after the debate, it is unclear. What is clear however is that Republican Congressmen are playing party politics with N. Americans’ futures and Emanuel has implied so is presidential wannabe John McCain.

Since the start of the school year I have lost 5 students to the mortgage crisis. Not having homes or knowing how they will pay their bills means that they had to drop out of school and hopefully recoup some of their tuition money, while others simply could not handle anymore additional debt offered to them by the Financial Aid Office. This is one reason why I keep writing posts about Financial Aid as an equally important crisis.

I have also lost regular attendance of students to the gas crisis. We are not a small liberal arts college where everyone lives off exclusive-restaurant quality campus meals and fancy housing with pools. We are largely a commuter college in which people travel from rural towns half the state away to get to class. Despite what students and faculty at richer schools have said about the “doom and gloom drama” of reports that students are being lost to gas prices, I can tell you for a fact that our classes are light and our attendance is sporadic based on the fluctuation of gas prices.

And while I used to bring snacks for my evening seminar, I’ve been more and more inclined to bring substantial snacks to all my classes as I hear stories of students going without lunch to make sure their kids have all 3 meals in an economy where the price of milk and bread has gone up 3-4 times in the last year. (Twice now, I have laid down an extra $20 for the elderly person in front or in back of the line of me in the grocery store as I watch them literally counting pennies.) And this is why I keep writing posts about the disconnect between a government with subsidized health care and better salaries than the majority of working and middle class people in N. America claiming “if we don’t do something there is going to be a recession.”  They are the only one’s I know not in the middle of one.

Now WAMU is closed.  They were not shut down due to some banking failure but rather a dust bowl like fear that the banking system was going to collapse. In the course of 10 days, so many WAMU customers emptied their accounts that WAMU could not remain financially accountable to investors or bank account holders and had to be sold.

This is the environment we are living in:

  • tent cities outside of major cities in California that sprang up over a year ago and are getting worse
  • whole neighborhoods foreclosed on
  • banks shut down because of runs on account holders’ money
  • food prices that are putting working class families at risk for missing meals or not meeting major nutritional bench marks
  • gas prices high enough to rob people of their educations because they can no longer afford the drive in
  • unemployment high enough that in some states people who lose their jobs are projected to be out of work for 1 or more years
  • this generation is not projected to live at or above the attainment levels of their parents, a first in our history

I wish this was exaggeration and paranoia. I really wish this was one of those moments where I was simply taking my analysis to its most extreme end. But I am not and the print media, student report, foreclosure records, the unemployment rate, financial assistance records, grocery store pricing and the stats that rack it, and my own eyes have all told these stories time and again.


Yet at least one candidate for President not only used this crisis as an opportunity to bump his dwindling poll numbers, continuing to march past cameras on a cell phone like he could actually be making deals with people inside a closed session, he now stands accused of using partisan politics and election grandstanding to derail the process when a deal was about to be closed. He can afford continued instability because even if they foreclose on one of his houses he has 5 more to choose from.

Certain kinds of economic policies took us from a country with

  • a balanced budget
  • growing employment among traditionally marginalized groups as well as in the financial centers
  • increased educational attainment
  • and a housing market boom

to one of

  • trillions of dollars in debt
  • a housing crisis
  • banks auctioned off
  • stagflation
  • rapid and prolonged unemployment

One of two men has voted consistently with the policies of the latter administration and he is the same man who is accused of holding policymakers hostage at the expense of the N. American people in the hopes you are too stupid to see how a deal fell through the minute he and his opponent arrived at the table.


You are not stupid. If you have not registered vote, time is running out, please do so. If you have available time consider volunteering to register people in your area; you don’t have to go door to door, in most places they are stationing people outside banks, grocery stores, and other similar areas. And please think long and hard about whether you want to spend the next four years in a rebuilding economy or following the same old plan.

Promises from a politician are promises seldom kept. Actions and voting records are clear.


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