In the headlines yesterday, George W. Bush expressed panic about the economy. The same man who has repeatedly denied that America is in an economic meltdown is now calling the $700B bailout of financial institutions “urgent” and warning Americans of the doom and gloom that is sure to follow if Congress fails to hand Wall Street some taxpayer-made bootstraps.
There are a few things the average worker knows that have escaped the narrow minds of politicians. Despite the lies and empty assurances coming from Washington, we’ve known about the meltdown for a few years. We have felt the indifferent shoulder of Congress as Exxon reported astronomical, record breaking profits two quarters in a row last year. We felt the pain at the gas pump and the grocery store, even as our smirking President was telling us all would be fine. We’ve seen our jobs get cut, our wages stagnate, and our cost of living rise. Many of us sent our “economic stimulus” checks right back to one of the financial institutions in question. So this sense of impending doom is not exactly new to us.
We also know that this bailout has disaster written all over it. Financial institutions are suffering, in large part, due to the failures of its clients to pay their debts. Those clients are us – the average citizen and small businesses – and until our prospects improve, we will continue to struggle, which means that this massive bailout will be no more than a ridiculously expensive and temporary Band-Aid. There is no bailout or relief for the working and middle classes planned in the near future, and until our prospects improve, we’re going to continue to be financial risks.
We can also tell Congress and the financial institutions a few things about bootstraps and sacrifice. Namely, that when you’re down, the answer is not to rob and pillage those who support you, but to work with them towards a win-win solution. Yet, the same financial institutions who are begging for corporate welfare are those who have adopted some of the most unethical, vicious, and predatory policies towards its own customers.
Capital One, for instance, has policies that substantially raise the interest rates of customers who are one day late with their payments. Chase Manhattan and Household Bank have similar policies. I know a woman whose interest rate on her credit card was raised from 15% to 29.95% for being (less than a week) late with a payment twice in one year. When financial institutions add exorbitant late fees to substantially increased interest rates for imperfect but paying customers, they profit in the short term, but in the long term, they hamper the ability of consumers to pay down their debts. A debt-ridden public is one that is at risk for more financial disasters, including foreclosures and bankruptcies.
The American public should say no to corporate welfare, and let the financial institutions find the incentive — and the bootstraps — to correct a problem they are at least partially responsible for creating.