No Blame Warranted, Only Thanks: The Bailout Fails

Today was a good day for America. Blame? What Blame? Just, THANK YOU, brave members of the House of Representatives who voted No on the so-called Emergency Economic Stabilization Act.

This is the letter I wrote to my political leaders after today's happy defeat of the proposed Act. I also mailed this message mutatis mutandis to the Obama and McCain campaigns. If you wish to express your disapproval of a Secretary Paulson-based plan, in favor of a plan that addresses the root cause of the credit crisis and that gives relief to the victims of the bankers Paulson's plan would reward, I urge you speedily to write to your policital leaders at Congress.org and to urge your like-minded friends to do the same.

Message sent to the following recipients:
Secretary Henry Paulson
Representative Don Young
Senator Lisa Murkowski
Senator Ted Stevens
President George W. Bush

Robert Elston
[Street Address]
Juneau, AK 99801

September 30, 2008

[recipient address was inserted here]

[recipient name was inserted here],

I want to express my thanks to Representative Don Young for having the courage to vote No on the so-called Economic Stabilization Act. That bill was fundamentally flawed and would have enacted an unprecedented boondoggle that rewarded the financial institutions whose unscrupulous practices caused the current financial crisis, that put too much power into the hands of a man who has too many conflicts of interest with the financial companies that stood to gain, and that did not address the root problem and thus was destined to fail, both in the long and short terms.

Secretary Paulson's approach needs to be scrapped because it protects and further enriches the perpetrators and does not rescue the victims. Instead of a bill that bails out investment banks and other unscrupulous companies, that keeps the hen house under the guard of the foxes, and that spends future taxpayer revenues, adding nearly ten percent to the already obscene national debt, Congress should enact a bill that costs the taxpayer nothing and teaches Wall Street needed lessons by making it suffer the consequences of its risky actions. This bill would address the root cause of the financial crisis by focusing narrowly on judicial loan modifications for at-risk homeowners. This focus would stem the tide of foreclosures, thereby resolving the credit crisis, and alleviate the pain of homeowners instead of bailing out rich bankers while leaving homeowners unprotected.

What bothers me about Secretary Paulson's plan is that it focuses on bank bailouts and leaves mortgage foreclosure mitigation as a secondary, discretionary issue. Instead, foreclosure mitigation should be the primary and non-discretionary backbone of the bill, and bank bailouts should not be included at all. Quite frankly, I do not trust Secretary Paulson, or any forthcoming Secretary of the Treasury, to act on behalf of American interests, because he and likely candidates in the next administration, whether Republican or Democrat, have conflicts of interest deriving from their past professional associations. He has too many friends and former associates in whose interests he would be inclined to act. The American public would be derelict of citizenship and its House of Representatives and Senators would be derelict of duty to cede wholesale discretion to a single man who is an insider to the investment banking industry.

Please consult the plan outlined by the Center for Responsible Lending.
This plan notes the problems with the Paulson plan and recommends a simple remedy of empowering homeowners with the recourse of renegotiating their home loans through the judicial system. The current HOPE act is not sufficiently empowering; the Center for Responsible Lending's plan would broaden the powers of the court to force a recalcitrant lending industry to lighten loan terms. It is telling that the industry decried the defeat of an act today that would have enriched it further and relieved it of the consequences of its profiteering actions, but it has been lobbying against giving the courts greater power to act in the interest of homeowners who seek to soften the terms of their loan contracts so that they can avoid foreclosure.

Please DO NOT ACT IN THE INTERESTS OF THE BANKING INDUSTRY MALEFACTORS, BUT DIRECT YOUR BILL TO MITIGATE HOME FORECLOSURES IN THE INTEREST OF HOMEOWNERS, AT NO RISK TO THE TAXPAYER.

Sincerely,

Robert Timothy Elston

John McCain, Have the Decency to Look Someone in the Eye When He is Talking to You.

I thought John McCain did a good job at debating tonight. I sat in the car in the Fred Meyer parking lot and listened to the entire debate on the radio, before I went in and bought my groceries. As I turned off the radio, I thought, Both of these candidates are good, qualified men. I wish they did not come with their parties, or I might even vote for one of them.

I came home and fixed dinner and watched the debate on television, twice. Half-way through the second viewing, it struck me. I did not see John McCain once have the decency to turn his head and look Obama in the eye. For the rest of the debate I watched intently to see whether McCain would pay Obama the respect of human eye contact. All the while, Obama looked regularly at McCain and spoke to McCain directly. McCain so steadfastly did not turn to look at Obama that I can conclude only that McCain refused to look at him. That must have taken some force of will to avoid looking at a man who was speaking to him. That must have taken quite the disrespect.

I have been in situations on occasion when someone has refused to pay me the dignity of eye contact, and I know how it made me feel. It was demeaning and told me that the person to whom I was speaking had no respect for me as a person. It hurt me and felt insulting.

I watched and saw Obama regularly pay John McCain the respect of eye contact throughout the debate, without acknowledgement in return. Obama did not get angry or grow frustrated at the insult of McCain's persistent avoidance. McCain did not once speak to Obama directly, while Obama regularly spoke directly to McCain, as the moderator had requested.

I can tell you this: This behavior by McCain caused me to see him differently than I had ever seen him before. I have respected McCain for many things. And I still do respect him for some things. But I lost a great deal of respect for him tonight. He did a great job at debating substance, but he failed in being a respectful human being. That says a lot to me about how he would deal with people as the President of the United States. And in my book, his persistent refusal to pay the simplest gesture of respect tells me all I need to know about his qualifications be a next door neighbor, let alone the President of the United States.

Sorry, Senator McCain. What you, Sir, don't understand, you could learn from the man whose respect you refused to acknowledge tonight. He looked at you, he called you by name, he spoke respectfully to you. But you refused to look at him. When he becomes President, Senator, watch and learn.

"Redistribution of Wealth" Goes Both Ways

"Redistribution of wealth" is a dirty word to free market theorists. And so it should be -- especially when it signifies vertical redistribution rather than horizontal redistribution. Vertical redistribution occurs when market mechanisms draw wealth from the middle and lower classes increasingly to enrich the wealthy and widen the gap between them and those from whom they draw it. Horizontal redistribution occurs when market mechanisms pull wealth from the top tiers of wealth down to the lower and middle classes. Any shift in ratio in either direction amounts to redistribution, no matter what mechanisms cause that shift to occur.

Traditional economic theory proceeds on the assumption that the actions of government are not market mechanisms. But I argue that within a democracy of any sort -- even a democratic republic -- governmental taxes and regulations are in fact market mechanisms. They are as much part and parcel of the free market as are the actions of corporations and businesses. A free market is constituted within an arena of competing interests. Competitors seek to gain advantage against one another without limit. In a controlled market, competitors who achieve monopoly status are able to control the margin of entry so that new competitors cannot arise. A market that is controlled by monopolies is a controlled market. A free market, in traditional terms, is a market controlled by the most powerful.

Democratically induced governmental regulations and taxes, however, constitute a free market response to monopolistic control. This assumes that the market comprises an unbounded arena of interests and resources. To exclude democratic reaction from the interplay of market forces is to restrict the scope of the market in an effort to control it. Democratic reaction to monopolistic power is a competitor to monopolistic power. To disallow this competitor is to grant monopolies control of the market. A free market, on the other hand, grants the right of conflicting interests to arise freely through politically induced financial mechanisms. Democratic government is a proxy for these conflicting interests. Thus government is a proxy for competitors whose interest it is to weaken monopolistic power. This does not constitute an antithesis to a free market but extends the arena of freedom beyond the arbitrarily restricted boundaries of traditional free market theory.

For this reason traditional free-market rhetoric no longer persuades me. It is the rhetoric of the rich and powerful trying to influence me not to threaten the redistribution of the wealth of the lower and middle classes upwards into their accounts. That rhetoric is a legitimate tactic within a free marketplace, but since to support it is not in my interests or the interests of a balanced, more broadly empowered economy, I will no longer let it influence me as I cast my ballot.

Redistribution of wealth is a dirty word, and it is absolutely profane when it is verticle. That is why I will support mechanisms that move wealth horizontally.

DemocratsForLife.org and Sarah Palin's acceptance speech

A friend sent me a DemocratsForLife.org article entitled "Tiptoeing to the Right on Abortion." It claims a delicate, strategic expansion of the Democratic tent to make allowance for an anti-abortion voice, in order to woo social and religious conservatives who are disenchanted with the Republican Party.

The article gave me pause. Could I join the Democratic Party with its abortion platform, as stated? The catch-22 is that the pro-abortion platform statements are immoral, but being able to change them probably takes Party membership. The Party needs to see a benefit for “tiptoeing to the right,” or else its radicals can claim cost without gain. So unless some of us social conservatives hold our noses and vote for the Democratic ticket, the pro-life cause in the Democratic Party could face a setback. I may not be flexible enough, but I would not necessarily mind seeing others do it, if it meant a moderation of the DNC's radical denial of a fetus's right to life. At least the Democrats' (reluctant) “tiptoeing to the right” stands in stark contrast to the Republicans' boot kicking of the left. (And with "hold our noses" I have in mind the Democratic Party, not the fresh, inspiring Barack Obama.)

One of the DNC platform pro-abortion statements enshrines “a woman's right to choose a safe and legal abortion.” Technically I could support that statement, since no abortion is safe for the fetus and since types of abortion can become regulated or be made illegal. A “safe and legal abortion,” to me, would be no abortion at all. I am for it! But I cannot support the platform's strong endorsement of Roe v. Wade. And since I define the “need for abortions,” which the platform says the Party seeks to reduce, only in terms of medical necessity, I do not see how age-appropriate sex education can reduce it qua need. But reducing the needless choice of abortion is common ground I could support.

Pro-Life Democrats have a point: How do the deaths of unnecessary war weigh against the deaths of unnecessary abortion? How does an unnecessarily high mortality rate due to inaccessible health care weigh against live births into poverty due to derelict social policy? How does concessively tiptoeing toward moderate abortion policy weigh against uncritically marching into strategically motivated warfare?

I heard Governor Palin's acceptance speech tonight. Her (speech writer's) cheap shots at Barack Obama were tit-for-tat to the Democrats’ cheap shots. No imbalance there. What all the commentators I heard missed, though, was that implicit to her anti-Washington-establishment statements was an indictment of Republican corruption. I bet there were some Republican politicians squirming in their seats, hoping to the Red, White, and Blue that it was mere campaign rhetoric. I would love to see Palin get in there and show them otherwise. Unfortunately, she did not indict the abuse of Republican power in her speech, and the talking heads cast it merely as her explicit scapegoating of the media.

To win the election, the cheering Republican power brokers claim that Palin was adequately vetted. But I will be impressed with their cheers if they are still clapping when Bulldog Palin starts kicking their corrupt Republican butts into jail. RepublicansForJailingCorruptRepublicans.org - Now, that is something I could unequivocally support.