Monday, October 06, 2008
Wall Street’s war on Sesame Street
by Larry Geller
The national focus this past week has been on the clash between “Wall Street” and “Main Street”, with Wall Street ultimately emerging victorious. It can be interpreted as a class war waged by the rich, and since victory is defined in monetary terms, they have won.
“Over the last five days, nearly 1,500 people called, faxed or e-mailed my office. Eleven of those expressed support for the bailout plan,” [Rep. Neil] Abercrombie said in describing why he voted against the plan. [Star Bulletin, 9/30/2008]
… Main Street did not persevere.
Main Street has two main weapons: persuasion, in the form of phone calls, faxes, emails, and demonstrations, and the vote. In truth, the first depends on the second, because why listen to the public at all, except that they can vote you out one day?
Wall Street’s weapons are more powerful. They can offer high-paying jobs in the private sphere to cooperative politicians. They can offer legal bribes in the form of campaign contributions, trips, earmarks, and other valuable considerations. They have the power of fear. They have the cooperation of a corrupt administration. In short, they have almost all of the firepower in the class war.
The real losers live on “Sesame Street”—that’s right, our children. They are the collateral damage in this war. They have no weapons, they are non-combatants. Yet despite the best efforts of Main Street to protect them, they will suffer most, now and into the future.
Let’s look first at how the war has been fought, and then at its impact on children.
The big banks and financial institutions were considered too big to let fail, so taxpayer money was co-opted to cover their bad judgment and risk taking, and to make them whole (the “bailout”). The consolidation that has resulted has created even bigger banks. Surely they will never be allowed to fail. They can now practice risk-free capitalism and count on taxpayer money when they need it next time.
When the House voted down the first draft of the bailout bill after massive public outcry (the weapon of “persuasion”), Wall Street and its lobbyists brought out their ultimate WMD: bribery. In effect, they offered to cut politicians in on their victory, give them a share of the bounty they were about to reap (at taxpayer expense, but who are taxpayers anyway…). Politicians got things they could not get otherwise—they became instant winners.
Here’s a list of the bribes, cribbed from an article on an ABC News blog. Now, the The Senate Finance Committee has sprinkled holy water on these and stated that they are not "'earmarks.” That doesn’t make them kosher, though, they are still bribes. As you read these, try and find any connection with the bailout or mortgage foreclosures. There is none, of course, they are pure bribes, for particular politicians, in exchange for their votes on the bailout bill.
* Rum Excise Taxes to Puerto Rico and the Virgin Islands -- Cost: $192 million over 10 years
* American Samoa Economic Development Credit -- Cost: $33 million over 10 years
* Extend and Expand 50% Tax Credit for Certain Expenditures for Maintaining Railroad Tracks -- Cost: $331 million over ten years
* 7-Year Recovery Period for Certain Motorsports Racetrack Property -- Cost: $100 million over 10 years
* The Wool Trust Fund -- Cost: $148 million over ten years
* Special Expensing Rules for Certain Film and Television Productions -- Cost: $81 million over 10 years
* Provisions Related to Film and Television Productions -- Cost: $397 million over ten years
* Excise Tax Exemption for Wooden Practice Arrows Used by Children -- Cost: $2 million over 10 years
* Income Averaging for Exxon Valdez Litigation Amounts -- Cost: $49 million over 10 years
And so Wall Street won the war over Main Street, with superior weaponry. Main Street didn’t have a chance.
Nor did Sesame Street. The bailout bill amounts to a “mortgage” on our children’s future. The predictable next step is to cut social services to pay the cost of this mortgage. Not only did children not get their health insurance (if 9 billion was unaffordable then, it is more so now), but they lose their education when families are evicted from their homes. They lose their chances for a college education as family fortunes are lost and as breadwinners become jobless as a result of this created crisis.
Senator Daniel Akaka wrote (Honolulu Advertiser, Weathering the economy, 10/5/2008) that mortgages are hard to get, businesses are suffering, and Hawaii tourism is down. True. The bailout bill will not solve any of that. Foreclosures are still taking place. Unemployment is growing. As workers lose jobs and health insurance, bankruptcies are on the rise. Children are left out on the street, or their nutrition, health or education suffers.
A downturn in tourism means less tax revenue for the state, and guess what will happen: services for children will be cut.
It’s already happening. Today’s front-page story is Charter schools object to DOE plan to cut $1.9M for coordinators. The coordinators to be cut arrange special education services for students, among other duties. They were put in place as a result of the Felix Consent Decree. Cutting them could put the state at risk of another massive lawsuit. Aside from that, notice that it is the children who are suffering, again.
As you watch the TV news or read about the continuing financial crisis, keep Sesame Street in mind. Growing unemployment reports won’t mention children. A new round of foreclosures likely in 2009 won’t mention children.
Who cares? Wall Street lacks compassion. Our politicians may give children lip service, but they have chosen race tracks and wooden arrows over children's welfare. I’m not holding my breath for any sudden change in their priorities.
We in Hawaii are stuck. We can’t vote out our congressional delegation. They know it. This leaves us without the weapon of the vote, and with it goes the possibility of persuasion.
We need to find new approaches. For the sake of our children.