10-01-08, 9:30 am

Monday saw the collapse of the second, minimally-revised bailout package in the House of Representatives. There was tremendous pressure exerted by George W. Bush in a shock-and-awe doomsday scenario reminiscent of the run-up to the Iraq War, but in a telling sign of the severely weakened state of his presidency, the Bush-Paulson plan to pump money into Wall Street flopped on Capitol Hill.

Another equally embarrassing failure was the McCain-as-Teddy-Roosevelt boast blared across the airwaves by his campaign, which prematurely claimed that McCain had single-handedly brokered a bipartisan deal in Congress. 'Leadership' is what McCain called it just before the deal fell apart.

Equally false were the claims that Citizen McCain had “suspended his campaign” to tend to the people’s business in Washington. In reality, the McCain campaign, under the opportunistic guise of bipartisanship, was proceeding at full gallop, with no let up in either political grandstanding or McCain’s trademark boasting. McCain’s deluded claim that he brokered a deal even surpasses his chief economic advisor’s boast that the computer-illiterate McCain fathered the Blackberry. Now all he deserves from the American people is a big raspberry.

In the end, the bailout plan that was defeated was a bad deal. There is no question that the current instability in the financial markets and the severe credit crunch signal a huge crisis of capitalism. Because of the intensity of the crisis, measures need to be quickly taken to prevent the immense harm to working families that is looming, an additional threat that will intensify the already desperate economic situation faced by millions of Main Street Americans: massive layoffs, insecure retirement savings, huge budget shortfalls in populous states like New York that threaten to hit working families hardest, a deepening of the already severe housing crisis, and a general economic slowdown – if not outright collapse – that will affect every community in the nation.

With the present bailout plan, thousands of Wall Street money managers – who are basically partners in crime – will scarcely be buffeted by the economic crisis, as they gently waft to earth in their golden parachutes. However, the consequences of Wall Street’s predatory rampage are just beginning to hit home for the thousands of American working people who are losing their jobs, their futures, and their dreamed-of homes.

Economist Joseph Stiglitz, in a recent article for The Nation, estimates that even with a new injection of $700 billion (on top of the hundreds of billions already pumped by the Feds into the credit markets), the taxpayers will still be stuck with tons of bad bad debt, while Wall Street will keep on gaming the same rigged system to ensure they continue to maximize their profits.

But that is precisely what the Bush bailout was designed to do. It would allow Wall Street, which has benefited from three decades of deregulation to continue on its unregulated way. Starting with Reagan and culminating with Bush, virtually every rule governing fair lending and rampant market speculation has been ignored.

John McCain wants more of the same. In addition to 26 years of promoting and voting for deregulation, he named mortgage lobbyist Rick Davis as his campaign manager. Since 2000, Davis has to help Freddie Mac and Fannie Mae. Both of these failed institutions have been placed in federal (i.e. taxpayer) custody and are at the heart of the subprime mortgage collapse. Davis’s job as lobbyist/campaign manager was to facilitate the lending giants' ability to continue to spurn all government regulations meant to prevent predatory lending.

This record of sleaze and insider deals is reflected in McCain's views on a bailout. In their alternative bailout proposal, McCain and the congressional Republicans have demanded more tax breaks for the very people who caused the problem in the first place. There is no doubt that a McCain presidency would offer, as Barack Obama says, more of the same “trickle up” economics for the wealthy and a lot more “trickle down” pain for the rest of us.

Should the Wall Street players, Washington lobbyists, and their political arm in the Republican Party now get away with blackmailing taxpaying working families with their demands for a no-strings-attached bailout? The answer is no!

Here are some alternatives to the present plan. One basic measure that would more directly address the problem of liquidity by erasing bad debt would be to put an immediate moratorium on home foreclosures. Homeowners should be allowed to renegotiate their mortgage debts, make their payments in a reasonable manner, and keep a roof over their heads this winter. Such a move would stabilize all of those bad mortgage-backed securities Wall Street bankers are holding – even if the profit margin would be lower – and now want to pawn off on the cheap to the US government.

Another good place to invest our money is in the urgently needed creation of new jobs by repairing our deteriorating public infrastructure – roads, bridges, railways, schools – along with alternative energy investments that will create millions of green jobs, and a second economic stimulus package that will put cash in the hands of working families.

Before passing a $700 billion bailout package for Wall Street, let's spend a fraction of that boosting Main Street.

Progressive and labor organizations, who represent the side of justice and fairness in this debate, have emphasized that no bailout plan should pass that does not include a meaningful economic stimulus package, one that specifically addresses the needs of homeowners and creates jobs. In a statement, AFL-CIO head John Sweeney rejected the weakened regulatory measures offered in the failed bailout package and said, 'we call on Congress to pass an economic stimulus package this week for Main Street, together with bankruptcy reform to help homeowners.'

With our economic system in crisis, demands for meeting the needs of distressed homeowners and job seekers is no longer just the fair way to go, it is a vital necessity. We as a country need to address the crisis at its origin. We need to stop the foreclosures, help homeowners find a way to pay their bills without taking their homes, and stop rushing to put more taxpayer money into the pockets of Wall Street millionaires.