From This Can’t Be Happening
By Dave Lindorff

The grassroots rebellion that led to the House’s rejection of the Bush Administration’s Wall Street bailout bill on Monday flamed out on Friday, overwhelmed by a massive lobbying campaign by Wall Street and by a propaganda push in the corporate media in favor of passage.

The House, which had voted 228 to 205 against a bailout at the beginning of the week, voted 283-171 in favor of an even more expensive plan only four days later, after the Senate passed a bill containing over $100 billion in tax breaks (mostly for the wealthy), and after House leaders added a bunch of those infamous “earmarks” to buy the votes of reluctant House members. (Sen. John McCain, who has vowed as president to veto any bill containing earmarks, voted for this whopper of a bill, earmarks galore and all.)

Interestingly, one of the things that was used to frighten members of Congress into passing this unprecedented bill was a swooning stock market, which plunged into record low territory for the year on Monday and Thursday. Yet after rising modestly during the morning, reportedly on “anticipation” that Congress would pass a bailout, once the vote was in, the equities markets all started heading south and hitting record lows for the year–even lower than they’d gone on Tuesday after the initial House vote against the bailout. Clearly investors weren’t particularly optimistic that throwing almost $1 trillion in borrowed money from taxpayers at banks and investment houses would do much for the nation’s struggling “real” economy. (Why is it that conservatives who love to say that “throwing money” at problems won’t work when those problems involve the lives of poor and working people, but they seem to think that throwing money at rich people and rich corporations will “work”?)

One reason for investor pessimism is no doubt news that car sales and housing prices in September slumped to record lows, and that the September jump in unemployment was the highest since the 9/11 crisis in 2001. Another was probably the inclusion of a provision in the bill as passed by both House and Senate that allows the Treasury to buy bad debt not just from US banks, but from foreign banks as well. As several critics of the plan have observed (but as the corporate media have failed to report, to their undying shame), this means that American tax dollars will be flowing out of the country to shore up the balance sheets of foreign institutions, in the name of keeping overseas investors in the market for US treasury securities.

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