Bail Out People Not Bankers

Peter Rothberg in the Nation.

Economists are widely panning Treasury Secretary Hank Paulson's bailout package for lacking appropriate regulatory mechanisms to prevent another future crisis; for not providing homeowner relief; for richly rewarding corporate executives for their failure and for neglecting to provide meaningful oversight over how the aid is distributed.

This whole mess has given lie to the free market and called into question virtually the entire basis of late capitalist economic organization. The Feds are propping up stock prices, directing buyouts, nationalizing private industries and subsidizing crooks and swindlers who already made a killing off the mortgage bubble.

The Fed and Treasury are right to take steps to avert this disaster but the use of taxpayer money to exclusively prop up and reward the rich while the needs of everyone else are written off as too costly is both morally unacceptable and, to quote conservative economist Luigi Zingales of the University of Chicago School of Business, "will undermine the fundamental workings of the capitalist system."