The faucet is home mortgage foreclosures. The leaky pipes are credit swaps that were illegal until Phil Gramm's deregulation laws took effect. And the flood is what the bailout advocates want to bail out -- while leaving all the faucets running. It is utter incompetence by some. For the rest, it is a scam. If Roto Rooter did this in a home flood, you would sue and win. (This kinda happened to me last week! - see below.)
But don't just trust me on this. Listen to the pros:
Robert Johnson, former chief economist of the Senate Banking Committee;
Bruce Marks, founder and CEO of NACA, the Neighborhood Assistance Corporation of America - who predicted this crisis years ago, in detail.
It's not that complicated. If $200B was invested in preventing 2 million foreclosures, the economy would be stabilized by rescuing $1 trillion in 'bad' debt. But we're being distracted like a bull in the ring from any proposal to turn off the faucets.
And it's actually unmitigated, bipartisan contempt for homeowners in need. The banks and the Congress would rather tank the economy than let those people keep their homes and pay just 5%.
Robert Johnson's reasonable plan is to spend $500B cleaning up the flood, $200B shutting off the faucets, and more to restructure financial institutions the way Warren Buffet does when he invests billions in a floundering enterprise.
Bruce Marks points out that it can be done far cheaper. Once you've committed to shutting off the faucets - surprise! - confidence increases and The Market gets serious about cleaning up the flood themselves. But Johnson is worried that could take too much time. They're both right.
Bruce Marks is especially right when he says, if we have Democratic leaders, they'll be all over this like the Clinton campaign was 16 years ago with "It's the Economy, Stupid!" They'd stop this horrible, cynical bailout bill. Listen to him and Robert Johnson on that Democracy Now link.
Today the winning phrase would be "It's the Foreclosures, Stupid!"
Congress is on a path not to do either workable solution -- to just keep bailing and ignoring the source of the flood, and spend $700B of our money doing it - in this round.
This happened just last week in a flood disaster at my house!!
Tenants were dutifully cleaning up inches of water from a 40 gallon water heater that burst. Why the hell was it taking so long? Why was there still so much water? It was way too many hours before anyone realized water was still flowing into and out of the heater unit. The plumber, the tenants, all blind. The next day the insurance guy called the owner to say the cleanup people who were on their way couldn't start until the water stopped flowing, and the plumber was brought back. It was a burst heater AND a bad valve. Many times more damage than ever needed to happen. Thank you, insurance company, for helping to rescue the homeowner.
In the same week, I get to see the same thing is happening to the US economy! But so far, no such luck getting wise help from those in charge.
Tonight's votes in Congress are the plumbers coming back a second time tellling us to keep bailing, and still not agreeing to fix the leak! And we're tenants watching the water level rise, incredulous that the plumbers don't have a clue what to do.
The experts who know exactly what to do include Robert Johnson and Bruce Marks - but of course you'll only see them on Democracy Now!. The candidates are oblivious to the faucets or the solutions that could work.
But they're not just incompetent. They know where the leak is.
They kind of despise the people who would benefit most from fixing it.
How I wish heroic Ted Kennedy was strong enough to tell it like it is, the way he did with the Minimum Wage bill - remember?: "What is it that you so despise about working people that you would insist the poorest of them should get less and less for their work for almost 10 years..." (a paraphrase)
Only now we're talking about bipartisan contempt:
Contempt for Homeowners
Contempt for the Middle Class
Contempt for People of Color
Contempt for folks so undeserving, rather than let them pay 5% instead of 11% the banks want to charge, they should lose their homes. The banks would rather stop making loans than shrink the profits they planned to make on those people. Getting a better deal than any homeowner is how they make their living - it's in their DNA.
That's why preventing foreclosures is off the table - although Hillary Clinton pointed out back in December that this crisis could be averted if a moratorium on foreclosures was begun!
Most people know intuitively that this bail out is a scam and the leak isn't being fixed. They hate the bill. Both parties and both candidates are trying to push it through anyway. Stand up to them! Call your Senators and Congressmen. And call Obama too - don't let him do another FISA type "compromise" just because we love him. This unchecked flood damage will be much harder to repair.
This is the biggest rip off of my lifetime.
Make sure your "representatives" and everyone else you know has heard the phrase:
"It's the Foreclosures, Stupid"