Time for a Tax and Mortgage Strike
The calamari salad was world-class. Still, my friend the CPA’s face screwed up. “You know what still has me pissed off? The bailouts. All wasted on CEO bonuses. But nobody cares!”
I told him I thought people cared, but they didn’t know what they could do about it.
“I’ll tell you what we should do,” he fumed. “Stop paying our taxes. And our mortgages. They can’t throw us all in jail! They can’t evict us all!”
What should we demand?
“The bailout money. Make ’em give back every cent to us, the people who need it.”
How would the money from The Mother of All Clawbacks be distributed? Equally? Should people in foreclosure get more? Or those who pay higher taxes? He didn’t know.
So some details need to be worked out. But the point remains: it’s time for a revolt.
The economic collapse began eight months ago, in September 2008. The Bush and Obama Administrations have since racked up $12.2 trillion in commitments and spent $2.5 trillion on bailouts: AIG, Bank of America, Bear Stearns, Citigroup, Morgan Stanley, TARP, purchases of debt and derivatives issued by Fannie Mae and Freddie Mac, discounted overnight lending to banks, purchases of toxic commercial paper, and all manner of other high-flying fiscal shenanigans that you paid for when you could least afford it.
Why didn’t they bail out the homeowners whose mortgages backed the troubled securities that sparked the crisis? Helping them would have been a three-fer: the banks would gotten paid, consumer spending wouldn’t have fallen off a cliff, and government would have restored some of the faith lost after Katrina.
Sadly, the trickle-down approach is easier than a good plan. Issuing checks to a dozen big financial institutions doesn’t require the creation of a new federal agency to analyze requests from millions of distressed homeowners. It’s the same reason lazy presidents support dictatorships abroad instead of democracies: all you need to strike a deal is one handshake. Besides, presidents and cabinet officers spend more time hanging out with bankers and dictators than they do with average citizens.
Trickle-down never works. Consider what happens when parents die. Their will may instruct their children to divvy up the estate equally. In practice, however, the son or daughter assigned as trustee somehow ends up with more than his or her fair share. That happened on a massive scale with the bailouts. Congress wanted banks to loosen credit but didn’t put it in writing. Banks instead used the cash for new mergers and acquisitions, executive bonuses and remodeling their offices.
Well, what would you do if someone gave you $98 billion (Bank of America), no strings attached? You’d keep it for yourself–and maybe a couple of your bestest friends.
Anyway, here we are $12-plus trillion in the hole–$40,000, plus compound interest paid to Chinese and other foreign investors, for every man, woman and child in the United States. That’s more than the national debt was at the beginning of the current mess. What have we got to show for it? Zip.
Unemployment is still soaring. There is no real estate market. The stock market is puttering along at 50 percent of last year’s value. Two million Americans faced foreclosure last year. Eight million more are on the chopping block. The bailouts haven’t done anything to help Americans who have been laid off, subjected to furloughs and pay freezes, seen their retirement benefits fall along with the stock market and been gouged by voracious health insurance costs.
Check out this statistic: according to the Fed, the total net worth of American households fell by $11 trillion last year. That’s almost exactly the amount–$12 trillion–that Bush and Obama spent on bailouts. Think about what that money–$160,000–would have done for the average family of four.
Well, it’s not too late to get back our money. We need it a hell of lot more than AIG.
We should withhold our taxes, mortgage checks and credit card payments until the banks, insurance companies and other assorted Wall Street dirtbags who stole it give it back.
Unrealistic? That’s what my girlfriend thought when I led a rent strike. The landlord hadn’t provided heat, so I organized the tenants in my building to pay their rent into an escrow account until things improved. My girlfriend doubted that everyone would participate. “That’s OK,” I said, “we don’t need everyone.” We didn’t. A 60 percent income drop was enough to get the landlord’s attention. The heat came back on and a judge awarded us several months free rent.
We don’t need everyone either. If millions of Americans were to pay their taxes, mortgages and debt payments into escrow (to show that we’re not deadbeats), it wouldn’t take long before we got some action from Obama and his gang of bank-loving technocrats.
COPYRIGHT 2009 TED RALL
15 Comments.
really liked your article but who would you trust to manage the escrow account
There really is no one that you can trust in this country any more
The banks led us into this mess but also did the greedy ner do wells (spelling) who thought they deserved a mansion and couldn't afford it.
This problem has existed for 40 plus years and it is the baby boomers that are at fault with all of the feel good nonsense.
Personally I will pay my mortgage and other debts as they are my obligation and every one else can just eff off
Ted the Libertarian.
Ted,
In today counterpunch.org, there is an article about the current economic donditions.
It is written by Michael Hudson and
titled "The toll booth economy".
I highly recommend it. Regards.
One crucial difference between the Federal Government, giant financial institutions and your landlord:
Your landlord couldn't get at the money in the escrow account. The IRS would break into the account without missing a beat. The big corporations would do the same with one or two additional pieces of paperwork.
Ted,
This is exactly what the tea party's were about.
The voters in California just shot down 6 propositions that were put forward to bail out the crooks in Sacramento.
I believe John McCain's support of Bush's TARP 1.0 is the prime reason John McCain lost the conservative vote, or what little of it he had. I've since come to regret not supporting Ron Paul.
An Escrow can be run by banking co-operative. For example, north of the border (Im in Canada) here they have Désjardins, a banking co-operative as the sixth largest banking institution in Canada.
Heres to hoping escrow works. Ted lead by example.
Sincerely
Y_S
Michael Hudson
was interviewed by Chuck Mertz (This is Hell! Radio)
on March 14th
2009 archiveseven more highly recommended 😉
This may sound terribly naive, and I apologize if I sound too uninformed, but couldn't we have just used most of the bailout money to develop a national health care plan (single payer system)?
It would help many homeowners avoid going bankrupt, as most people lose their homes from unpaid medical bills; it would have helped the auto industry, as most of their financial problems are due to their inability to balance paying out retirement benefits to too many retired workers without having enough current workers to balance it out; and it would keep a good percentace of corporations from laying off workers. My company pays my salary plus 20% for medical coverage. Imagine the amount of money that would free up for small and large businesses to retain workers, reinvest in new products, and prevent outsourcing jobs. We would be able to cut out the "middle man" insurance industry, thus bringing the overall health care costs down.
Am I misguided? You loyal posters here always seem to be more informed than I, so I would love to hear feedback on this. It seems to me that creating a single payer system could fix a ton of economic problems. And we could have just used the money that was used for the bailout to setup the program.
Ken, I totally agree with you and have similar thoughts on the whole bailout scam. Although, I may be just as naive.
I've left posts here before and have been chided by Aggie for sophmoric ideas and, by others elsewhere, for being too idealistic.
But, I also think that that idea makes way too much sense to work in today's backward thinking society.
to ken
fixing health care in your country would very soon break even and save net money
this is how incredibly inefficient your system is for both people and national budget (as compared to any other developed and even quite a few "developing" countries)
so if there were "political will" there would be a way financially – the present moment would of course be a particular good time to transition as any spending is by definition counter-cyclical now…
therefore let us save the economy by building giant statues of donald trump everywhere – hey, it worked for turkmenistan? (and the easter islands…)
They gave away hundreds of billions of dollars on CEO bonuses? I thought it was like a few percent at most. "All wasted"?!
Ken, the answer is yes. But that's not even discussed on the national agenda….we're too busy arguing about whether evolution is real science, whether global warming exists, and if gay people should have rights……
You are wrong again Aggie. Health care is very much on the national agenda. The only person (here) that keeps bringing up (so to speak) gays, as a tangential topic, is you.
Sorry, I posted as Anonymous and I meant to sign "Fred" so that now I won't be Anonymous.
Ah, yes, the Greatest Heist in History! Actually, I went to O bama's change.gov and said that it would be alot more productive to have a lottery for the homeless. I also said that I watched an Oprah show, where a newspaper gave a homeless guy $100,000. He spent the money on the friends that had helped him throughout his life and visited his family who still didn't like him.
I believe after a year all of the money was gone. He went back to being homeless. What a stimulus! Can you imagine how many people that would've helped through it's travels to get into the banks' pockets? (the theory that money trickles down is ridiculus, someone needs to review his chemistry books – money is light, like helium, it ALWAYS flows upward). Sure beats the CEOs' stuffing their hoard-prone pockets with money, so they can spend it on buying a trip to Mars, when this Heist blows up.
As you know, Obama was not interested in reading all of the posts. As far as I can tell, 99.99% wanted free drugs or more worthless research or free MJ, so maybe it was good that he can't read. I mean, do we REALLY need more drugs in this country? See Havidol.com.
As far as the "health" care, it sure looks like another governmental lie. So far we are mandating "preventative" tests, vaccinations and Statins for our children. Now the government's out of money, so all of the money that we "saved" on Obameconomics will be wasted on more "health" care that no one can afford, because everyone knows that the po' need more mandated drugs (after another wave of small businesses go belly up, because they won't be able to pay for mandated "health" drugs) – oh sorry, I mean "health insurance". And I didn't mean to say "mandated", I meant to say "our patriotic duty as Americans to do drugs and pay our taxes".
-Ralph (the Google Account wouldn't work for me)