Friday, July 31, 2009

Moolah for the Masses


The Cash for Clunkers economic stimulus program -- just about the only "bailout" program aimed directly at helping the average citizen -- has worked so well it has run out of money in less than ten days. Only $1 billion was allocated by Congress. The program started July 24 and today it's all gone.

Meanwhile, $12.2 trillion dollars have been allocated by the Bush and Obama administrations to Wall Street banks. A hell of a lot of that went into million-dollar bonuses for the wealthy yahoos who put us on the brink of ruin in the first place. The banks spent tens of millions more on lobbyists hired to buy more congressmen so federal regulations won't be toughened to protect consumers. And, still, no one is lending much.

We've been told from the beginning that this is the most severe recession since the Great Depression. As we see it, the main difference in the government's response, then and now, is this: FDR's New Deal program was designed mainly to help the little guy get on his feet. George Bush's program, which Obama has left essentially in place, was aimed at helping the rich get richer.

There is a good side to all of this. When Economics graduate students of the next generation start looking around for a dissertation topic, maybe they can compare the effectiveness of stimulus programs directly aimed at average Americans versus stimulus programs that shovel buckets of money into the pockets of Wall Street bankers and lobbyists.

"Which was more effective in helping the economy?"
might be the subtitle, if future economists can write clearly. What do you think the answer will be?

7-31 pm

The good news update: This morning, the Obama administration persuaded one-half of Congress to add $2 billion to the "Cash for Clunkers" program. The House of Representatives vote was 316-109. We'll get you the names of those 109 Wall Street buddies as soon as we can.

The bad news downbeat: In the U.S. Senate, which hasn't acted yet, Democrats are likely to seek a "bipartisan" solution to the surprise exhaustion of stimulus money for average Americans. If they follow the pattern established by health reform legislation, Sen. Max Baucus (D-Mont.) will turn the whole thing over to three right-wing Republicans so they can hand it all over directly to the auto insurance industry.

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