Civil Society, Economy & Trade, Financial Crisis, Headlines, North America

ECONOMY-US: National Protests Erupt Over Bailout Plan

Haider Rizvi

NEW YORK, Sep 25 2008 (IPS) - The George W. Bush administration’s plan to spend hundreds of billions of dollars to rescue giant Wall Street firms from their current financial meltdown has unleashed a spontaneous wave of protests across the United States.

Protesters gather Sep. 24 in Seattle against Sen. John McCain and the Wall St. meltdown. Credit: Ttstam/flickr

Protesters gather Sep. 24 in Seattle against Sen. John McCain and the Wall St. meltdown. Credit: Ttstam/flickr

“Cash for trash,” shouted activists who gathered near Wall Street to express their outrage at Bush’s proposal to buy bad debts of financial institutions at the cost of 700 billion dollars of taxpayer money.

Protesters said they want the Congress to protect millions of U.S. citizens who are on the verge of losing their homes due to bad lending practices of creditors instead of doling out public money to big investment firms responsible for ruining the economy.

“People are up in arms about this,” Matt Holland of the, an advocacy group comprising 700,000 members that played a major role in organising the protests, told IPS. “Our members are livid. They’re hitting the streets.”

According to the group, thousands of people in more than 190 cities and towns across the country took part in demonstrations against the corporate bailout bill proposed by U.S. Treasury Secretary Henry Paulson last Friday.

The four-page draft bill, which is currently under discussion on Capitol Hill, did not initially require any legal and financial measures to protect homeowners from possible foreclosures, nor did it put any limits on the salaries of the corporate executives – although legislators say that has since been amended.

On Thursday, Democratic and Republican lawmakers declared they were close to reaching a deal on a modified version of the bill, but still there was no indication if it would pass the Senate and the House.

“While many are focused on providing relief to the Wall Street, millions of homeowners are at risk of being left behind,” said Janet Murgula, president of the National Council of La Raza (NCLR), the nation’s largest Hispanic civil rights group.

To Murgula, “it is irresponsible public policy to ask taxpayers to foot the bill for a Wall Street rescue package while simultaneously denying them a sustainable response to the devastation the rising foreclosures rate is having throughout the country.”

Independent presidential candidate and populist consumer advocate Ralph Nader agrees.

“The public outrage out there is really enormous,” he said in an interview with the left-wing television programme Democracy Now!, calling the Bush proposal “a double standard between the guys at the top and the people who are going to have to pay the bills.”

But President Bush does not think there is anything thing wrong with his proposal.

“I understand there’s a lot of nervousness, and – but the economy is growing, productivity is high, trade’s up,” he said in a televised speech Wednesday. “People are working. It’s not as good as we would like, but – and to the extent that we find weakness, we’ll move.”

To Nader, there is no logic in Bush’s remarks. “I mean, look at all his statements: this could do this, this would do that, farms failing, small business, tada, tada,” he said. “The first question we have to ask as citizens is: why is there a need for a bailout?

“If there is a need for a bailout, why 700 billion dollars?” he asked. “If there is a need for a bailout, what kind of bailout? Taxpayer equity? So the taxpayer can recover if these companies make a profit, they can recover surplus.”

On Thursday, at the invitation of President Bush, both presidential hopefuls Barack Obama and John McCain attended a meeting at the White House to discuss the current financial crisis facing the Wall Street. However, it remains unclear to what extent they agreed on the Paulson bill.

Latest reports from Hill suggest that members of the both political parties on the legislative committee on banking agreed to put limits on the pay of corporate executives, but there was no news about protection for vulnerable low-income homeowners.

While proposals continue to evolve and be debated, according to NCLR, a pro-homeowner package must include a model for the broad, systematic modification of failing mortgages, which is the best way to keep working families in their homes.

“Unless we respond to the needs of millions of struggling homeowners,” said NCLR’s Murgula, “a rising inventory of foreclosed homes will continue to overload the market, pushing housing prices down even further.”

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