Sen. Schumer and Rep. Carolyn B. Maloney (14th distr. NY) are critical to restraining bailout

[clear eye]

The Congressional Joint Economic Committee meets on Wednesday to craft the actual bill that will go to Congress for approval. The key players are the co-chairs of the Committee--Sen. Charles Schumer, and Rep. Carolyn Maloney, both of NY. The full Congress (both houses) gets to vote on the bill, but in the current crisis atmosphere, there will be little debate and most likely no amendments offered.

That the expansion of the assets to be bought include just about all defaulted loans the large financial institutions are carrying (see <http://www.bloomberg.com/apps/news?pid=20601087&sid=aYXtwpG9mw9g&refer=home>) indicates that this is not a situational bailout of some institutions, but a bizarre effort to fix the tanking economy by trickle down. All these things--credit cards, student loans, loans in general, are failing because the economy, "Main St.", is failing. Trying to fix it this way will make things immeasurably worse. It will cause extreme devaluation of the dollar, making everyone's savings, especially Baby Boomers who have an entire lifetime of savings, worthless just when this largest demographic is aging out of the shrinking job market. It starts a vicious cycle where the "rescue", while temporarily bailing out investment houses and banks makes the economy worse, so people can't pay back more loans, so more "assets" need rescuing, and so on. In a shockingly short time there will be no way to save the financial institutions, and the money needed for a proper rescue of the economy will be gone.

The only feasible way to rescue the financial system is to do the leanest of rescues while re-regulating, restoring taxation on the ultra-wealthy, corporations, and estates, and providing direct help to the people by job creation including support for the manufacturing sector, which would stem the flow of defaults. This is also the only way to prevent the slashing of vital gov't programs like Social Security and public schooling.

Rep. Maurice Hinchey of NY's 22nd district is also on the committee. Before Wednesday, contact Sen. Schumer, and if you're a member of either of their districts, Rep. Maloney or Rep. Hinchey to let them know what a disaster you think any but the leanest bailout would be for the economy. The key point is that it won't work because it doesn't correct the cause of the epidemic of defaults, but it will succeed in eliminating the money needed to actually rebuild the economy.