Blog entry

Echoing the Keating Five Message

David Sirota — Mon, 06 Oct 2008 19:10:54 -0400

For the last few weeks, I've been publishing newspaper columns, making television appearances and writing blog posts pointing out that John McCain's formative economic experience was intimidating federal regulators on behalf of banking executive Charles Keating, during the eponymous Keating Five scandal. Many others have been doing the same and now - finally - the Obama campaign is following suit:

Sen. Barack Obama (D-Ill.) on Monday will launch a multimedia campaign to draw attention to the involvement of Sen. John McCain (R-Ariz.) in the “Keating Five” savings-and-loan scandal of 1989-91, which blemished McCain’s public image and set him on his course as a self-styled reformer.

Pushing back against what it calls McCain's "guilt-by-association" tactics, the Obama campaign is e-mailing millions of supporters a link to a website, KeatingEconomics.com, which will have a 13-minute documentary on the scandal beginning at noon Eastern time on Monday.

This is great news. Though the Politico tries to draw an equivalency between talking about McCain's Keating Five record and the GOP trying to liken Obama to a terrorist sympathizer, there is no equivalency at all.

While the attacks on Obama are absurd extrapolations, it is undeniable that McCain was formally rebuked by the Senate Ethics Committee for his involvement in a financial scandal most analagous to today's economic crisis.

While both Obama and McCain bowed down to Wall Street in supporting the recent bailout bill, only one of them - McCain - has displayed a zealous fervor for deregulation, and the Keating Five scandal is about as a good an example of that fervor as there can be.

The progressive movement needs to echo Obama's Keating Five message, because we can expect a lot of media pushback. Just watch this recent clip of me on Fox News to see what I mean:

The media will do whatever it can to pretend McCain wasn't formally rebuked when, in fact, that's part of the historical record. We have to fight through the inevitable media blowback and make sure as many Americans as possible know that record.

Weekend Watchdog

Terrance Heath — Fri, 03 Oct 2008 17:51:54 -0400

It's been a nail-biter of a week, as the nation's attention rocketed between the bailout wranglings on the Hill (Will there or won't there be a bailout package? There is.) and the vice presidential debate (How will the candidates do? Both survived.). But the real question is: Who will be on the Sunday shows, and what questions will the watchdog ask?

For Michigan Governor Jennifer Granholm (CBS, Face the Nation): A lot of the economic news this week impacts your state. The most recent news is that 1 in 5 car dealerships may fail in 2009. That's got to mean that fewer people in your state will have jobs at some point. Meanwhile, the auto industry is set to get a $25 billion loan.

While we're bailing out Wall Street and the auto idustry, are workers in Michigan getting left out of the equation? With the McCain campaign leaving Michigan, what message are conservatives sending to workers like the ones in your state?

For Paul Begala (NBC, Meet the Press):

With the bailout vote behind us — to the tune of $700 million taxpayer dollars — we're now facing the worst jobs report in 5 years. Given the considerable anger over the bailout, and the news that most Americans say they've been harmed by the financial crisis, what will it take to satisfy Americans beyond the bailout?

For Karl Rove (Fox, Fox News Sunday):

All week long, people have blamed regulation and de-regulation for the current economic crisis. What do you make of the New York Times report which blames a 2004 rule change — initiated by the Goldman Sachs head Henry Paulson — that allowed banks to pile up the debts and risks taxpayers are now responsible for?

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Today's Jobs Report: We're Poorly Prepared For the Storm Ahead

Charles McMillion — Fri, 03 Oct 2008 12:36:06 -0400

Today’s Bureau of Labor Statistics jobs report shows jobs losses worsened sharply in September. Hours worked fell even more sharply than jobs suggest losses in October could be quite severe. Because the number of paid hours worked per week was reduced sharply in September, weekly wages also fell even before adjusting for inflation.

This is an ominous sign for households that already face unprecedented financial pressures with little or no current savings.

The report shows net job losses of 159,000 in September including a gain of 9,000 government jobs; the private sector lost 168,000 jobs in September. This is the ninth consecutive monthly loss of total jobs and the 10th consecutive loss of private sector jobs. The economy has lost 760,000 jobs since December; excluding gains in government jobs. The private sector has lost 983,000 jobs (almost 100,000 a month) since last November.

It’s important to appreciate that even the sharp loss of jobs in September represents only a 0.1 percent loss of overall jobs. But because of reduced hours worked per week, the total number of private sector hours worked in September plunged by 0.5 percent. This converted a small gain in wages per hour (before inflation) to a small decline in weekly wages and a big decline in total wages. When BLS reports on prices and real wages in two weeks (Oct. 16) we will likely find that even modest inflation pushed weekly wages down about 0.3 percent in September to purchasing power levels that are down 0.6 percent year over year.

The equally important implication of the sharp reduction in hours worked is that it is the typical pattern employers use before cutting more jobs. For example, machinery manufacturers cut 4,000 jobs, 0.3 percent, in September but they reduced total hours by 2.5 percent. Financial activities cut 17,000 jobs, 0.2 percent, but cut total hours by 0.5 percent. Construction cut 35,000 jobs, 0.5 percent, but total paid hours worked were cut by 1.3 percent. Even education and health services—a category that added 25,000 jobs, up 0.1 percent—cut the number of total paid hours worked by 0.2 percent. Even before considering job losses due to hurricanes, October is shaping up to be a very bad month for jobs and wages.

Along with the now-chronic condition of job losses in virtually every industry that faces imports (or is capable of exporting) or that can be easily be moved to cheaper sites offshore, September shows broad weakening in those industries where soaring debt helped create jobs in the past. Bars and restaurants lost 5,000 jobs in September, private health care and education bureaucracies added only 25,000 jobs. Even local governments began to show the budget strains as their jobs cuts outside public education all but offset small gains in their education bureaucracies. (My full table of industry job losses and gains is attached.)

Those on Wall Street and elsewhere, who have just discovered the weak economy, may also find of interest my updated industry jobs table since January 2001. The past 7 2/3 years has seen only 3.14 million, 2.8 percent, more private sector jobs. This is the weakest overall job growth of any such period since the 1930s. But even worse than the weakness in overall job growth is the remarkable distribution along the lines noted above. Private Health Care bureaucracies added 2.4 million jobs since January 2001 and bars and restaurants added another 1.5 million jobs for a combined 3.9 million. Aside from these, the U.S. private sector has lost over 750,000 jobs in the past seven-and-two-thirds years.

These graphs on job losses and charts on industry job performance show that even over the 82 months since the end of the previous recession in November 2001, the private sector has added just 5.8 percent to total hours worked. This is not only the weakest on record but is less than one-third of the 17.8 percent average growth in past cycles. Hours worked in manufacturing over the past 82 months has plummeted by an unprecedented 12.8 percent.

Today’s report provides more evidence of just how poorly is the economy prepared to weather the current storms that Wall Street’s wealthy geniuses have created.

Cox And The Right Set Up Wall Street's Fall

Isaiah J. Poole — Fri, 03 Oct 2008 11:58:33 -0400

In 2005, our co-director Robert Borosage warned readers about the travesty of appointing Christopher Cox to the Securities and Exchange Commission.

Business Week described corporate lobbyists as "almost giddy" at the prospect of Cox at the head of the SEC because Cox has devoted his career to shielding corporate executives from accountability. As an attorney, Cox was sued for touting a flimflam operator to regulators in a scam that ended up bilking small investors of some $130 million. As a legislator, Cox spearheaded the effort to pass the Private Securities Litigation Reform Act of 1995, which essentially gave corporate executives a "license to lie" about their stocks' future prospects and sought to shield CEOs, their lawyers and accountants from investor lawsuits. Cox also championed leaving stock options off the corporate books, encouraging the very instrument that gave CEOs a personal stake in fixing the books so they could cash in. President Bush has made a man who contributed directly to the explosion of corporate fraud and abuse that cost investors trillions of dollars the chief cop on the corporate beat. With the heat turned down on corporate cons, small investors are likely to get burned.

An article in The New York Times on Friday details how one rule changed in the mold of Cox's doctrinaire deregulatory mindset helped set up the collapse on Wall Street we're now dealing with. That rule, pushed by lobbyists from the nation's largest investment firms, allowed them in 2004 to add billions of dollars of debt to their books without the reserves to cover them. Then, it allowed the firms to police their own risk, using complex computer models.

The coup dé grace took place after Cox arrived at the SEC a year later, when he failed to give a high priority to an office tasked with monitoring institutions with $4 trillion in assets.

"Since March 2007, the office has not had a director," the Times reported. "And as of last month, the office had not completed a single inspection since it was reshuffled by Mr. Cox more than a year and a half ago."

It is reminiscent of the failures of the Consumer Product Safety Commission, which since 2000 embraced the right-wing ideology of minimal regulation, voluntary compliance and no serious commitment to having cops on the beat to protect the public interest. The failures at the CPSC led to tainted food and toxic toys. The failures at the SEC, as everyone now knows, has brought up to the precipice of a potentially far more wide-reaching collapse of the economy.

It is a devastating indictment of anti-government, corporation-worshiping conservatism.

The Times quotes a former Republican SEC chairman (italics mine):

“It’s a fair criticism of the Bush administration that regulators have relied on many voluntary regulatory programs,” said Roderick M. Hills, a Republican who was chairman of the S.E.C. under President Gerald R. Ford. “The problem with such voluntary programs is that, as we’ve seen throughout history, they often don’t work.”

A long-time professor of securities and corporate law admits in the Times that his faith in the policies that the conservative leadership of the SEC was pursuing were wrong.

“We foolishly believed that the firms had a strong culture of self-preservation and responsibility and would have the discipline not to be excessively borrowing,” said Professor James D. Cox, an expert on securities law and accounting at Duke School of Law (and no relationship to Christopher Cox).

“Letting the firms police themselves made sense to me because I didn’t think the S.E.C. had the staff and wherewithal to impose its own standards and I foolishly thought the market would impose its own self-discipline. We’ve all learned a terrible lesson,” he added.

The paper also notes Cox's background and his track record at the SEC:

Christopher Cox had been a close ally of business groups in his 17 years as a House member from one of the most conservative districts in Southern California. Mr. Cox had led the effort to rewrite securities laws to make investor lawsuits harder to file. He also fought against accounting rules that would give less favorable treatment to executive stock options.

Under Mr. Cox, the commission responded to complaints by some businesses by making it more difficult for the enforcement staff to investigate and bring cases against companies. The commission has repeatedly reversed or reduced proposed settlements that companies had tentatively agreed upon. While the number of enforcement cases has risen, the number of cases involving significant players or large amounts of money has declined.

Mr. Cox dismantled a risk management office created by Mr. Donaldson that was assigned to watch for future problems. While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency.

In the process, Mr. Cox has surrounded himself with conservative lawyers, economists and accountants who, before the market turmoil of recent months, had embraced a far more limited vision for the commission than many of his predecessors.

Marge Hurd, president of ACORN, said that the New York Times story should help put to rest the libel that the Wall Street implosion was caused by laws intended to ensure people of color and people in lower-income neighborhoods had fair access to credit.

"For the last few weeks, Americans have been deluged with polemics from right-wing pundits blaming regulation enacted in 1977 for the financial crisis we find ourselves in today. As today's explosive New York Times article shows, however, the 2004 decision of the Securities and Exchange Commission to eliminate the capital requirements on the major investment houses played the pivotal role in exposing our entire economy to the enormous risk of over-leveraged debt on predatory loans. ... As today's revelations demonstrate, a new era of re-regulation and close scrutiny is urgently needed, especially as American taxpayers prepare to foot the bill for Wall Street's misdeeds while getting no help to escape predatory mortgages."

When Sen. John McCain sought to score political points by saying that he would fire Cox if he were president—notwithstanding that the president can't legally fire an SEC chairman over policy disagreements—Rep. Barney Frank, the chairman of the House Financial Services Committee, correctly noted that the root problem was not Cox and his competence as an administrator. In fact, Cox did exactly what he was sent to the SEC to do: to take the chains off the dogs of Wall Street and let them run wild. Once again, it's not the man, it's the plan.

Now even many of the advocates of deregulation are now admitting that we have gone way too far. The question we must confront now is whether to trust the apparent deathbed conversions of those who now say that will curb the greed of Wall Street or will we now turn to those who we know were right all along.

Mad Money

Terrance Heath — Fri, 03 Oct 2008 11:50:57 -0400

I have a confession to make. I've been trying to grasp the ~~national~~ global economic situation. I even constructed a (popular and recently updated) timeline. But I didn't feel I could make any sense of it, Because, no matter how many times I've had it explained to me, it sounded like a bunch of people playing games with Monopoly Money; or some "worthless" paper (a phrase I've heard a lot in the past week. That is, until I saw this handy video from The Guardian confirmed my worse fears.

During these last several months I've had to learn phrases like "debt securities " and wrap my brain around concepts like "credit swaps." Just when I think I've got a handle on it, I find myself thinking , "No, it can't' be that. Surely not everyone would fail to see what was wrong with what going on. Someone must have known that it couldn't go on; that it was unsustainable, because nothing in the system had any real value." )

It all sounds like a pyramid scheme or a ponzi scheme — one with the top 1.5% or so of the population at the top and the rest of us closer the bottom

COLUMN: Bailout Is Capitalism Murdering Democracy

David Sirota — Fri, 03 Oct 2008 11:15:47 -0400

The United States has always struggled to balance its capitalist economy with its democratic ideals. We've spent the last many years telling ourselves that the two go hand in hand, only to watch capitalism thrive in China in the absence of democratic freedoms. Indeed, if there's been any lesson the last few years, it is that authoritarian capitalism - rather than democratic capitalism - may be the dominant ideology of the 21st century. And as I write in my newspaper column this week, that ideology may be coming to America.

The Wall Street bailout bill is a lot of things - a giveaway, a heist, a legislative manifestation of crony corruption. But it's structure is pure authoritarian capitalism. Whether you think handing over $700 billion to speculators will help our economy or not (and many economists believe it will hurt it), it is undeniable that this bill vests authoritarian power in the hands of the Treasury Secretary - and that is a radical departure from the fundamental tenets of our democracy.

What has differentiated America from other countries is our reliance on institutions rather than individuals. When we have faced crises, we have built institutions (think about the alphabet soup agencies out of the New Deal), not czars. That's what democracies do - they build nations of laws and institutions, not cults of personality.

This is clearly changing now. We saw Paul Bremer appointed monarch of Iraq after the invasion and we see Congress about to hand over its power of the purse to Henry Paulson so that he can be the financial despot, free to buy and sell whatever securities he feels like, with almost no oversight.

Perhaps this reflects a wider trend. We have become a country that has one national religion: presidentialism. That's the religion that says the president is an all-powerful deity - and the Oval Office is a position that is the only one that matters. That this outlook is fundamentally undemocratic and offensive to the principles of our Founding Fathers seems completely forgotten. We have embraced czarism with the zeal of cult worshipers - and now this zeal has global economic forces at its back.

We are trying to economically compete with anti-democratic forces that can make financial decisions without any public input at all. As we saw with the debate over the bailout bill, the transnational corporate elite tell us our democracy and its careful deliberations are hurting our ability to make quick decisions in this global market - and therefore that democracy must be subverted to the will of capitalism. Thus, a bill is rushed through Congress in a week that hands 5 percent of our entire economy to one man, Hank Paulson.

What will be the effect of this tectonic shift? It's hard to say, but with both parties endorsing the shift, we have to first and foremost realize that it is real. Capitalism is trying to euthanize democracy in the name of economic competitiveness - and that is going to make this country a very different - and in my opinion, a much scarier - one from what it once was.

You can read the full column here.

The column relies on grassroots support, so if you'd like to see my column regularly in your local paper, use this directory to find the contact info for your local editorial page editors. Get get in touch with them and point them to my Creators Syndicate site. Thanks, as always, for your ongoing readership and help contacting local editors. This column couldn't be what it is without your help.

Meltdown Timeline, Updated

Terrance Heath — Fri, 03 Oct 2008 10:00:00 -0400

Yikes! I realized that the Meltdown 2008 timeline needed updating, with all that's gone on this week. And when I logged in to add new events I discovered my timeline was featured on the front page, among the "Trending Topics - Making a Splash"! (The screenshot below is for posterity's sake, since I don't know how long it will stay up there.)

I've updated the timeline with new events, and now (now that I know people are actually checking it out) automated it to update from the RSS feed for our economy-related news clips.

Why do I get the feeling I may have started something here...?

From Democracy to Crazy-ocracy...And Back Again?

David Sirota — Thu, 02 Oct 2008 18:09:36 -0400

cra·zy (adjective)

1. mentally deranged; demented; insane
2. senseless; impractical; totally unsound

Over the last few days, I've explored a number of explanations as to why Congress seems determined to pass a wildly unpopular Wall Street giveaway at a time of exploding budget deficits, and at a time when so many credible experts say the giveaway doesn't address our fundamental economic problems. Yesterday I took to CNN to analyze some of these explanations (video clip here).

Look, we know that forces of corruption are looking to profit off such a bailout, we know that fearmongering about a second Great Depression is supercharging the situation. We know that both parties have helped create this crisis - whether it was John McCain championing regressive economic policies, or Bill Clinton bragging in 1994 that "we have deregulated banking." We also know that the elite punditocracy - as it did in pushing the Iraq War - is reliably repeating, and refusing to question, what its ruling class sources are telling it.

As I will show in my newspaper column tomorrow, if the bill passes, it will represent the triumph of capitalism over our basic democratic ideals. But, for a moment, let's ponder one other possible explanation for why Congress is even considering this bill.

Is it possible America has become a Crazy-ocracy? That is, is it possible we aren't ruled by merely the stupid (an Idiocracy) or the corrupt (a Kleptocracy) - we are ruled by genuinely insane people?

I don't mean this as a flippant joke - I'm dead serious about this, as is former Bush Treasury Secretary Paul O'Neill today.As Bloomberg News reports, O'Neill said the $700 billion Paulson plan is "crazy" with potentially "awful" consequences for the economy. "Doesn't this seem like lunacy to you?" he asked.

Well, yes - actually it does, and not just to me, but to many of the nation's leading economists, financial analysts, business journalists, and investors. Many of these people say this bailout could actually make this situation far worse, and many of them also have terrific, commonsense, and historically proven ideas about how to structure an economic rescue package (the newest one is from The Nation's William Greider). Indeed, most bailout proponents (like Paul Krugman) acknowledge this plan will likely be unsuccessful and that the public advocates for it haven't explained how it will work. Yet, many of those proponents - especially those in Congress - say they support it anyway because of the ultimate ideology of the truly psychotic: Namely, that somebody has to do something, no matter what that something is. They are pulling the classic move we saw during the lead-up to the Iraq War - officially supporting it, but also giving speeches of skepticism so they can cover their asses with "I told you so" haughtiness in the future (and please, don't even try to justify this bill as a respectable bargain - spending 5 percent of our entire economy - $700 billion - in exchange for a few admirable renewable energy tax credits is not a good deal...I've heard of thinking minimally, but that's thinking microscopically).

And yet, the political system seems totally immune - even hostile to - basic sanity. O'Neill and Joseph Stiglitz, both bailout critics, are top advisers to Barack Obama on this bailout issue, but the Democratic nominee keeps insisting that it is unpatriotic to oppose this bill. John McCain is even crazier - saying that the bill is going to "put us on the brink of economic disaster" right after he voted for it. And worst of all, both Obama and McCain are insisting that the bill just hasn't been sold properly as a "rescue" instead of a "bailout" - the implication being that public opposition is borne out of stupidity rather than sanity.

O'Neill says part of the problem is that those running the asylum in the media and in the halls of Congress have little direct contact with the sane world. "I honestly don't think they really understand it and they're so much in a bubble that it's impossible to penetrate it," he said.

So as the House prepares to vote Friday on this bailout, the public has to burst through that bubble. Republican Sen. Bob Bennett (R) - a bailout supporter - has already inadvertently given us our marching orders. On MSNBC this week, he said the determining factor in whether this bill passes the House will be phone calls to House members' offices. So it's time to sign this CAF anti-bailout petition and then get on the phone to your Member of Congress and tell them loud and clear: America is a Democracy, not a Crazy-ocracy, and that means rejecting this bailout bill once and for all.

The Bribe So Far: $151 Billion

Isaiah J. Poole — Thu, 02 Oct 2008 11:58:07 -0400

In the unsanitary sausage kitchen that is Congress, the bailout bill that the Senate approved Wednesday night is particularly ugly and smelly.

Must vote-buying be so shameless in the midst of a serious financial crisis?

We've focused a lot on what this bailout bill does not do. It will not fund critical infrastructure projects that are needed now more than ever for the jobs that will be produced in the process. It will not help state and local governments cope with dwindling tax revenues. It offers nothing to retirees who by no fault of their own will see their standard of living lowered by losses on Wall Street. And it punts on the serious reforms needed to keep this mess from happening again.

But it will, on page 290 of what started out as a three-page proposal, give a motorsports racing track operator an additional two years to enjoy a tax write-down.

That's just one of the $150.6 billion in tax provisions that were added to the Senate bill in the hopes that lawmakers in the House, mostly Republicans, will hold their nose and vote for the bill.

It also has the effect of expanding the number of interest groups that have a stake in pushing for this bill's passage. Sadly, that includes some progressives, who, as Congressional Quarterly reports, have some of their concerns taken care of.

Our members were supportive [of the bailout bill], but it wasn’t really our focus. It is now,” said Greg Wetstone, senior director of governmental and public affairs at the American Wind Energy Association, which is trying to get the key tax credit for wind energy extended beyond Dec. 31.

The Senate’s tax bill, which passed, 93-2, on Sept. 23, would provide incentives for renewable energy production and conservation, “patch” the alternative minimum tax (AMT) for 2008, extend expiring tax incentives through 2009 and help victims of natural disasters. It is partially offset with revenue increases that would hit the oil and gas industry and hedge-fund managers.

Senate Finance Committee members assembled the tax bill carefully, to break a months-long logjam. They sprinkled it with targeted provisions: a child tax credit expansion for liberal Democrats, new coal tax breaks for Midwestern senators, extra help for Midwest flood victims and Gulf Coast hurricane victims, benefits for Alaskan fishermen, and beefed-up incentives for domestic film production.

Not to mention the elimination of a 39-cent excise tax on wooden arrows for children, a measure designed to benefit Rose City Archery, an Oregon firm, according to Bloomberg, which has looked at that and several other tax provisions in the bill.

The same story quotes a spokesman for House Minority Leader John Boehner as saying the inclusion of the tax breaks "will increase the appeal of the package for our members.''

Whatever the merits of these tax measures—and you can be sure that the merits of many of these provisions are highly questionable and exist only at the behest of lobbyists or lawmakers pandering for votes—they certainly make a mockery of all the protestations of not turning the economic rescue effort into a "Christmas tree" of special-interest provisions. As it turns out, the "Christmas tree" concern only applies to provisions that would, for example, fund community organizations that have a track record of helping homeowners avoid foreclosure. You know, things that would help ordinary people directly affected by the financial crisis.

Ian Welsh at FireDogLake put it this way: "This isn't even closing the barn door once the horses are all out; this is buying new horses and deliberately leaving the barn door open. Bottom line: a bad bill which has been larded up with various legislators' pet bills to get the votes necessary to pass."

It's enough to make you want to take a stack of wooden arrows to Capitol Hill and shoot them off in protest.

This Bailout Is Still A Bad Deal

Robert Borosage — Thu, 02 Oct 2008 10:29:53 -0400

The Senate voted overwhelmingly to pass a bad bailout bill last night. Nothing to kick-start the real economy, except tax breaks for business. No help for homeowners.. No mandate for taxpayers to get shares in the banks that are bailed out. Virtual unchecked discretion for the Treasury Secretary to dispense $700 billion. It’s a good morning to be one of Hank Paulson’s friends on Wall Street.

Faced with an angry revolt of Americans opposed to bailing out the folks who got us in this mess, Congress decided to call in reinforcements—the banking and business lobby. Add in business tax credits, increase FDIC guarantees to appeal to small business and small banks, and call out the contributors.

And, of course, fan hysteria to frighten the public: “We must act to keep the banks working or mortgages will dry up, credit cards will be shut down, small businesses won’t be able to operate.”

There are two major problems with this argument.

First, the need to pass something does not require passing something lousy. Backed by most sensible economists, George Soros called for legislation that would provide sound banks with capital, give taxpayers a preferred equity position and sort out the banks that can be saved from those that should be closed. Paulson’s stated plan of purchasing some of the toxic trash from the banks is likely to be more costly and less effective.

Second, while keeping finance going is necessary to a growing economy, it is not sufficient. We’re headed into a severe downturn. Consumers, no longer able to tap the value of their homes to add to stagnant wages, are tightening their belts. States and localities face sharp cuts. The coming recession will weaken the banks further with rising defaults on credit cards, auto and consumer loans. You can’t save a ship by bailing out the master’s quarters when the hull is taking on water.

Now the business and banking lobbies turns their attention to House members, needing a dozen more Republican votes to support the bad plan of a failed administration in its final days. Americans have one day to let Congress know that while action is needed, this bailout is unacceptable.

But unless there is an unprecedented public uprising, this lemon is likely to pass. And the real work of getting our economy back on track will be left to the next president and the next Congress.