Warehouse G


Grab Your Pitchforks – The Economic Backlash Is Building

By James Donahue

Even as Washington lawmakers struggled to push through needed legislation that may or may not put the brakes on the economic meltdown, the first signs of public outrage were being seen in Connecticut and New Hampshire.

In Connecticut, hundreds of people threatened with bank foreclosure of their homes showed up in front of the homes of wealthy bank and finance company CEOs along the so-called Gold Coast to give speeches, bang drums and pans, and give those “financial kingpins” a demonstration of their anger.

And in New Hampshire, the state legislature has introduced legislation declaring certain actions by the federal government to be a “breach of peace” with the states that risks “nullifying the Constitution.” The act suggests that states may attempt to strip the central government of its power . . . an issue that was the focal point of the Civil War.

In late September, back when former Treasury Secretary Hank Paulson was pressing legislators to pour a massive multi-billion dollar “bailout” into the pockets of Wall Street executives a single journalist used the Internet to spark a strange protest in downtown Manhattan. People came from all over to drop off personal junk that they thought was worth as much as the “junk financial instruments” the government was proposing to buy from the troubled banks. They piled it around the well known statue of the charging bull.

The people were angry enough to do that in September. Imagine the pent-up anger bubbling across the landscape this winter as more and more people lose their jobs, more and more businesses shutter their doors and windows and consumer spending slows to a trickle. Think of the rising tide of homeless citizens, people without the means to buy food or meet their medical needs, and how they are thinking as Wall Street executives use those hard-earned tax dollars to award themselves with extravagant financial bonuses after playing a major role in wrecking the system.

Think how the anger is growing as people who still have power to operate their televisions watch the circus going on in Washington as Republicans balk and use every truck in the book to block President Barack Obama and the Democratic lawmakers from pushing through legislation designed to stop the freefall into a global depression.

Mr. Obama knows that he has very little time to bring legislators into lock step with his plan to try to fix the mess also left by the outgoing Bush Administration and the pack of economic advisors on the Bush team.

But the Republicans in both House and Senate have been using all of the influence they still have to water down the Obama bill and remove its effectiveness. Even as they appear to be succeeding, many economists are warning that the bill that is emerging is now so compromised that it may have little impact on the disaster occurring all around us.

What has been happening is so complex and so terrible that no matter what the Obama team does, the looming train wreck may not be avoided. As one economist explained, the Bush Administration and all of the people who pocketed the money from the treasury during the Bush years, left America with a deficit of well over a trillion dollars. Now if the government tries to borrow too deeply to bring a recovery, they run a risk of creating a deficit hole so large it will only intensify the crisis.

The alternative of printing more money without the resources to back it up will mean runaway inflation.

The demand by Republicans to include more tax cuts for higher income Americans, and offer little financial, housing or medical assistance for the poor, the people who will really put that money into circulation, is the wrong approach.

When people get angry enough, and lose faith in their leadership, do not expect them to cower in a dark corner and give up. What has happened throughout history is a violent reaction called revolution.

The revolution began last year at the ballot box. If the peaceful and democratic way of bringing change fails, then the next step could get bloody.