by William Cox
William John Cox is a retired
supervising prosecutor for the State Bar of California. As a police
officer he wrote the Policy Manual of the Los Angeles Police
Department and the Role of the Police in America for a national
advisory commission. Acting as a public interest, pro bono lawyer,
he filed a class action lawsuit in 1979 on behalf of every citizen
of the United States petitioning the Supreme Court to order the
other two branches of the federal government to conduct a National
Policy Referendum; he investigated and successfully sued a group of
radical right-wing organizations in 1981 that denied the Holocaust;
and he arranged in 1991 for publication of the suppressed Dead Sea
His 2004 book, You're Not Stupid! Get the Truth: A Brief on the Bush
Presidency is reviewed at http://www.yourenotstupid.com, and he is
currently working on a fact-based fictional political philosophy.
His writings are collected at http://www.thevoters.org, and he can
be contacted at firstname.lastname@example.org.
On October 3, 2008, the American people were betrayed by those whom they had
elected to represent them. The members of Congress who voted for the Wall
Street "bailout" violated their oath of office to,
"support and defend the Constitution" ...
"that I will bear true faith and allegiance to the same" ... "and that I
will well and faithfully discharge the duties of the office on which I
am about to enter: ..."
Without holding any meaningful hearings or
public discussions and listening only to those most responsible for the
Federal Reserve Board Chairman Ben Bernanke and Treasury
Secretary Henry Paulson, Congress abdicated its responsibility to the
Locking out most members from all discussions, the congressional
"leadership" emerged from their backrooms with legislation that grants
Secretary Paulson the ability to spend at least $700 billion to,
"take such actions as [he] deems necessary"
... " to promote financial market stability."
Entrusting tremendous political and financial
power (and a ton of borrowed money that taxpayers will have to repay with
interest) into Paulson's sole discretion, members of Congress must have been
aware that, prior to his cabinet appointment in 2006, Paulson worked for 32
years at Goldman Sachs, one of the Wall Street firms that stands to benefit
greatly from his "actions."
Paulson, who cashed out his Goldman stock valued at $575 million to become
the Secretary of Treasury (without having to pay any taxes on the sale),
earned more than $53 million in pocket change during just his last two years
at Goldman Sachs for innovations such as a new line of "Mortgage Backed
Securities." Gambling more than a trillion dollars on risky subprime second
mortgages, Paulson cleverly converted them into AAA-rated "secure"
investments by purchasing guarantees from the American International Group.
AIG, coincidentally, was just "bailed out" two weeks ago by Secretary
Paulson for $85 billion (of borrowed money that taxpayers will have to repay
with interest), averting a devastating loss by Goldman Sachs, who was
holding more than $20 billion in otherwise worthless second mortgages.
Is it surprising that Lloyd Blankfein, Goldman's current CEO, was present
with Paulson when the decision was made to bailout AIG?
The bailout's $700 billion price tag is only an arbitrary guess by Paulson
and is most likely just the first installment of many more to come. Other
economists, with more successful track records, believe the total will be
much greater, perhaps $5 trillion, as concealed losses are uncovered and
foreign companies dump their toxic investment waste into their American
In passing the "Emergency Economic Stabilization Act of 2008," Congress
ignored the "great concern" expressed by almost two hundred of the nation's
leading economists who pleaded with Congress,
"not to rush, to hold appropriate hearings,
and to carefully consider the right course of action,..."
In addition to its ambiguity and long-term
effects, the economists believed the bailout plan to be "a subsidy to
investors at taxpayers' expense" and to be "desperately short-sighted."
Ultimately, more than 400 top economists, including two Nobel Prize winners,
voiced opposition to the bailout.
The economists were not alone in being ignored by the politicians. It is
widely reported that calls and emails to Congress from constituents were
running as high as 300 to one against the bailout.
Mike Whitney reports one
analyst saying that,
"the calls to Congress are 50 percent 'No' and 50
percent 'Hell, No'."
The percentages adjusted as the stock market tumbled,
but public opposition to the bailout remains strong.
An AP poll only identified 30 percent of the public in favor of the bailout,
and a CNN Money opinion poll found 77 percent of the people believing the
bailout would benefit those most responsible for the economic downturn.
The Latin adage, Cui bono, asks "to whose death are you going?" Law
enforcement investigators quickly learn that the guilty party can usually be
found among those who stand to gain from a murder or other crime.
There is no doubt the bailout will most benefit some of the richest and
highest paid individuals in the American economy. But, why did the
politicians betray the wishes of those who elected them in favor of the
criminals who committed the fraud? Perhaps the answer can be found in
another Latin phrase, quid pro quo, meaning "what for what; something for
Individuals working for Wall Street finance, insurance and real estate
companies and the companies' political action committees have contributed
more than $47 million to the campaigns of Senator Obama (three of top five
sources) and Senator McCain (top five sources), both of whom voted for the
More to the point, Wall Street has contributed more than $1.1 billion
dollars to congressional candidates since 2002. Nine of the top ten House
recipients of Wall Street largesse, who each received an average of $1.5
million, are on the financial oversight and taxation committees.
Even more telling, the bipartisan Congressional "leaders" most responsible
for pushing the bailout through Congress, Senators Dodd and Gregg and
Representatives Frank and Blunt have taken almost $20 million from Wall
Street sources during the last 20 years. Dodd recently received $6 million
in contributions during his presidential primary campaign, and Frank has
collected $720,000 this year.
Other key players also have been well compensated this year: Congressman
Kanjorski received $755,000 and Congressman Bachus banked $704,000.
The ordinary, hard-working voters, who were opposed to the bailout, and
their children and grandchildren, will be the ones who will ultimately have
to repay, with compound interest, the money that will have to be borrowed to
give away to Wall Street bankers.
The bailout was "sweetened" in the Senate by another $110 billion in tax
relief and renewable energy incentives to get enough House votes for
passage; however, only the temporary one-year slowdown of the Alternative
Minimum Tax offered any succor to the middle-class workers affected by it.
The bailout raises the debt ceiling to $11.3 trillion, or about $37,524 for
each man, woman and child in the United States. How is this burden ever
going to be repaid? Workers already know their wages are falling, their jobs
are at risk, their health care, food and fuel costs are skyrocketing, and
they are being kicked out of their apartments and homes because they can't
pay the rents and mortgages.
Didn't each member of Congress have a sworn duty to rescue the millions of
Americans suffering from the reckless gambling of Wall Street moguls, rather
than to reward an obscene excess of greed?
At least six million homeowners will probably default on their mortgages
this year and next, and millions more will have their equity wiped out by
declining property values. More than 770,000 homes have been seized by
lenders since 2007, and 91,000 families were just kicked out of their homes
These American homeowners were betrayed by their elected representatives!
The only provision in the bailout legislation to remotely "benefit"
homeowners whose homes are being foreclosed upon only "encourages" mortgage
service companies to modify mortgages. Paulson is required to "maximize
assistance for homeowners ... and minimize foreclosures"; however, he also
has to ensure that the government doesn't incur any additional costs. Thus,
there's little or no hope of any meaningful benefit to distressed homeowners
resulting from the bailout.
The legislation could have required the government to directly purchase the
defaulting mortgages and to adjust them to the reduced value of the
property, as was done in the Great Depression. Instead, Paulson is
authorized to purchase the complex derivatives (Wall Street's gambling
debts) piled on top of the original mortgages.
The difference is whether
homeowners or Wall Street receives the benefit of the bailout.
More than 4,476 Americans filed for bankruptcy every day during August, the
highest number since changes in the law in 2005 made it much more difficult,
and even impossible in many cases, to obtain debt relief. More than a
million, increasingly elderly, people will petition for bankruptcy this
These destitute Americans were betrayed by their elected representatives!
Under the current law, bankruptcy judges do not have the power to modify
mortgages of a petitioner's primary residence, irrespective of how the
mortgages have been sliced, diced and repackaged.
The bailout could have
provided judges with the authority, in appropriate cases, to adjust the
amount secured by the mortgage to the value of the property and to adjust
the interest rate to a reasonable percentage.
New claims for unemployment benefits rose to 493,000 last week, the highest
level in seven years. The economy has already lost 605,000 jobs thus far
this year, and it dumped 159,000 payroll jobs just during September, the
greatest drop in five years.
These unemployed Americans were betrayed by their elected representatives!
Although the House of Representatives passed an economic stimulus bill that
would fund job creation and extent jobless benefits for long-term unemployed
workers on September 26th, the Senate failed to pass its own stimulus bill
on the same day. President Bush has promised to veto the legislation if
The bailout legislation could have provided for an extension of jobless
benefits, but it didn't.
More than 750,000 and as many as a million Americans are homeless today, and
the numbers are increasing dramatically. The National Coalition for the
Homeless reports that homelessness is growing because of foreclosures, loss
of jobs, and the rising price of fuel and food.
These homeless Americans were betrayed by their elected representatives!
Homeless sites are appearing all across the country as people with no place
to stay are pitching tents and huddling together for support and protection.
Their plight did not receive any consideration by the Congressional
leadership that rammed the bailout through Congress.
The most recent report by the Department of Agriculture found that in 2006,
35.5 million Americans lived in households with insecure food supplies and
the numbers were increasing. At risk children numbered more than 12.6
million, and African Americans and Hispanic Americans suffered at higher
rates than the national average.
In 2006, 9.6 million Americans had to frequently skip meals or eat too
little, and often had to go without food for a whole day. Today, as members
of Congress voted to reward the richest and most greedy members of our
society, they ignored those without the most basic necessity for survival.
This morning, they rewarded the most powerful and best-fed members of our
society, and gave no thought to the helpless children who will go to bed
Food banks who serve as the last resort for the hungry are running out of
food. They are having to reduce rations and to dip into emergency supplies
of staple items. There are reports of a 40 percent increase in requests for
food assistance and a 30 percent drop in supplies.
These hungry Americans were betrayed by their elected representatives!
The bailout could have increased the amount of federal assistance for food
banks in the Emergency Food Assistance Program, but it didn't.
The real estate bubble that has been driving the United States economy has
now popped, and there is no replacement engine to transport America's
consumer society down the highway to happiness. Americans are facing the
mother of all depressions; it will be hard and it will last a long time.
What are all of these homeless, hopeless, and hungry people going to do?
Many have already exercised their First Amendment right to petition their
government for the redress of grievances. A majority of the members of
Congress, the two presidential candidates, and the President paid no
attention to the economic experts and the thousands and thousands of voters
who protested the bailout and who begged them to rescue the people rather
than the rich and powerful.
The people can always take to the streets in protest, and they probably will
do so in growing numbers as the economic circumstances become more harsh.
The U.S. government is already planning for the eventuality - not with the
helping hand of supplemental legislation to help with mortgages, jobs,
shelter or food, but with the mailed fist of military suppression. The Army
Times reports the current deployment within the United States "homeland" of
an "on-call federal response force for natural or manmade emergencies or
disasters, including terrorist attacks."
The Army acknowledges that the
Northern Command may call upon the 3rd Infantry Division's 1st Brigade
Combat Team to help with "civil unrest and crowd control."
With almost a trillion dollars picked from their pockets to reimburse
reckless Wall Street gamblers, many Americans righteously feel betrayed
tonight. A majority will elect a new president one month from tomorrow, and
most will wait to see who it will be, and what if anything he can or will do
to alleviate their suffering.
There are others, undoubtedly, who agree with the Supreme Court's recent
decision that the Second Amendment right to bear arms is individually held,
and who believe that the use of their personal weapons is justified to
overthrow a government that betrays them and which destroys their very means
of existence. The right of legitimate self defense is recognized by every
criminal law in America.
Perhaps democracy in the United States is not dead; if not, it's on its
Resuscitation in the form of responsible representation is
possible, but time is growing short.