"Hoover's 1931 Bailout Of The Banks Failed"

[Better Believe It]

September 26, 2008
CommonDreams.org
How Wall Street Can Bail Itself Out Without Destroying The Dollar
by Thom Hartmann

For Grover "Drown Government In The Bathtub" Norquist, this bailout deal will work out very well. At a proposed cost of $4,780 per taxpayer, it'll further the David Stockman strategy of so indebting us that the next president won't have the luxury of even thinking of new social spending (expanding health care, social security, education, infrastructure, etc.); taxes will even have to be raised just to pay for the bailout. It'll debase our currency, driving up commodity prices and interest rates, which will benefit the Investor Class while further impoverishing the pesky Middle Class, rendering them less prone to protest (because they're so busy working trying to pay off their debt). It'll create stagflation for at least the next half decade, which can be blamed on Democrats who currently control Congress and, should Obama be elected, be blamed on him.

But there's another way: Create an agency to fund the bailout, loan that agency the money from the treasury, and then have that agency tax Wall Street to pay us (the treasury) back. It's been done before, and has several benefits.

So let's go back to what we know works. After Hoover's 1931 bailout of the banks failed, FDR did a cold reboot of the entire system, putting into place strong rules to prevent speculative abuse. And he doubled the STET (Securities Transaction Excise Tax) tax, both producing revenue that more than funded the Securities and Exchange Commission and further prevented a repeat of the speculative bubble of the 1920s that led directly to the Republican Great Depression.

We've done it before. We financed the Spanish American War and partially financed the Civil War, WWI, and WWII with STETs. We stabilized our stock market with a STET from the mid-30s to 1966, and other nations are doing it today. It's time to do it again, this time using the STET so tax Wall Street can pay for its own bailout.

Please read the entire article at:

http://www.commondreams.org/view/2008/09/26

[galileoreloaded]

1. Nobody will believe this, they are to worried about their own IRA's..

to buy anything but $700 Billion Koolaid. The Koolaid though, has a strange bitter aftertaste.

[dailykoff]

9. That's my impression.

I hate to see anyone lose their retirement but letting Buscho pipeline a few more trillion out of the Treasury isn't going to save them.

[SoCalDem]

10. Which is why we need to go back to what worked..

Union jobs
defined benefit pensions
fortified and re-paid Social Security

"the three legged stool"


and suddenly the perverse "need" to gamble on wall street just goes away..It reverts back to the way it USED to be.. a playground for rich folks who could afford to take chances with money

[crickets]

2. K&R

[prayin4rain]

3. I agree we should be looking at a broad range of options instead of

just trying to modify the robbery of ourselves.

[dkofos]

4. Good article from Thom. And the same will happen if they bail out the banks this time too.

Only it will cost more than a TRILLION this time around.

[MadinMo]

5. Wow!

Kicked and recommended.

[FatDave]

6. Exactly.

Put a tax on stock trades. Why the fuck not? Don't they do this in Europe with no adverse effect? We're talking fractions of a percent here.

If our income is taxed, and our purchases are taxed, and our property is taxed, why the fuck are stock purchases tax free?

[Hawkowl]

7. Keep pushing this

I've been pushing this the past week. Let's keep it front and center.

[mmonk]

8. The current purpose is to keep credit available.

Not to save this or that bank. The FDIC already brokered a sale of Wa Mu.