Seattle Courant Archive

The Battle Over Billions, Maybe Trillions

The Battle Over Billions, Maybe Trillions

By John Tetpon
February 07, 2009

Most economists think it will get worse before it gets better. In the meantime, the stock market has shown a steady decline for the past several years. Hundreds of thousands have lost their 401k retirement funds. And thousands upon thousands have lost all their life’s savings. Tens of thousands have faced or are facing foreclosure, and one in five homes is financially upside down – in short, worth far less than what buyers owe on the mortgage.

One thing is for certain in all of this; the rich have gotten richer and the poor have gotten much poorer. And the good old days, when we trusted our financial leaders on Wall Street and elsewhere, have disappeared into the sunset. The greed factor has taken hold.

Learned experts and some of our current and past political and economic leaders say they didn’t see it coming. That’s hard for me to believe. Why then would the fat cats on Wall Street give themselves monstrous salaries and humungous bonuses if they didn’t know what was just around the economic bend? It’s as if they knew something the rest of us didn’t know.

I would almost bet in a heartbeat that CitiGroup and Countrywide Financial and the rest of the mortgage world knew what they had been doing for the past decade would come tumbling down in a heap of rubble. They had to know. They probably warned each other and left it at that with the caveat: Get all you can while you can. And that’s exactly what they’ve done.

In so doing, they’ve had no shame. While America slowly wanes on the ropes and you and I are trying to find ways to pay our bills and put food on the table, one Wall Street big shot spent nearly a million dollars to re-decorate his office, including a commode on legs. Not only that, the same guy who got a new commode gave out $18 billion in bonuses to some of his employees.

Then they came to the taxpayers begging for money. And we ponyed up and gave it to them - billions upon billions of dollars. These billion dollar bonus bosses owe the American people an apology.

Now Obama has a big mess on his hands. Not only that, he made more than 500 promises on his presidential campaign trail, promises he said would revive the economic, social, and political soul of the country.

Polls say 69-percent of the people in America believed he could and would.

A few days after he moved into the White House, Obama sent a multi-billion dollar bailout plan to Congress. House Republicans and Democrats hashed it over, added a few billion here and there, and passed it on a vote split straight down party lines. Not one Republican in the House voted in favor. Republicans complained they were not consulted. Party politics won the day.

House Speaker Nancy Pelosi, D-California, said, “We won the election and Obama is president.” Pelosi was well served and well pleased after eight years of pent up emotions over not getting her way.

Senate Republican leaders immediately trashed the nearly $800 billion measure calling it instead a pork barrel spending plan. How can anyone, they asked, put $600 plus million to spend on sexually-transmitted diseases; $60 million to keep people from smoking cigarettes; give millions to the National Endowment for the Arts, and millions more to other similar programs, and say that’s going to stimulate the economy?

Borrowing money to spend it isn’t going to do anything, said Sen. Mitch McConnell of Kentucky, the Republican leader. Other Republican lawmakers called the Obama Stimulus plan the Democrat’s Spending Bill. Republicans contend only well placed tax breaks and a strong jobs bill will spur the economy.

Newly appointed Office of Management and Budget Director Peter Orszag said Monday the Obama plan is simply meant to jump-start the economy. That’s probably code-talk meaning billions more will have to be spent.

Obama is now walking a tightrope, one that will further test his political quickness and his political talents to the limit. If he fights too hard to achieve a bipartisan agreement on the stimulus plan, he just may lose some support from his own party. Fellow Democrats might jump ship just when he needs them most if he caters to the other side of the aisle a bit too much. Recall that there are plans afoot to hand out more money to the financial sector – billions more.

The battle over billions – and perhaps trillions when it all comes out in the wash – is going to be a hard needle to thread. In fact, some have said the amount of money that will be needed to fix America’s economic challenges will certainly add up to trillions.

Republicans and Democrats alike have a hard row to hoe. The American people expect – and deserve - good positive results. And we don’t care who takes credit. We want money to hit the streets soon. We need jobs. Today. Not later.