The Backbencher

Why We Need the Bailout

We, as a nation, are facing a critical choice: Should we give Wall Street something in the neighborhood of a trillion dollars so that it can continue doing the outstanding job it’s doing? Or should we let Wall Street collapse and see if the rest of America can get by without all those "financial services" that Wall Street provides?

To help you, and all Americans, understand why we need this bailout package – and we urgently do – I’ve decided to answer all your questions. Right here, right now.

Why should we give this money to Wall Street? I mean, if the economy needs to be spurred by an injection of billions of dollars, why not give it to us?

That’s a funny question. You already have it! Ha ha! What sense would it make to take money from taxpayers and give it straight back to taxpayers? That’s just silly. The whole point is to take the money from taxpayers and give it to someone else – preferably some hedge-fund manager who doesn’t pay taxes at all thanks to his tax-sheltered yacht parked off Antigua. I know it’s hard for you to understand, but the fact is that, after all is said and done, the money actually will come back to you, the taxpayer. How? As a result of rescuing Wall Street, banks and yacht captains will be able to extend loans to people on Main Street. That way, Main Street businesses will be able to make the investments that are needed to keep the economy going.

If the problem is that people on Main Street need loans, then why don't we just loan the money directly to them, instead of giving away it to the people on Wall Street?

You need to look at the broader picture. Farmers need to buy seed for their field, ranchers need to buy feed for their cattle, and bankers need to buy drinks for their congressmen. Everybody plays their part. That’s how the economy works.

I completely fail to understand why it helps anything to buy bad loans from banks. If banks made bad loans, shouldn’t the banks suffer the losses?

The problem, with all due respect, is that you simply don’t understand enough about economics and finance to form your own judgment about these sorts of things. Don’t forget that officials in the Bush administration have carefully thought this through. Do you think you could have done a better job evaluating pre-war intelligence from Iraq? Or deciding exactly how many days to wait before sending help to New Orleans after Hurricane Katrina? I’m sure you don’t.

More importantly, you need to realize that this situation is not the fault of the bankers. Everybody thinks they can Monday-morning quarterback the whole situation, but that’s unfair. It’s easy now to say, “Well, you shouldn’t have accepted loan applications filled out in crayon.” Or, “It was a mistake to give five mortgages to a single 19-year-old who listed his employment as ‘watching Flip That House! on cable tv.’” The fact is, it’s not productive to look backward. We need to reject the impulse to lay blame, and we need, instead, to figure out how we are going to solve this crisis.

Hmmm. Let me see. Um. Oh! I’ve got it! How about we keep our money and just see how things go?

That may seem like a tempting course. But we simply cannot wait. As the Bush administration has explained, without the bailout, Wall Street will collapse, and the misery will quickly spread to Main Street.

How? How exactly will the misery spread from Wall Street to Main Street?

Think about it this way: If Wall Street collapses, tens of thousands of investment bankers, stock brokers, and other financial-industry professionals will be out of a job. While they will retain their education, skills, and knowledge, the companies they work for will no longer be able to pay their salaries. At that point they will be forced to leave Wall Street and come to your town looking for work.

Do you really want them to set up a hedge fund inside your local Wal-Mart between the optical center and the portrait studio? I didn’t think so. You wouldn’t be able to get from the self-checkout to the greeter table without some pinstriped MBA trying to sell you a collateralized derivative-backed forward-swap debenture. And believe me, you don’t want that. It’s worth however many hundreds of billions we have to pay to keep these people in lower Manhattan, where they just sell these things to each other.

Okay, you’ve convinced me. How can I help?

Please, support the bailout by writing or calling your congressional representatives as soon as you read this. Do it first thing in the morning. If you wait until 3 p.m. in the afternoon, they’ll probably have already left to go drinking with the bankers.

Un-Conventional Wisdom

It was lousy timing for the Democrats to start their convention the day after the Beijing Olympics ended. It really brought into stark contrast the boringness of national politics compared to sports – even sports like synchronized diving.

No matter how much of an ardent Democrat you are, you have to admit, there was not a single speech given at the Democratic National Convention that couldn’t have been improved by having the speaker deliver it while jumping on a trampoline.

One of the problems with the convention was its pre-determined outcome. With sports, unless it involves Usain Bolt or Michael Phelps, you really never know who’s going to win. But the Democratic convention was, of course, entirely staged, with Obama’s people making sure that there was not a single thing left to chance. Ironically, this was done by the campaign in order to custom tailor the convention for television. Yet the whole thing ended up not even having the requisite level of excitement necessary to justify a PowerPoint presentation.

If political parties want people to watch conventions on television, then they’ve got to give us a reason to tune in. Television is not rocket science: To be watchable, the convention’s got to be either funny, dramatic, sexy, or chock full of home-decorating advice. Since politicians aren’t funny or sexy, and since they don’t like to talk about the lobbyists who paid for their home decorating, that leaves dramatic as their only option.

Back before Hilary Clinton conceded, it looked like the Democratic convention could actually get dramatic. Most of the expected drama seemed to hinge on the question of what the “super delegates” might do.

Having delegates that were “super” was an inspired idea, but they turned out to be a big-time let down. Long before the convention started, they all decided to fall in line for what was “good for the party,” which is politico-speak for “bad for television.”

Politicians are always saying that this country is tired of “politics as usual.” Great. I agree. It’s time for them to put their money where their mouths are, nix the super delegates, and try these instead:

CELEBRITY MYSTERY DELEGATES – These would be delegates whom no one would know the identity of until they were revealed during prime-time at the convention. Imagine this: A curtain goes up, and silhouetted mystery delegates are suddenly illuminated with spotlights. A baritone announcer booms:

From “America’s Funniest Home Videos,” please give a warm welcome to Tom Bergeron! Next, you know her as that gold-medal-winning darling from the 1996 Olympics in Atlanta, please give it up for Kerri Strug! And finally, the father you remember from “Growing Pains,” and most recently host of the “All New 3’s a Crowd” on the Game Show Network, ALAN THICKE!!!”

SURPRISE DELEGATES – These delegates would be ordinary folks – just like you and me – who, while sitting at home, would find out that they have been picked to board a plane in the next two hours to travel to the convention and to help pick America’s next president! Of course, to keep television ratings high, they would have to call within 10 minutes after their name was announced on television, otherwise someone else would be picked to go in their place. Ideally, the names would be revealed by opening aluminum briefcases held by models, and Howie Mandel would emcee: “Susan Brykowski of Lake Ronkonkoma, call in now to confirm your place as a Surprise Delegate! Hurry, you have just seven minutes left!”

CASTAWAY DELEGATES – How awesome would it be to see bitter defeated candidates sitting on a jury of castaway delegates, with the would-be nominees taking their questions and groveling for their votes? Imagine Dennis Kucinich asking Obama, “Do you remember in New Hampshire when my campaign got lost on the way to the Laconia Senior Center, and your campaign told us to go the wrong way on Route 11A, and we ended up in Meaderboro Corner before we figured out where we were? Do you think that was political fair play? And if not, why should I still vote for you?”