What About the Rest of Us?

As Wall Street collapses under the weight of its greed, bad luck, and basic stupidity, the Free MarketTM crusaders of the Bush White House have come out of the pro-regulation, big-government closet. This morning, Treasury Secretary Henry Paulson said that the federal government will ride to the rescue of the investors in distress. And everyone seems to agree: Wall Street must be given a handout hand up. And while everyone here in Washington can't wait to throw hundreds of billions of dollars at Wall Street in record-setting time, a $50 billion economic stimulus package aimed at families struggling to eat and pay their energy bills was all but DOA this morning (the prognosis for the package is looking much better now, however). Hmmm. Hundreds of billions of dollars for Wall Street: "Who do we make the check out to?" Fifty billion dollars for struggling families economic stimulus: "Get a job, bum!" Matthew Yglesias notices the asymmetry of concern: It'd be absurd for the government to be moving hundreds of billions of dollars around amidst an economic crisis while doing nothing for, say, janitors who get laid off from Lehman Brothers. The problems to worry about here are in the "real" economy. Propping up the financial sector can help accomplish that, but we also need to prop up normal people trying to pay the bills and weather the storm. And Isaiah J. Poole at Campaign for America's Future reminds us that providing aid to working or out-of-work families benefits more than just those families. This stimulus effort was resisted by the White House and by congressional conservatives, one of whom—House Minority Whip Roy Blunt, R-Mo.—groused that "bailing out the states on their Medicaid problems or providing $25 billion worth of infrastructure spending are not stimulative and everyone knows that." "Everyone knows that?" No. What "everyone knows" is that when ordinary people have good jobs—whether they are created by private investment or public investment—they are able to buy the houses, cars and other goods and services that help keep the economy afloat. In particular, a program of spending public dollars on a range of job-producing activities—from fixing roads and bridges to "greening" our public buildings with renewable energy and conservation—would go a long way toward stabilizing the faltering middle class of this country. What "everyone knows," or ought to realize, is that doing nothing to interrupt the falling dominoes of spending cutbacks at the federal, state and local levels is a recipe for continued economic erosion. Image by Flickr user oblivion9999 used under a Creative Commons license
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