Wall Street Socialism.

• Author: Rothschild, Matthew
• Position: Comment - Viewpoint essay

If there are no atheists in foxholes, there are certainly no capitalists in a financial crisis. They become socialists overnight.

So in September and early October, we saw the astonishing spectacle of one financial institution after another coming on bended knee to Washington. And when he couldn't hand out bailouts in single file, Treasury Secretary Henry Paulson proposed an industry-wide bailout.

But true to his Republican and Wall Street roots, his plan was essentially to declare himself king of the economy and to funnel $700 billion to his friends who got us into this mess in the first place.

Congress didn't swallow that whole hog--but it did take most of the beast. And it added an extra $100 billion in gravy.

With Wall Street prostrate, you might have thought that the Democratically controlled Congress would have exercised its leverage and gotten a better deal for the American public.

But the Democratic leadership was more concerned about winning over some retrograde Republicans who were still worshipping at the altar of the free market instead of appealing to members of the Progressive Caucus, the Black Caucus, or the Hispanic Caucus, who wanted to make sure that the bailout reached people who were suffering the most--those facing foreclosure and unemployment.

There was nothing in the final bill about a moratorium on foreclosures.

There was nothing in the final bill about a freeze in mortgage interest rates.

There was nothing in the final bill allowing judges to renegotiate mortgages of those who file for bankruptcy. (Under current law, judges are allowed to renegotiate mortgages only on people's second homes--not on their primary residence.)

There was nothing in the bill about creating jobs, or extending unemployment benefits, or sending money to state and local governments that are having to cut programs savagely.

Instead, members of Congress did what Paulson asked them to do, and threw the money at the lenders who had gambled so recklessly and hoodwinked consumers so shamelessly.

Rather than help people most in need, it gave businesses more tax breaks. And it lifted the federally insured deposit limit from $100,000 to $250,000, which provided comfort to the rich, who needed to find safe harbors for their money, but nothing for those who don't have a spare hundred grand.

The biggest, saddest irony of all is that the bill did absolutely zilch to establish new regulations on the financial industry so this crisis won't happen again.

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