I say enough is enough. Let’s stage a revolution on Wall Street. Let’s protest in front of the skyscraper of A.I.G. in New York. Let’s tell Obama in no uncertain terms that this top-down, trickle-down rescue is not the way to go about saving the world.
Now I am no economist, but I recently heard former hedge fund manager Raj Bhatia and mortgage broker Albert Behin present a plan to rescue the economy on NPR that made utter sense. What is attractive about their plan is that it is a grass-roots effort directed at each house and each consumer. Their plan to buy toxic assets goes something like this: They have formed a company that goes from neighborhood to neighborhood and house to house to restructure each mortgage based on the new value of the house at a reduced payment per month. The bank which owns the house has already lost a lot of money, so it can afford to cut its losses and sell it back to the original holder of the mortgage or to the new company for a reduced price. The company could then negotiate a lower payment with the borrowers in exchange for a cut of the action. Or, the company could simply own the house and rent it to the original mortgage holder.
The point is, if thousands of companies like theirs can find investors, the mortgage crisis will go away and the economy will recover, because the mortgage holders and consumers will be able to get their feet on the ground. And the companies who invested in this worthy venture will create new jobs in an entirely different type of a finance sector.
Now this is the kind of plan toward which at least some of Obama’s $250 billion could be targeted.
Their plan got me thinking: if they know who the mortgages belong to, how come the banks say they don’t?
In fact, simple logic defies the banks’ claims that they can’t track the toxic assets. After all, if you are one of the holders of a toxic mortgage, you know who you were sending your monthly payments to, right? All you have to do under this new grass-roots plan is to sort out the business between the person paying the mortgage payment and the person receiving it.
What would happen to A.I.G., Goldman Sachs, and Citigroup under this plan, you ask?
Frankly, to answer that question and to commit further billions, we taxpayers would need to know exactly what these dysfunctional giants did before. I mean, if gambling in toxic assets is what they used to do, we probably won’t need them in the future. In any case, whatever it is they do, if Timothy Geithner and Larry Summers cannot understand it, it is probably something they should not be doing. At the very least, they should not get the money until Congress, Obama, and the business reporter from the New York Times can explain it to all of us in simple terms.
I stand behind the plan proposed by Bhatia and Behin because I believe that small is still beautiful. I am referring to Small is Beautiful, a book that British economist E.F. Schumacher wrote in the 1970s with the subtitle “Economics as if people mattered.” It propounded the notion that small, centralized development was better than large scale industrialization. Schumacher passionately advocated sustainable development at a local level.
He wrote, “[N]o system or machinery or economic doctrine or theory stands on its own feet: it is invariably built on a metaphysical foundation, that is to say, upon man’s basic outlook on life, its meaning and its purpose.”
It is too late to undo the metaphysical foundation of our past economic fallacies, which were clearly based on false ideals of greed, exploitation, and inequality.
But the rescue plan does not have to be based on the same unethical foundations.
And what of the executives who caused the world economy to collapse and then shamelessly took $165 million home in bonuses? When he suggested that these greedy executives should “resign or go commit suicide,” Senator Charles Grassley of Iowa took the words out of my own mouth. In Japan, to be shamed is a fate worse than death. Dignity, pride, and honor are prized in that society, even by business executives. In America, on the other hand, to be successful is to be shameless and arrogant.
Example: After creating the Iraqi disaster, after ruthlessly trampling on our constitutional rights, after pressuring the Republican former Fed Chairman Alan Greenspan to ignore the housing bubble in order to re-occupy the White House in 2004, George W. Bush is now shamelessly embarking on a speaking circuit. One can only imagine the possible topics for his oratory: “How to Accelerate the Second Coming by Bringing the World to the Brink of Ruin” could be one. “How to Become the Leader of the Free World without Intellectualism, Self Examination, or Knowledge” could be another.
If Wall Street executives and Bush and his cronies will not be ashamed by their actions, we must bring them to shame. How? By boycotting, by booing, and by simply refusing to abide by their false paradigm.
So start writing to your Congressmen now, get on Obama’s website and let him know that you don’t want a dime more of your money to go to the crooks, and most importantly, start organizing protests against Wall Street.
|Sarita Sarvate writes commentaries for Pacific News Service and KQED. A collection of her writings can be found atwww.saritasarvate.com|