By Marie Cocco
It would be nice to believe that things will be different next time.
“What’s the point in bailing them out if there aren’t any jobs?’’ asks one of the organizers of the Christmastime protest at Republic Windows and Doors, the Chicago company whose laid-off workers staged a peaceful, six-day sit-in at the factory last December to win back pay to which they were entitled. Scenes from the occupation are featured in Michael Moore’s new film, “Capitalism: A Love Story.”
The Republic layoffs occurred long before unemployment rose to a 26-year high of 9.8 percent, a figure that masks the depth of the jobs crisis because it doesn’t count those who’ve stopped looking for work or had worked part time, or others who don’t show up in the official tally because of the antiquated system under which we count the unemployed. The Moore film was prepared for distribution before Goldman Sachs and other Wall Street firms that received taxpayer bailouts announced that they’re doing just fine now, thank you.
The sit-in was the sort of uprising Moore has long advocated. It was a bold act of rebellion against a stacked economic system that has destroyed much of what Moore has ever believed in, from the assembly-line job his father held at a spark plug factory, to the middle-class perks of Catholic schools and family vacations, to General Motors itself—once the lifeblood of his hometown of Flint, Mich.
Now there are companies like Condo Vultures.
Moore chronicles the endeavors of this Florida enterprise as it gobbles up foreclosed apartments for a fraction of the price their former owners paid. The difference between the real estate flippers and the vultures of the animal world, an earnest company representative tells Moore, is that the Condo Vultures don’t throw up on themselves.
You can grow weary of Moore’s style. But more unsettling is seeing how the clamor for change has quieted since the public uproar over last year’s Wall Street bailouts.
The $700 billion infusion of taxpayer cash into financial institutions probably averted a global banking collapse. But it has done nothing to keep millions of Americans from losing their jobs, their homes, their fading belief that hard work and commitment can somehow insulate them from facing the worst.
So what was the point of bailing the banks out if there aren’t any jobs?
That was supposed to be the objective, to get credit flowing so that businesses could continue to do business. Yet credit markets are still sluggish and workers are paralyzed by job losses, pay cuts and salary freezes.
The fevered urgency with which the bailout was pushed by the Bush administration and enacted by the Democratic Congress last year has been followed by dithering in the midst of the employment crisis. The House has passed an extension of unemployment benefits for the long-term jobless; the Senate hasn’t acted. The Obama White House slowly ponders its options, and no one—heavens no!—is willing to say there should be another large economic stimulus package.
Meanwhile, work has stalled on what was supposed to be a true public works project: re-regulating an industry that ran wild.
A credit-card reform measure passed, but banks shifted to bleeding prepaid debit card holders with outlandish fees. The House took steps against predatory mortgage lending in May; the Senate has yet to act. Trading in derivatives is still largely unregulated. So are hedge funds. Legislation to enact broader consumer credit protections is stymied. A measure to allow bankruptcy judges to modify mortgage payments on home loans—as they do for business loans—was killed.
The financial, insurance and real estate industries—the troika at the heart of the meltdown—spent more than $459 million lobbying Congress last year, according to the Center for Responsive Politics. That is more than the amount spent by any industry sector other than the unsurprising lobbying champion of 2008, the health care industry. The sum for 2009 has not been calculated.
If I spent nearly a half-billion dollars to win your ear, would you listen? This is the bet the financial industry makes. It continues to yield excellent returns.
And this is the scandal of the big bank bailout. The rescue was necessary to avoid the larger terror of worldwide depression. But the aftermath was supposed to answer the justifiable anger of the citizenry with a tough regulatory regimen. The political malfunction that prevents this part of the bargain from being kept is the real systemic failure.
Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
© 2009, Washington Post Writers Group