Bush Bailout = Business As Usual For Last 30 Years

In 1998, I was extremely naive. I thought that George W. Bush could never be elected President for one very simple reason: he had made his fortune by getting the taxpayers to build a stadium for him. That may have played just fine in , a corrupt Southern political culture, but once outsiders started focusing on it, I did not see Bush lasting very long.

Far from being opposed to “big government”, Bush was a poster boy for it… so long as it benefitted people like him. Surely, some GOP rival would step forth and ridicule him off the stage in the primaries, and if not, he would be blown away in the general election.

Yeah, right. Well, earlier this year, Pulitzer Prize-winning journalist David Cay Johnston of The New York Times published a book that puts Bush’s financial shennanigans into perspective, and shows how its just a tiy part of a massive, multi-faceted restructuring of the American economy to subsidize the rich and the super-rich, while the rest of us sink under the weight of supporting them. In short, it shows how the currently-proposed Bush bailout is nothing more or less than a direct continuation of the very practices that caused the financial crisis in the first place. The book is Free Lunch: How The Wealthiest Americans Enrich Themelves At Government Expense (And Stick You With The Bill.), and Johnson appeared on Bill Moyers Journal in January to talk about it. Excerpts on the flip.
Book Theme

First off, Johnson explains the theme of his book:

BILL MOYERS: Yeah, the theme of the book as I read it is that not that the rich are getting richer but that they’ve got the government rigging the rules to help them do it.

DAVID CAY JOHNSTON:That’s exactly right. And they’re doing it in a way that I think is very crucial for people to understand. They’re doing it by taking from those with less to give to those with more. So the other moral authority I cite in the book is the Bible, both the Old Testament and the new. And all the way through those two books you can read condemnation after condemnation of taking from the poor to benefit the rich. You will come to ruin, it says in the Old Testament, if you give to the rich and yet that’s what we’re doing. We gave $100 million dollars to Warren Buffett’s company last year, a gift from the taxpayers. We make gifts all over the place to rich people. And yet the way the news media write about it, people are often very unaware of this because we use complicated terms and meaningless language to the average reader so they don’t understand what’s happened.

Naming Names

Then there’s a little bit of naming names:

BILL MOYERS: You mentioned Warren Buffet. I was impressed in the book that you do name names. And so let me mention some of the names that you talk about in the book. Warren Buffet. Everyone respects him as the world’s greatest investor. Yet he’s in your book on free lunches.

DAVID CAY JOHNSTON:In Several places.

BILL MOYERS: Several places.

DAVID CAY JOHNSTON:He got a $665 million interest-free loan for the utility he has in the Midwest. Now–

BILL MOYERS: From? He got the loan from?

DAVID CAY JOHNSTON:From the taxpayers. Now, imagine for a moment that the house you live in today, you bought it 24 years ago and you agreed to pay the price then. And now you’ve got to pay back with no interest half the price in the dollars you agreed to in 1924. You could be rich just from that alone?

A Brief Digression About Warren Buffett

You may recall from the discussion in David’s diary yesterday, “Obama’s Economic Cabinet: Team of Rivals? How About Team of Wall Street Yes People.”, that a number of folks defended Buffett as “a progressive”. A few examples:

Calvin Jones and the 13th Apostle:

David

you might want to check into Buffett more .. he surely is progressive … and not just on taxes … in fact .. whether you agree with his reasons .. he was at the forefront of “Right to Choose” debate .. read about his early 70’s work on it .. he, along with his Berkshire partner Munger .. put up their own dough to fund the case

historyrocks:

Not only that

but he has done a lot of work trying to stop nuclear proliferation, is against high CEO wages, and doesn’t believe in big inheritances (much to the chagrin of his children, I assume). He is a capitalist, as were the others around the table, and he is rich, but he might have a lot of wisdom to impart. That David doesn’t see this saddens me.

davisb:

How the hell is Warren Buffett not a progressive?

Because he’s rich?

What all these miss is that the issues they cite have nothing to do with the issue at hand–the American people bailing out the super-rich. On that issue, Buffett’s record is clear. He’s come back for seconds, thirds, fourths and fifths.

Back To Naming Names

It’s not just no-name peole you never heard of. All sorts of folks who are supposed to be uber-symbols of accomplishment are on the government dole:

BILL MOYERS: But those are the rules. Buffet was doing something legal.

DAVID CAY JOHNSTON:That’s right. And that’s always the biggest is what is legal. Steve Jobs. Well, Steve Jobs got $70 million of stock options at a meeting of the board of Apple company directors that never took place.

BILL MOYERS: In fact, you say Steve Jobs arranged to have his fraudulently-issued options exchanged for restricted stock worth hundreds of millions. And the government has yet to take any action.

DAVID CAY JOHNSTON:Well, not against him.

BILL MOYERS: But not against him.

DAVID CAY JOHNSTON:They prosecuted two people under him, one of whom said, “I warned Mr. Jobs about this.” Mr. Jobs says, “You know I really didn’t understand the rules.”

BILL MOYERS: Donald Trump.

DAVID CAY JOHNSTON:Donald Trump benefits from a tax specifically levied by the State of New Jersey for the poor. Part of the casino winnings tax in New Jersey is dedicated to help the poor. But $89 million of it is being diverted to subsidize Donald Trump’s casino’s building retail space.

BILL MOYERS: How does that happen?

DAVID CAY JOHNSTON:Political connection, the news media not paying enough attention,

Sports Franchise Monopolies

An entire sector of the economy–the top sports leagues–is a government sanctioned monopoly enterprise, but simply being protected from competition is not enough for them to make piles of money. They have to feed directly at the public trough:

BILL MOYERS: The New York Yankees.

DAVID CAY JOHNSTON:George Steinbrenner, like almost every owner of a major sports franchise, gets enormous public subsidies. And Steinbrenner is getting more than $600 million for the new Yankee Stadium on-

BILL MOYERS: From the public?

DAVID CAY JOHNSTON:From the public But, you know, the major sports franchises which are, first of all, exempted from the laws of economic competition. So-

BILL MOYERS: Yeah, a monopoly.

DAVID CAY JOHNSTON:That’s right. Irony is not dead. They derive, I show in Free Lunch, 100 percent of their profits from subsidies. In fact, if it weren’t for these subsidies, the , football, hockey, and basketball enterprises as a whole would be losing hundreds of millions of dollars a year.

BILL MOYERS: And the irony, as you say, is that at least 27 billionaires own major sports teams, all of which benefit from public subsidies.

DAVID CAY JOHNSTON:In one way or another. Some much more than others. But they all benefit.

BILL MOYERS: You remember what Art Modell said back in 1996 when he was manipulating Baltimore and Cleveland into a bidding for his football team? He was asked how he felt about taking money for his out of– for his own pocket at the very same time library funds were being cut. Remember what he said?

DAVID CAY JOHNSTON:Oh, yes. The pride of having a professional team is worth more than 30 libraries.

George W. Bush

And this is just where President AWOL fits in:

BILL MOYERS: George W. Bush.

DAVID CAY JOHNSTON:Well, this is one– this is a great irony. owes almost his entire fortune to a tax increase that was funneled into his pocket and into the use of eminent domain laws to essentially legally cheat other people out of their land for less than it was worth to enrich him and his fellow investors.

BILL MOYERS: By building this stadium in Arlington,

DAVID CAY JOHNSTON:For the Rangers.

BILL MOYERS: – team– Rangers.

DAVID CAY JOHNSTON:Right.

BILL MOYERS: That’s right.

DAVID CAY JOHNSTON:One of the key sources I quote is a prominent lawyer married to a United States senator who is the expert in on municipal finance. The subsidy, he says, is $202.5 million. And Bush and his partners captured about 168 million of it.

BILL MOYERS: Bush, you say, used eminent domain to claim the land on which the stadium was built, right?

DAVID CAY JOHNSTON:Right.

BILL MOYERS: And Bush advised his investors, his co-investors this is a sweet deal ?

DAVID CAY JOHNSTON:Oh, yeah. He said that I mean, here’s this money losing team. It’s got this little stadium. It can’t make money. But if we can get a stadium built, it’ll be worth a lot of money. And that’s going on all over the country. All you have to do is get the stadium built and we’ll– you’ll be rich.

Neo-Mercantilism

This is mercantilism, folks. It’s precisely the system of protected, government-sanctioned and subsidized monopolies that Adam Smith railed against in The Wealth of Nations, the system that we rebelled against, when we dumped the tea into Boston Harbor. And they sell it to us under the stolen brand name of “free enterprise” and “free markets”, and tell us it’s unpatriotic to question the very system that we rebelled against in the Revolutionary !

So what we’re seeing right now, this weekend, this massive wealth-tranefer Bush “bailout”–it’s all just more of the same corrupt system that’s been grinding us down since 1980. This is the conservative economic system on steroids. And it’s high time that Democrats stood up to put an end to it.

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    October 6, 2008 | Filed Under Blue Political News

     

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