Dennis Kucinich on the Democrats’ Bailout Betrayal

Posted on Oct 5, 2008

AP photo / Susan Walsh

Rep. Dennis Kucinich does bailout battle in the halls of Congress.

By Chris Hedges

The passing of the $850-billion bailout pulled the plug on the New Deal. The Great Society is now gasping for air, mortally wounded, coughing up blood. It will not
recover. It was murdered by the Democratic Party.

We are on our own. And don’t expect any
help from Barack Obama and Joe Biden, who lobbied hard for the bill and
voted for it. Ignore their rhetoric. Look coldly at the ballots they
cast against us. We, as citizens, have only a handful of
representatives left in Washington, most of whom were left sputtering
in rage and frustration on the House floor. The sad irony is that some
of them were Republican.

“This was the largest single act of class warfare in the modern history of this country,” Rep. Dennis Kucinich,
D-Ohio, who led the fight in the House against the bailout, told me by
phone from Cleveland. “It is a direct attack on the American people’s
ability to be able to stabilize their homes and their neighborhoods.
This single vote will define the careers of everyone. We are back to
taxation without representation, to markets that are openly rigged.”

“We buried the New Deal,” he said of the
vote. “Instead of Democrats going back to classic New Deal economics
where we prime the pump of the economy and start money circulating
among the population through saving homes, creating jobs and building a
new infrastructure, our leaders chose to accelerate the wealth of the
nation upwards. They did so in a way that was destructive of
free-market principles. They ripped away all the familiar moorings. We
are in an uncharted sea where the traditional roles of the political
parties are being switched. The Democrats have unfortunately become so
enamored and beholden to Wall Street that we are not functioning to
defend the economic interest of the broad base of the American people.
It was up to the Republicans to protect not just a so-called free
market but the American taxpayer and attempt to block this. This is an
outrage. This was democracy’s Black Friday.”

Obama arrived on the Senate floor
Brutus-like to thrust a knife into the back of the working and middle
class. He lobbied hard for the bill. He did so, according to some who
met with him on Capitol Hill, because he feared that if he opposed the
bailout and it triggered a market collapse it could cost him the
election. Better to placate the thieves on Wall Street than stand up
for the masses of enraged and swindled citizens.

Obama’s betrayal is the betrayal of the Democratic Party. The Democrats gave us the Financial Services Modernization Act of 1999, which ripped down the firewalls that were put in place by the
1933 Glass-Steagall Act. The 1933 act, designed to prevent the kind of
meltdown we are now experiencing, established the Federal Deposit
Insurance Corp. (FDIC). It set in place banking reforms to stop
speculators from hijacking the financial system. With Glass-Steagall
demolished, and the passage of NAFTA, the Democrats, led by Bill
Clinton, tumbled gleefully into bed with corporations and Wall Street
speculators. They achieved fundraising parity with the Republicans.
They used institutions like Fannie Mae and Freddie Mac as a welfare
gravy train. The Democrats, including Obama, are as compromised as the
Republicans.

Obama’s voting record in the Senate is in
line with the corrupt Democratic mainstream, including Biden, who works
on behalf of corporations and especially the credit card industry.
Obama knows where power lies in the United States. It is not with the
citizens, who with ratios of 100 to 1 pleaded with their
representatives in Washington not to loot the national treasury to bail
out Wall Street investment firms. Power lies with the corporations.
These corporations, not us, pick who runs for president. You cannot be
a candidate without their blessing and money. These corporations,
including the Commission on Presidential Debates, a private
corporation, determine who gets to speak and what issues candidates can
or cannot challenge, from universal, not-for-profit, single-payer
health care to Wall Street bailouts to NAFTA. If you do not follow the
corporate script you become as marginal and invisible as Ralph Nader or Bob Barr or Cynthia McKinney. 

Obama has always served his corporate
masters. He opposed Rep. John Murtha’s call for immediate withdrawal
from Iraq and supported continued funding for the war. He voted in July
2005 to reauthorize the Patriot Act. He did not support an amendment
that was part of a bankruptcy bill that would have capped credit card
interest rates at 30 percent. He opposed a bill that would have
reformed the notorious Mining Law of 1872, which allows mineral
companies to rape federal land for profit. He did not back the
single-payer health care bill HR 676,
sponsored by Kucinich and John Conyers. He advocates the death penalty
and nuclear power. He backed the class-action “reform” bill—the Class
Action Fairness Act (CAFA)—that was part of a large lobbying effort by
financial firms, which make up Obama’s second-biggest single bloc of
donors. CAFA would effectively shut down state courts as a venue to
hear most class-action lawsuits. Workers, under CAFA, would no longer
have redress in many of the courts where these cases have a chance of
defying powerful corporations. CAFA moves these cases into
corporate-friendly federal courts dominated by Republican judges. 

Obama’s support for the bailout, however,
is his most egregious betrayal. He had a brief, shining moment to prove
he could lead, to capitalize on a popular revolt that cut across the
political spectrum. He never attempted to address or mobilize the
aspirations and passions of the vast majority of Americans. He was as
craven, servile and cowardly as the party he represents. He returned to
the campaign trail after Friday’s vote as a slick and polished sales
representative for our corporate state, telling us to calm down and
accept the inevitable. 

“Some of the most powerful speeches
against this were given by members of the Republican Party who are on
the political right,” Kucinich said. “They did a superb job in poking
holes in the underlying assumptions of the bailout. They say what they
believe. Give me somebody who says what they believe and I can figure
out how to get them to a new place. When people say one thing and do
another it is very hard to be able to move a debate.”

So let us honor, in our moment of defeat,
the handful of elected officials who valiantly defied their party
leaderships in the House to stage a remarkable revolt that at first
succeeded. Kucinich is one. There were others—Brad Sherman, Marcy
Kaptur, Peter DeFazio, Lloyd Doggett and Robert C. “Bobby” Scott. They
are about all that is left of the old Democratic Party, the party that
once looked out for the poor and the working class. Send them a note of
thanks. They deserve it. And if you live in their districts make sure
you get to the polls in November. They did not sell you out.

“We had two take-it-or-leave-it
propositions and the second one was worse than the first,” Kucinich
said, referring to the plan that came loaded with pages of tax cuts.
“Tax cuts are antithetical to a bailout. We never solved the problem.
There were never any hearings on the bill. This premise, that we could
prop up the stock market with a $700-billion investment and create some
liquidity, was flawed. The problem is that banks do not want to loan to
each other. It is not a liquidity problem. Banks are afraid they are
going to collapse in short selling. There is a war going on between
security firms and banks. Banks are under assault. They are not
loaning. The dynamic is driven by the Accounting Standards Board, the
Securities and Exchange Commission and the Fed.”

The root of the financial crisis, as
critics of the bailout plan point out, is that millions of homeowners
cannot pay their mortgages. The bailout, as the market decline on
Friday following the vote illustrated, does not address the crisis. It
solves nothing for the 10 million Americans who face foreclosure. It
solves nothing for the growing numbers of unemployed and underemployed.
It may well be the equivalent of tossing $850 billion of taxpayer money
(including $150 billion in tax cuts) into a furnace and watching
passively as our economy continues its plunge.

“We face a perfect financial storm,”
Kucinich warned. “The elements are the deficit spending for the war of
3 to 4 trillion dollars, the trillion and more tax cuts, the war itself
and the lack of serious investment in the country. We are being
hollowed out.  We are going to see more unemployment and more people
losing their homes. With $700 billion we could have made a real
investment in the country, in jobs, in infrastructure and in homes.
Instead, we got robbed.”