Bailing Out Billionaires

Ward Sloane is a CBS News producer based in Washington.
(AP Photo/Mark Lennihan)
To paraphrase T.S. Eliot's The Love Song of J. Alfred Prufrock, I am not an economist, nor was meant to be. I never did very well at math and naturally shied away from the more complex courses, beginning with calculus.

Calculus, however, is not needed to understand exactly what is going on these days between the Federal Reserve and Wall Street. Over the weekend, the Federal Reserve Board's Ben Bernanke announced another billionaire bail-out. This time he has decided the American people should take on $30 billion in potentially and likely bad mortgage debt so that JP Morgan could then assume the other assets of the formerly venerable Bear Stearns investment house. We get $30 billion in bad debt; JP Morgan gets Bear Sterns at two dollars per share.

Wow.

What seems to be happening before our eyes is the evolution of a national economic policy that puts the full faith and credit of the United States government behind Wall Street at the expense of the United States taxpayer. I am not really sure anymore who qualifies as your average taxpayer, but the person who isn't getting any relief from Mr. Bernanke's Federal Reserve surely doesn't include the family that earns somewhere between $50,000 and $100,000 a year and is raising a family.

What's that? Oh, right, I forgot: What's good for Wall Street will be good for all the little people who live on Main Street.

Here's what the Federal Reserve and the economic gurus of the administration think about the average homeowner facing sky-rocketing mortgage increases or worse, foreclosure: Too bad. Those folks made bad decisions and now should have to live with them.

I might point out that the so called "plan" unveiled by the administration late last week was all talk and no action. Advertised as the plan to make sure the mortgage crisis never happens again, it was actually nothing more than a lot of hot air.

The current economic crisis can be boiled down to this – the big bad boys and girls on Wall Street sold to a willing public the idea that it's possible to get something for nothing. This is voodoo economics coming home to roost. The voodoo went something like this: "you can buy more house than you can afford," " you can get lower mortgage payments if you only pay down your interest," and, "you can buy whatever you want by using the 'equity' in your house."

I generally don't have much sympathy for people who buy into this, but let's be real. Everyone bought into it and the economic boom times rolled merrily along.

The only difference, it seems, is that when Wall Street billionaires live beyond their means, they never have to pay the consequences when the house of cards comes tumbling down. The have the full faith and credit of the United States Government to back them. For everyone else it's just tough noogies.

And here is the endgame. The fat cats are reaping their rewards for the millions and millions of dollars they've pumped into the political system. Money talks, everybody else walks.

Where is the outrage?

You don't have to be calculus genius to know that there are people on Wall Street this morning making a lot of money on all of this chaos. I don't know who they are or how they're making their money but I think Mr. Bernanke could help figure out who these people are. If it's such a good idea to bail out Bear Stearns, great. Then it shouldn't be any problem to provide the American taxpayers with a list of the officers of employees of Bear Sterns their total earnings for 2007, salary and bonuses, actual and deferred.

After all, I'm sure Mr. Bernanke checked this out before he willingly handed over $30 billion.