Trust – we don’t have it

Why is there so little popular support for bailout legislation?

Shortly before Congress was due to recess, the Bush administration sent Treasury Secretary Paulson and Fed chairman Bernanke to Capitol Hill with the message that the economic situation was so dire that the Treasury Department required immediate access to $700 billion to bail out the financial services industry in order to avert catastrophe.  The demand to Congress for legislation included language that, in typical Bush administration fashion, prohibited accountability – "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."  Congress was instructed to immediately pass this legislation. 

It has never been made clear to the American people that a huge bailout is the best possible course of action.  Nor has it been made clear what the consequences of a meltdown of the economy will be.  There have been vague allusions to the Great Depression, but most of us were not alive during that time, and many have no idea what it was, other than being a Bad Thing. 

Most perceive the bailout as rescuing the fat cats of the limousine class from the consequences of their own greed and recklessness, and most of us are loath to do so.  The demand for this bill was presented – with lots of pressure for speed and out of the clear blue sky – from an administration that only the week before had been touting the underlying strength of the economy.  The perception, then, was that this was just the latest hustle from an administration that had pulled this trick before – the run-up to the invasion of Iraq was in everybody’s mind.  The cost of mendacity is mistrust, and it looked like the Bushies crying wolf again. 

There is now widespread distrust of the Bush administration and its motives and actions.  Congress, too, which abdicated its oversight role and allowed the Bush administration to deregulate the financial services industry without let or hindrance, is not viewed with favor.  In fact, the finance sector (among many others) has contributed very generously indeed to members of Congress.  The influence of lobbyists on legislators is incalculable, and very few believe corporate interests have not heavily influenced this bill.  

The institutions that normally are seen as bulwarks are no longer trusted.  In fact, the only common ground that liberal and conservative voters have at this point is a deep distrust of government, Wall Street, and industry.  The repercussions of this lack of trust are just now beginning to be felt, and they will not vanish when the administration changes – lack of faith in our institutions has become a way of life for us.  Selling a distrustful and resentful populace on any remedy is going to be very, very difficult.