Historian Howard Zinn has a piece in US liberal mag The Nation on this idea: Spend the Bailout on the middle class (if you think that’s an awful title, remember that when an American says “middle class” they mean “working class,”).
A simple and powerful alternative would be to take that huge sum of money, $700 billion, and give it directly to the people who need it. Let the government declare a moratorium on foreclosures and help homeowners pay off their mortgages. Create a federal jobs program to guarantee work to people who want and need jobs.
Government jobs programmes? Not so sure, for me it conjures up images of Victorian workhouses. The thing about foreclosures works though. If the banks are choking on “toxic debt,” then paying off mortgages seems to be the Heimlich manoeuvre people need. By contrast, putting more money in the hands of bankers must be the equivalent of blowing air down the throat of our choking victim.
Might work a while, but how long from choke to croak?
I also like this paragraph, which shows how long this kind of corporate dole scrounging has been going on for.
In his 1931 Harper’s essay “The Myth of Rugged American Individualism,” historian Charles Beard carefully cataloged fifteen instances of the government intervening in the economy for the benefit of big business. Beard wrote, “For forty years or more there has not been a President, Republican or Democrat, who has not talked against government interference and then supported measures adding more interference to the huge collection already accumulated.”