Resentment Grows Over Wall Street Bailout Plan

Anger over the deal is expressed most sharply by people caught up in the home mortgage crisis and their advocates.

Resentment is growing on both sides of the U.S. political divide over a plan to use $700 billion of taxpayer money to bail out Wall Street firms with bad mortgage debt.

The disquiet comes from many voters on the left who see hypocrisy in the rush to help some of the world's richest firms when the government says there is insufficient money to spend on other priorities.

It also comes from some on the right, from people who say the bailout violates the principle that government should aim to limit its role in the economic life of the country and citizens, and that corporations should take responsibility for their actions.

Anger over the deal is expressed most sharply by people caught up in the home mortgage crisis and their advocates.

"Hypocritical? Absolutely," said Gabriel Onofrio, who negotiates on behalf of people in North Carolina who face foreclosure.

"When you have the free market and the privatization of profit but the socialization of the losses, that doesn't make any sense," said Onofrio, whose organization, the Neighborhood Assistance Corporation of America, argues that lenders should restructure home mortgages to make them more affordable.

Markets cheered last week when President George W. Bush asked Congress to approve a plan to enable the government to acquire up to $700 billion in home and commercial mortgages to stabilize firms by taking bad assets off their books.

The plan aimed to halt the worst financial crisis since the Great Depression, which has seen global credit markets seize up over concerns about the plummeting value of U.S. housing and securities based on home mortgages.

Architects of the bailout urged Congress on Tuesday to act swiftly or face dire consequences, and it was unclear whether any concerns expressed by voters would hamper its progress.

But lawmakers are sensitive to constituents, particularly in an election year. Republican Sen. Orrin Hatch from the conservative state of Utah said reaction to the plan from his constituents was "all negative."

That comment was echoed by numerous callers to conservative talk shows and a new website VoteNoBailout.org (http://www.votenobailout.org) also aimed to rally support against the legislation, which it said effectively enabled bankers to take the country hostage.

MONEY BETTER SPENT

The bailout should include provisions for people facing foreclosure in the form of long-term, low interest loans, said civil rights leader Jesse Jackson, an authority on the impact of the home mortgage crisis.

"You can't just provide benefits or bonuses for those who engineered the crisis and have a socialized bailout for them and leave the 7 million victims to their own devices," Jackson said in an interview.

Congress had mistakenly bought into a belief in "unleashed capitalism without checks and balances" and was compromised in its ability to oversee Wall Street because lawmakers took financial contributions from corporate donors, Jackson said.

The scale of the bailout also staggered many people who said that, while they understood the potential cost of an economic slump, the money could be better spent.

"We are talking about 700 billion dollars that could do wonders for all kinds of things that this country and the world needs, like universal health care or health care for lower income kids, or to stop global warming," said Lanya Shapiro, executive director of Traction, a civic engagement and leadership development organization based in North Carolina.

"Meanwhile people who for decades talk about the ills of regulation now want us to come to the rescue of these large Wall Street corporations," Shapiro said.

One aspect of the bailout likely to incite most resentment is the possibility that Wall Street firms could profit from the plan, said Cal Jillson, a political scientist at Southern Methodist University in Dallas.

"In times of great uncertainty like we're in now, the working class and middle class do begrudge elites sweeping big pots (of money) off the table," he said.