Readers of this blog will not be all that surprised by the news over the last few days that over $18 Billion was taken by financial services company executives in bonuses for the stellar job they all did in 2008. It is just the kind of thing we have come to expect, which doesn’t mean it shouldn’t be criminal! At least the current President is on the side of regular people on this one, and seems to be just as outraged as we are at this unbelievable corruption.

Your tax dollars at work [detect note of sarcasm].

While we were all looking the other way, enjoying our moment of a victorious election, your U.S. Treasury Department has been cooking up more schemes to spend your tax dollars on bailing out banks. Today’s New York Times top story, misleadingly titled “U.S. Shifts Focus in Credit Bailout to the Consumer,” reveals Paulson’s strategy to continue funneling money into banks, and refusing to provide any relief for homeowners. He categorically rejects any use of the TARP funds for mortgage relief, and apparently has cut off talks with Sheila Bair, head of the FDIC, to provide homeowners with some real options.

But that’s not all. Now, Paulson says, in addition to propping up mortgage lenders, we are going to need to prop up credit card issuers. Paulson’s brilliant plan to help consumers is to “invest about $50 billion from the bailout fund into the new loan facility, with the aim of helping companies that issue credit cards, make student loans and finance car purchases.” In other words, your government intends to create additional capacity for credit cards companies to increase the “liquidity” they have available to extend more credit to us consumers. And then to guarantee the debt to the banks using our tax dollars.

Haven’t they been paying any attention? Is there anyone who still believes, honestly, that spending more money is the best way to get us through this economic downturn? On credit cards? Really? What are they putting in the water over there? This is the Secretary of the Treasury proposing this! It really would be funny if it weren’t so thoroughly despicable.

The only people who stand to gain from this proposal are the very bankers and Wall Street investors who created this whole mess. It seems as if the Bush administration is intent on pumping as many dollars into the coffers of their buddies before they leave office as they can possibly manage, leaving all of us to pay the consequences. This is truly an absurd idea, that we should make additional credit card dollars available, but we should absolutely refuse to provide any relief for people who are behind on their mortgage payments. I wish I could tell you how many of the people I meet with are having to decide whether to pay a credit card or pay their mortgage each and every month — more credit card debt is not the answer.
At least credit card debt is generally something I can help with in a bankruptcy case!

I’m writing this from Portland, Oregon, the site of this year’s national Consumer Rights Litigation Conference. The conference is sponsored by the National Consumer Law Center and the National Association of Consumer Advocates. There are about 1,500 people here, and all of them are working hard every day to make the world a better place for consumers — otherwise known as regular people who spend money, buy things, and pay debts.

The whole concept of consumer rights is one that may not be familiar to many people, since it encompasses such a broad, wide-ranging set of issues. Some consumer rights issues that you may have heard about in the news recently are toys from China with lead paint; food safety; the rising costs of health insurance; and of course, the mortgage crisis.

Until recently, many of my friends and colleagues didn’t really think the mortgage crisis would affect them. They didn’t have a subprime mortgage, and they were not behind in any payments. Most of them had purchased homes long enough ago that even when prices started to go down, they still had ample equity in their homes. A few of my older friends and my parents have already paid for their homes, and don’t even have a mortgage. I think everyone now realizes that this mortgage crisis effects every single American; indeed, it probably effects the entire world.

The good news is, there are more lawyers and advocates every day, in Seattle, in Washington, and all around the United States, who are working to help prevent mortgage foreclosures and fight back against unethical debt collectors and abusive lending practices. And what a remarkable group of people they are: talented, smart, hardworking people who are passionate about protecting consumer rights.

But there is so much hard work to do, in the face of years of deregulation and unbridled greed. We are about to have an election, and a new administration will take over in the midst of this huge economic crisis. So far, neither candidate shows much inclination to change the fundamental structure of the bailout or to take the sort of radical action that would be needed to stem the tsunami of foreclosures headed our way. A prominent speaker at the conference today pointed out that the last several years have been a period essentially marked by lawlessness, at least as it concerns our financial systems. If you think about what usually happens when a new sheriff comes to town to take care of the bad guys, it isn’t very pretty! We are in for some hard times ahead.

I’ll be writing over the coming week about what I learned at the conference, and what I think we should be asking our government to do about it. The road ahead is going to be hard, but we are a strong, resilient people, and we can make it better if we work together.