The Battalion
2 •OPINION*
Tiursdc
Thursday, November 29, 1990
U.S. socializes costs of S&L losses
It turned out that Reagan and Bush
were socialists. Yes, they were socialists,
in a sense, in the worst sense. Most
socialists socialize gains, but Reagan and
Bush socialized the costs of the savings-
and-loan plundering. As conservative
commentator George Will explained,
“We seem to have a capitalism here in
which profits are private and we
socialize the losses.”
Through Reagan’s and Bush’s highly
deregulated savings-and-loans policy,
the government helped rich S&L
owners take (steal) billions and
socialized the costs of the whole
financial orgy. In other words, the
taxpayers gave the S&L owners and
their friends a lot of money.
How much is it going to cost us? Only
$500 billion or more over the next few
decades. That’s about three complete
yearly budget deficits or about $2,000
from every single American man,
woman and child.
Before mass deregulation, S&Ls were
highly regulated institutions that were
owned and operated by community
people. They made loans to families to
buy houses. They attracted mostly small
depositors who were insured for up to
$40,000. And, when an S&L began to
lose too much money, it was
immediately closed down to minimize
losses.
This system was changed by
legislation and executive commands
from the Reagan administration. Some
of the most crucial changes made are
listed below:
• Increase of the federal depositors
insurance level from $40,000 to
$100,000.
• Allowing developers to own S&L’s.
• Allowing S&L owners to do almost
anything with depositors’ money. They
could even loan money to themselves.
The owners managed to steal and
squander billions of dollars.
• Allowing more freedom for S&L’s
in setting interest rates. The S&L’s
attracted more money to steal and
squander with the higher rates.
• The firing, replacement, shutting
up and deliberate ignoring of S&L
regulators and the covering up of the
growing S&L problem. If the dead
S&L’s were forced to close in 1982, it
would have cost taxpayers nothing.
Even as Ed Grey, head of the Federal
Home Loan Bank Board (FHLBB)
from 1983 to 1987, warned of a growing
S&L problem, Reagan, Bush, Regan
Irwin
Tang
: —ait-
Columnist
(treasury secretary) and certain
members of Congress continued to tell
him to shut up.
Reagan never mentioned the S&Ls in
public. Though Bush knew of a huge
problem, he didn’t mention it until after
the election. They even managed to
ignore Silverado, Neil Bush’s little mess,
until after the election.
Thus, we’ve learned the hard way:
the best and easiest way to rob a bank is
to own one.
Molly Ivins called the S&L debacle
“the most massive transfer of wealth
from the poor to the rich in our nation’s
history.” And every two-bit politician
and their speechmaker vows that such
transfers will never be allowed to occur
again and that the S&L mess will be
cleaned up soon. These statements are
funny.
First, the Bailout is going at a snail’s
pace. Of the FBI’s reportedly 7000
major bank fraud referrals, the Bush
Justice Department selected only 100 in
July for priority investigation.
Furthermore, the investigation and
further implication of S&L fraud is
being slowed —possibly sabatoged by
the director of the Office of Thrift
Supervision, the notorious M. Danny
Wall. He was one of the main culprits in
committing the S&L heist of the 80’s.
Deregulation was his big idea, and he
kept the whole affair hush-hush until
boss-man Bush could get elected.
The investigations should be carried
out quickly to recover as much money as
soon as possible (most of the $500
billion bill is interest), and M. Danny
Wall should be kept out of any position
in government.
Second, there may be more bailouts
to come if we don’t act. The federal
depositors’ insurance level should be
returned to its old $40,000. If someone
has more than $40,000 to deposit, he
can put some of it in another bank.
Some experts are predicting a
commercial bank disaster similar to the
S&L one. Lowering the federal
insurance level can minimize the
damage.
Third, such poor-to-rich money
transfers, the socialization of costs of big
businesses, the subsidization of super
rich money makers by the often-
unknowing taxpayer has been going on
for decades in America.
Some of the more grotesque transfers
of money from poor to rich occur as a
result of Big Business’ scourging of the
environment. Big Business makes Big
Profits while ruining the environment.
Meanwhile, taxpayers and society as a
whole pay for the clean-up of their
poisoning. What we don’t clean up
causes cancer, illness, and wilderness
destruction.
Farm subsidies hardly protect the
small farmer, as they continue to lose
their farms to the Bigtime farmer.
Instead, the farm subsidies mostly
benefit those who do not need them.
Most of the subsidies go to the
wealthiest quarter of all farms. Most of
these “farmers” make over $100,000.
Federal farm subsidies cost the
taxpayers between $10 and $20 billion
and consumers an additional $ 10 billion
in higher food costs. Let us at least
direct the subsidies to poorer farmers
and use some of the money to help
failing farmers adjust to nonfarming
work.
Government protection of the sugar
industry costs consumers $3 billion
every year, according to the U.S.
Department of Commerce. Because of
the protection, sugar producers pick up
$260,000 each in extra profits every
year.
Ranching and mining companies
make easy money from the federal
government by taking advantage of the
below-market prices charged for use
and abuse of public lands. Mining
companies extract public gold from
public land without paying any
royalties.
This is a wicked type of system we
have here. We let capitalism and its
forces push the price of labor so far
down that working people go hungry or
homeless. But the same people who
scream “Let the free market work its
wonders!” will set things up to
guarantee huge profits for little work
for people who do not need the money.
Let’s clean up the S&L mess. And the
rest of the mess.
Irwin Tang is a junior political science
major.
Opinion Page Editor
Ellen Hobbs
845-3314
A&A
]Mail Callt
Alcohol abuse, bonfire don’t mix
Cj
EDITOR:
Over the past several years bonfire has become one of the most controver
sial traditions at Texas A&M University. Some of the controversy focuseson
aspects of bonfire over which there is little consensus, such as its size, location
and existence. However, there is one aspect of bonfire that almost everyone
needs to be concerned about — that is the abuse of alcohol.
Last year produced the first coordinated effort to reduce alcohol abuseai
bonfire, and it brought some outstanding results. Problems which jeopardize
the continuance of bonfire such as disruptive behavior, related injuries, litter
ing and vandalization of property were reduced by about two-thirds.
Nonetheless, we are far from our goal of eliminating the effects of alcohol
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abuse. The tradition of bonfire remains in danger. The greater success of ngacdvitie
curbing alcohol abuse, the less pressure there will be to eliminate bonfire.
Furthermore, when visitors from the community and elsewhere attend
bonfire we want them to see the enthusiasm, unity and camaraderie the bon
fire and Aggie spirit are all about. Getting stone drunk does not convey this
image.
While we realize that many of the people in such a state aren’t Aggies
there are those students who still have the mistaken notion that getting drunl
at bonfire is a sacred tradition. There is, however, a long-standing traditionof
limiting alcohol on campus. We are one of the few major universities in the
nation that doesn’t have a student lounge where alcohol is served. There has
always been a certain respect for the dignity of the University itself that has
limited the presence of alcohol on campus. That respect should extend to
bonfire.
In recent years, we came close to losing bonfire, and it was due largely to Kver an iss
alcohol abuse. If you choose to drink, please do so after and away from bn- vp we woi
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fire. Please keep alcohol from shattering the tradition.
Ty Clevenger
Student Body President
Kyle R. Jacobson
RHA President
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Graduate Student Council President
Kimmie Bennett
Pan-Hellenic Council President
Donella Schmidt
Panhellenic President
Jonathon Whittles
Corps Commander
Darren Smith
I.F.C. President
Matthew Wood
MSC President
Allow nations to develop technology
EDITOR:
Lately I have been bombarded by reports that Saddam Hussein is“only5
years” or “only 3 years” away from having a nuclear weapon, and of reportsof
his dreaded chemical weapons arsenal. Americans seem to feel a need to pre
vent any nation but our own from having the capacity to develop nuclear and
chemical weapons.
Most nerve gases are very closely chemically related to fertilizers, and al
most any fertilizer plant can be converted to produce large quantities of nerve
gases. Blistering agents and simpler, less effective nerve gases like hydro
cyanic acid require almost no technology to make. Many types of chemical fa
cilities could be altered, with difficulty, to make dangerous agents. Are we
going to prevent third-world nations from educating chemists and engineers
and from building chemical industries because they have the potential to
make chemical weapons? Any Organic Chemistry professor could design a
synthesis process for nerve gas — it doesn’t take much technology.
Nuclear weapons are harder to make, but can we deny developing nations
access to cheap, clean nuclear energy because they might use it to make
bombs? Are we not going to allow other nations to educate and train brighl
physicists and metallurgists because doing so constitutes a threat?
No nation has the right to tell another what technology it can possessor
what areas it can research in. By denying developing nations access to the
technology and knowledge that can make nuclear and chemical weapons, we
are denying them the technology and industry needed to maintain their econ
omies and to raise their standard of living.
As to the argument that other nations are not responsible enough to have
these weapons — who can name the only nation to aggressively use nuclear
weapons?
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Be quiet in library quiet areas
EDITOR:
This letter is for all you inconsiderate and rude students who seem to be
lieve that any area in the library you choose to desiginate as a group study area
is a group study area.
There are areas on the third and fourth floors of the Sterling C. Evans Li
brary which are specifically designated as groups study areas.
Contrary to popular belief, the Current Periodical department is not a
group study area, but a quiet area, or, as the library would have it, a “Quiet
Zone.”
Impolite people, inform yourselves. You have the third and fourth floor
group study areas, the first floor reference area, and the student lounge on
the second floor of the library. There you can voice your opinions and
thoughts aloud without disturbing the students who need peace and quiet to
study. Please have some consideration for your fellow Aggies!
Vivian Rojas ’91
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The Battalion
(USPS 045 360)
Member of
Texas Press Association
Southwest Journalism Conference
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Cindy McMillian,
Editor
Timm Doolen, Managing Editor
Ellen Hobbs, Opinion Page Editor
Holly Becka, City Editor
Kathy Cox,
Kristin North,
News Editors
Nadja Sabawala,
Sports Editor
Eric Roalson, Art Director
Lisa Ann Robertson,
Lifestyles Editor
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