Since late last week, I've wanted to write a detailed piece about America's economic train wreck. But it's been hard with timing, etc. -- last night I was quite busy with a straight-up Q-and-A piece for the Daily News (read it here if you must) but the real reason has been the same internal struggle that I suspect most Americans who've followed this story are probably feeling. That struggle between the rational-brain side that says, "Let's do this thing and do it right and get it over with," and the emotional side, which wants to scream:
Don't do it!
I mean, who could not be angry about a situation where taxpayers -- the majority of us who have done nothing wrong here -- are bailing out the short-sighted and often immoral actions of Wall Street and their political buddies in both parties. And what do we get in return? That we might -- emphasis on the word "might" -- just barely steer clear of the Great Depression II? U-S-A, U-S-A?
But we have to do this thing, right? If we don't do the bailout, we'll be cutting off our nose to spite our face. How many Americans will lose their jobs if this house of cards collapses? For example, I and a lot of folks that I care about work at a company (Philadelphia Media Holdings, maybe you've heard of it?) that borrowed millions to buy to the Daily News and Inquirer and is frequently dealing now with bankers, so a Depression/credit crunch could wipe out my job -- and I'm sure many of you work for businesses in a similar boat. Would you pay $6,000 in extra taxes over time to save your job? Sure. Would you be happy about it?
We call this a bailout, but what it really is, is a death. It's the death of America as the world's economic engine -- assuming that we'll even be "fortunate" enough to get China and the world's other cash centers to lend us the dough this time around. You know, it's a cliche now to talk about the five stages of death -- denial, anger, bargaining, depression and acceptance -- but that's because so often this theory seems so apt. Ever since the era of Ronald Reagan, Americans but especially our leaders have been in Stage 1, deep denial, that we can borrow and spend our way out of every problem, and deal with the consequences down the road.
And now, a few folks like Hank Paulson want to jump to Stage 3, "bargaining," as if there's a relatively painless deal to get us out of this.
Not me, and not most of America. We're stuck on Stage 2 -- "anger," and it's going to stay that way for some time. It's not just the relative hopelessness of the situation -- that the only choices are an economic depression (isn't that Stage 4?) or a huge bill, mainly paid by our children who had nothing to do with any of this. It's that Americans know now we have nobody who will fight for us.
True, it's a conservative philosophy of ridiculously unfettered free markets that helped get us into this mess, but you can't pin all of this on the Republicans, not this time. It's been the Democrats who've been the Mini-Me of big business run amok for more than a generation now, capped off by a massive deregulation of the financial industry in 1999 that was authored by a top advisor to John McCain (Phil Gramm) and signed into law by the man out there stumping now for Barack Obama (Bill Clinton).
As Jimmy Breslin would say: Beautiful.
In fact, nothing makes me more angry than turning on the TV and learning that the "leader" of the fight to make this bailout slightly more palatable to the average American is Sen. Chris Dodd, who should have surrendered any and all moral authority to touch this issue the second that it was revealed that he received a sweetheart "VIP" mortgage from troubled lender Countrywide Financial, even as thousands of his constituents struggle with the pain of foreclosure. But then, who has any moral authority? Hank Paulson, who came to Washington from the heart of Wall Street and now wants to bail out his friends on Wall Street with our money?
These people have no moral standing...and no shame.
And what can we do about it? Not much. In six weeks, you can go to the polls and vote for the party that gives Wall Street everything it wants, or the party that gives Wall Street almost everything it wants. Or you can go form a true people's third party -- and spend hours of time knocking on doors and signing petitions to throw the bums like John McCain and Chris Dodd out of Washington and replace them with representatives of the public, and not the corporations. Good luck with that while you're working overtime to keep your job and pay off your mortgage.
And you can stay angry about it, and hold onto that stage for a while. I know I will.
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Wilford Brimley is French? Who knew?— Bud Fox- "Peace and Prosperity" might be a little optimistic. I wonder if the Republicans are still pushing to extend the tax cuts to pile even more debt on our children. Don't you remember when they would try to insist that Reagan proved that deficits don't matter? And now they think they know an easy way out. Well there isn't. I don't think anybody is even certain that the $700B will put a stop to the bleeding. It seems that nobody can really quantify how much bad debt is out there, and you can bet that there will be a lot of fraud because of that uncertainty. I think that was why that infamous passage about the Chairman's decision being above review was put in. Not necessarily out of malicious intent, but because of the likelihood of overpaying for debt laden securities. And while all of this preoccupies us, we have to realize that there are national security problems that continue and you can bet that in Tehran, Leisure suit Larry is laughing his behind off, and in Moscow, Putin and Medvedeev are savoring this too.— SteveMG
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- If it was just "home ownership" at fault, the problem wouldn't be so big. It got out of control because The bad securities were bought and sold and leveraged, magnifying their actual value. Sort of like the margin trading way back when stock prices were actually worth only a percentage of their price, the securities being passed around are only worth a percentage of the price. I don't know exactly how the values of these securities were established (for trading purposes), but that seems to be the primary source for the bubble underlying the financial system.— SteveMG
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Well, if America has fallen from it's perch as the world's economic engine, then the left has got it's wish. Pumping a trillion dollars into an ailing market is not allowing it to correct itself as it naturally would is just asking for trouble down the road. Who is going to learn tough lessons if they know they'll be bailed out. Now the market can't correct itself, and the government leviathan grows exponentially. That's a lose-lose for all of us.— jmc- I agree. end of story. If i could do something I would..but common people have no voice anymore.— OgieOglethorpe
- jmc, that doesn't make any sense, even by your low standards. It seems that the right is not only advocating the bailout as well, the administration os trying to force a vote before taking the time to consider the measure. Did it ever occur to you that if the market does indeed correct itself, which I admit would be more desireable than a bailout, the post correction state may not serve our national interests? This bailout may be our chance to have a say in the outcome, because in our fiscal condition (remember our $50+ trillion in unfunded liabilities?) we're not exactly in a position of strength.— SteveMG
- Gibba, I THINK the issue had to do with mark to amrkewt accounting. In other words, these securities were worth whatever the market said they were, thats why there were multiple rounds of write offs and losses.— RG
- Will - disappointed in your column today - you failed to point out real cause of this economic crisis. In all fairness - the law that Clinton signed in 1999 was only to remove the barriers to combining insurance and financial businesses. The regulation laws were still on the books and were Never Enforced by Bush & Co. Bush and DOJ could have prosecuted anyone on Wall Street for everything from Mortgage Lending Fraud to many SEC violations - but the Bush SEC, Treasury, and DOJ - DID NOTHING to prevent this - on purpose.— pal
"Well, if America has fallen from it's perch as the world's economic engine, then the left has got it's wish." . . . . . . It's not nearly enough, jmc. We want your wives and daughters, and your guns, too.....preferably from your cold dead fingers. Capisce?
Will Bunch, a senior writer at the Philadelphia Daily News, blogs about his obsessions, including national and local politics and world affairs, the media, pop music, the Philadelphia Phillies, soccer and other sports, not necessarily in that order.
E-mail Will by clicking here.
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