Friday, September 26, 2008

Financial Crisis 101

Time for a $700 billion (and that's just the STARTING figure) bailout, we're told.

What a lot of people miss in all this is:

1) the "banking system" referred to isn't the issue in this crisis--commercial banks are already well-regulated.
2) this "crisis" didn't spring up overnight (see the previous post).
3) this plan ENDS independent investment banking by NATIONALIZING the remaining investment banks (the others are now under commercial banking regulation)
4) this plan STRIPS the power of controlling the purse strings from Congress and hands it, WITHOUT OVERSIGHT, to the Secretary of the Treasury (appointed by the President and needing no Senate confirmation)
5) this bailout expands the government's actions to the INSURANCE industry (AIG).
6) this is the latest "we're in a crisis and must act immediately to take extraordinary measures" tactic Bush used to sell his invasion of Iraq (which had nothing to do with 9/11 or WMD) and the subversion of the Constitution under the Patriot Act.

Of course, he passed those when a Republican Congress rubber stamped his idiocy. I hope the Democrats have the balls to reign him in this time. Yes, the financial mess is real, and yes, something, unfortunately, must be done--but it DOESN'T have to be rammed through immediately with this false sense of urgency. The credit markets will be fine as long as something is in the works. Let's take the time to get one right, for once, and yes, the people fleeced under the usury-like mortgage practices deserve at least a chance to make good on their debt and keep their homes---THAT will be better for the country, its people, its lenders--and its economy.

How much longer will the sheep voluntarily line up to be slaughtered?


Wednesday, September 24, 2008

Can McCain handle multiple responsibilities?

John McCain announced he'd suspend his campaign, asked Obama to do the same, and called for postponing Friday's debate.

If a man is unable to address the business of the day and carry on his obligations, then how is he going to handle the job of president?

This financial "crisis" (and I have an economics background, so I readily get how severe this could get) didn't suddenly spring up---it's been building from years of ignoring the problem for political expediency (yes, from both major parties). If it only now needs someone's attention, that person is clueless about the U.S. economy.

We've known for a century that an industrial economy cannot place blind faith in Adam Smith's agricultural model. The unregulated 19th century led to exactly the monopolies T. Roosevelt started to address. C. Coolidge proclaimed "the business of America is business," and when his successor ignored the written plea of a thousand economists, the market crashed in 1929---taking "non-market" people with it. Eventually, FDR introduced regulations to pull us out and better manage the economy.

From there it's been a free ride. Economic booms were wasted. Then suddenly Reagan told us everything was simple again, and that morning in America, Adam Smith rose from the dead, unable to address the realities of an industrial economy. So the largest creditor nation became the largest debtor nation in just eight years, and the market crashed again in 1987----along with a Savings & Loan scandal resolved at the expense of the taxpayers.

Then came the largest peacetime expansion in the history of the U.S., and deficits turned to surpluses. But we were too worried about Clinton getting a blowjob to pay attention.

So more deregulation, under the fantasy that all deregulation (and any tax cut) is good. The Treasury will magically create the money. Osama bin Laden attacked the U.S. while the Bush Administration was asleep at the wheel. Then they used that tragedy to slam through the neo-com agenda of more deregulation, stripping away Constitutional rights, and starting a war by lying about its connection to 9/11. Bush made Osama a success by insuring the attacks would indeed undermine U.S. financial interests. We're spending a fortune, we've sacrificed our rights, and Osama is untouched.

So our deficits are soaring, with no end in sight. We're still pretending we don't need to address Medicare and Social Security, even though doing so now will prevent the next crisis. We spend more on health care than any other nation, but we don't have health care for 25% of our citizens---so we pay instead in the emergency rooms.

And now, after almost eight years of Bush, we face another financial crisis, again in banking, and while people lose their homes, even more money is stolen from taxpayers while we're told we must keep taxes low on the wealthy.

Yet Warren Buffet is a Democrat. Go figure.

People need to stop voting against their own interests.

And McCain needs to be a man and have a debate he knows he can't win---and can't win for good reason.