A couple of months
back, it seemed quite obvious that the economy was on the verge of collapse, and something drastic was necessary, immediately, to forestall an absolute
disaster akin to the Great Depression. On this very blog, I recommended the bailout
plan be passed, albeit with many restrictions, and a much slower rollout than
actually occurred, so that the bulk of it could be handled by the new president. I had deep concerns with the fact that the Bushies would be running the bailout. But I felt as though something had to be
done, because the economy was falling apart.
I was wrong about
the need for a bailout, apparently, although I was right about the Bushies. And given that pretty much nothing serious has been done with regard to the bailout, and the economy hasn't completely fallen apart quite yet, you have to wonder about the
Seriously, is there
anything these people can't screw up?
The problem was
actually relatively simple. Over the last nine years, the financial industry
had been selling and reselling various financial instruments, and making a
boatload of money doing so. Unfortunately, it wasn't until the bubble burst
that these financial "geniuses" realized that none of these
instruments had actually been assigned a value.
Therefore, a large number of financial institutions have a truckload of
paper, but no idea of the value of these
supposed "investments." For
example, say you invested a boatload of money in Mortgage-Backed Securities.
When foreclosures hit record numbers, and home prices tanked, how much were
these securities worth? No one had a clue, because they were selling shares in
a basic pool of foreclosures, with the mortgages backing the poo having been cut into
pieces, and it was nearly impossible to determine how much the actual pool was
worth, let alone the securities backing it.
Because it was
impossible to determine how much of a bank's assets were tied up in these
securities, and how much these assets were worth, it was impossible to determine the liquidity of financial institutions. As such, banks were afraid to lend money to other banks, and the credit market pretty much shut down. Not good for an economy that runs almost entirely on credit.
So, Paulson's job,
basically, should have been to assess the current market, and assign a value to
these securities. Not a small job, but one that should have progressed to some
degree by now. Yet, we get news today that President Obama will have about $350
billion of bailout money available to him when he takes office. Now, that's
just under half, for those of you who are math-deficient. That means the
Bushies will have gone through $400 billion, while demonstrating almost no positive results whatsoever.And as long as the Bush Keystone Kops are in charge, there will be no discernible positive results from the infusion of $400 billlion of bailout money into the economy. (Not to mention the half trillion he's been feeding them from the Federal Reserve all along.)
Okay, so how can I
be so positive there will be no discernible good results with regard to the
To paraphrase James Carville, it's the ideology,
stupid. There is no way we should have entrusted that kind of responsibility
with the most irresponsible administration in world history, because they don't
worship God; they worship the false idol of "the Free Market." I mean,
just this past weekend, the Idiot-in-Chief told the entire world that the
economic problems they were all experiencing were "not a failure of the
free market system."
Seriously, we can't
rid of this moron fast enough. And if Obama decides to hold over Paulson, that
should be grounds for impeachment of him, as well. Watching Bush and Paulson is
like watching Laurel and Hardy, except that Laurel and Hardy were funny, and
this isn't funny. No one in this Administration seems to have any clue that at
the heart of this financial disaster are people; people with a family, a job
that's either gone, or in great danger, and a home that is in peril. All these morons can see is their friends
making millions of dollars, and the numbers on a spreadsheet. This wasn't an
emergency back when people were losing their homes. It wasn't an emergency when
banks suddenly stopped lending money for mortgages. It wasn't an emergency when
students applying for college were finding that the student loan money had
dried up, and they had to give up their dream of a college education, or at
least delay it, until someone with the capacity to care for people actually
This is the problem
with adhering to an ideology above all else. There was no way a bailout of any
kind could work while Bush was in charge, and we were silly for even thinking
it possible. They believe in the "Free Market" to the point of absurdity.
Of COURSE the "Free Market" caused all of this; there's no other explanation. In
the "Free Market,," ideology, it's assumed that each player in the market will
do what's best for the market, and not just what's expedient for him at that
particular time. The problem is, while many, possibly even most, rational
businesspeople will operate that way, a
few will not, and it only takes a few to screw things up for everyone. Not only
that, but rationally speaking, the only things a businessperson cares about is
the bottom line, and keeping up with the competition. So, when a few crooks
started making a lot of money with these new securities, and no one in the
government was doing their job and reining them in, rational, legitimate
businesspeople had little or no choice but to keep up.
See, that's the
government's job, as laid out in the Constitution. Yes, folks, it's in the Constitution; that's
how seriously the Founding Fathers took regulation of commerce. The government
is there to keep everything fair. Their job is to make sure that everyone is on
a level playing field. When the government abdicates its job, as was done for
the last eight years by the Bush Administration, and to a lesser extent, even
back into the Clinton Administration, with the Republicans in charge of
Congress, the less-than-savory elements of the corporate world end up dictating
policy. Think of it this way; if
independent mortgage brokers are making tons of money by scamming the system,
and no one in the government is performing the necessary oversight to prevent
it from happening, doesn't that necessarily create a climate where anything
goes? How are legitimate financial institutions supposed to keep up, if the
crooked ones are carrying a balance sheet that makes them look back, and
essentially sends investors elsewhere?
In order for a
bailout to work, the money must be accompanied by a lot of string. It's simply
stupid to give away so much tax money, while expecting nothing in return from
those who receive it. And yet, what else
could we expect from the Bush Administration? There was no way we could or
should have expected Bush and Paulson to hand the money to the banks, and tell
them what to do with the money. Instead, they gave them the money and
"trusted" them to do the right thing with it. That's why we're
hearing stories every day of employee junkets, extravagances, and even
executive bonuses; it's because they are changing nothing about the way they do
business, because they don't have to.
George W. Bush will
never do anything to fix the economic mess, except to throw more money into an
already jammed commode, and we shouldn't have expected him to. Do you know why
Bush and Paulson are so dead set against bailing out the auto companies? It's
because they know they would have to set conditions for the money, and that
goes against their religious leanings. They see all government regulation as
"interference with the markets," and they simply won't do it. So,
what happens when you have a financial market that is broken, and you hand tax
money to people who think they've been paying too much in taxes all along, and
think they know more than anyone else about business? Does it take a genius to
figure out that they're going to take the money, and do nothing to change their
methods of doing business? And what about the Bushies would even make you think
they would care if the financial services industry used the money to give
themselves bonuses, rather than use it to shore up the economy?
Face it, folks; we
tossed $400 billion down a rat hole; a problem that has been a hallmark of the
last eight years. They have been borrowing money, and throwing it at their
patrons for their entire administration, and there is no reason we should have
expected it to continue.
Oh, one final note;
the economy hasn't collapsed yet; have you noticed? I mean, it's in bad shape,
and a lot of people are hurting, but it hasn't collapsed yet. Doesn't that, combined with the ineffective
nature of the bailout thus far, seem to indicate that it was less of an
emergency than advertised?
What a shocker, huh?
The Bushies lied to us to end their reign of error and terror; imagine that.