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 bailout?
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 took office.
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.
