But who will save us from rescuers!
September 25, 2008 | It's enough to make your head spin. George W finally came out of hiding last night to say a few words about the financial crisis. Looking like a rookie news reader at his first try-out, Bush recited the words on his teleprompter in a near monotone. Most of what he said would pass for an Econ 101 tutorial.
Being president must mean you never have to say "I'm sorry," for those words never passed W's lips. The closest he came was a startlingly understatement of fact: "The market is not functioning properly. There's been a widespread loss of confidence. And major sectors of America's financial system are at risk of shutting down." Well, doh!
W was also careful not to let the word "bailout" escape his lips, referring instead to a "rescue effort" and a "rescue plan." In fact, I think this was helpful. Given the mood of the country, the word bailout is absolutely toxic and inflames the rage of ordinary citizens who envision $700 billion going to Wall Street and the same geniuses who got us into this mess. That notwithstanding, Bush was a week or ten days too late in getting out there, and probably nobody was listening to him anyway since he has exhausted all his credibility and the goodwill of the American people.
To the extent anyone was listening, my guess is they focused on all the fear-mongering in his speech. In an attempt to show why it's important to act, W probably just scared the bejesus out of most people:
More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.
In an earlier dark hour Roosevelt said, "We have nothing to fear but fear itself." Bush's speech amounted to "We have nothing but fear."
Adding to the drama, John McCain "suspended" his campaign to rush back to Washington to solve the crisis. Never mind that he has no institutional role in the process, not being a member of any of the relevant Congressional committees working on it. Never mind that he is so far out of it that barely a week ago he was telling us that the same economy was "fundamentally strong." It was a political stunt, pure and simple. He wants us to think of him as a knight on a white horse coming to rescue the damsels in distress. Bush, of course, created a role for him by calling a summit of sorts at the White House to include the two candidates. Wouldn't you like to be a fly on the wall at that meeting? Just what's needed — adding more political fuel to the fire.
Of course, by maneuvering both Obama and McCain into this White House summit, Bush nicely gives himself more political cover, since he can pass off any responsibility to the candidates. He is enhancing his own irrelevancy, so to speak.
Although I get that we have a crisis, I'm not sure that it has to be solved this week. The old saying "Marry in haste, repent at leisure" seems applicable here, because the rescue plan — or bailout if you insist — will marry us to another humongous debt (over $2000 for every man, woman, and child) added to an already enormous debt ($9,795,549,839,894 more or less).
The premise everyone seems to be operating from is that the system is collapsing because all those mortgage-backed securities investors are sitting on have lost value. The Bush bailout plan wants to attack that problem by buying up the distressed securities, allowing everything to go back to normal. But normal is the problem!
The prevailing mindset seems to be We have to do something. Anything!
But if the underlying problem is that those securities don't have value, instead of removing the securities from the system, why not try to restore the value? Supposedly they've lost value because too many people aren't paying their mortgages and are going through foreclosure. How about fixing the mortgages? If somebody can't pay their mortgage because the interest rate has gone too high, lower the rate so people can pay. I know I may be simple-minded, but simple often gets the job done when complexity causes everything to grind to a halt.
The whole situation has become surreal. The headlines on the front page of WashingtonPost.com tell you all you need to know about how far divorced from reality things are. Today "stocks shoot up" but "GE slashes outlook," "manufacturing orders fall," "new home sales plummet," and home "prices tumble." Once again Wall Street is a giant casino, betting on the "rescue" while fundamentals continue to crash. All the more reason to take a closer look.
There's a good reason for so much opposition to the government plan, such as it is: nobody has explained it in plain English. Here's an outline, free of charge.
Rescue Plan FAQ
I. Who are we going to rescue?
Be sure to explain why this is the right group to rescue and who is not going to be rescued
II. What are we going to do?
KISS - Keep It Simple, Stupid. 1.... 2.... 3....
III. Why will this work?
Be specific. If we do this..., then this will happen..., and so forth
IV. What if it doesn't work?
There had better be a Plan B, since we know how well all those Plans A worked out.
V. What's in it for you?
Describe this in terms of the positive results that will come from following the plan, not all the dire consequences that might follow from not doing it.
We have every reason to be sceptical. The monkeys that have been running the zoo for the last eight years are the same ones making this plan. As Jon Stewart said on The Daily Show, Paulson "never saw it coming." Check out the full interview of Paulson on FoxNews where he tells us everything is hunky-dory.
Last updated on Apr 13, 2018