Tuesday, September 23, 2008

The circle won't be broken

If you've been paying any kind of attention to anything lately, you know that the US economy has been rather down in the dumps (understatement of the year!). I've been dutifully listening to and reading the news, waiting for Kai Ryssdal's velvety voice to tell me what's up every afternoon, and trying to sort through what all of it really means. Fun stuff, oh yes.

I was a liberal arts major, so not exactly an expert on the financial markets, but I'm also a huge history nut and can't help but get this eerie feeling of familiarity from our current crisis.

I'm sure economic bubbles and their inevitable bursts go back even further, but I know that, at least during my lifetime, those bubbles seem to be all we've had. In the Reagan-tastic 80's, we had the savings and loan thing. That carried over into the 90's, but that decade also saw the growth and popping of the dot-com bubble. Now, we've got ourselves a debacle of monumental proportions to do with everything from investment banks, mortgage brokers, loaning institutions, and just about anything else you can think of.

It's a cycle of greed and deregulation, far as I can tell, and one that could (somewhat easily) be avoided if we ever bothered to learn from past mistakes. Thing is, you put a big pile of money in front of people and all common sense seems to fly right out the window. Republicans--or, more specifically, unbridled free market loving Republicans--surely bear the most blame for our current situation, having aggressively lobbied for a won increasing deregulation of the markets and financial institutions over the last couple of decades. Democrats, however, are not free from that blame heaping. Hoping to score political points and maintain some shred of legitimacy in a government primarily dominated by the opposing party for so many years, Democrats have given in on crucial issues time and time again.

And now I'm left watching and waiting to see what they do with this patently ridiculous plan put forth by Henry Paulson wherein he gets free reign over $700 billion in taxpayer money to bail out massive failing companies that, quite frankly, should have known better. This is all very strange, of course, because the very same people who are crying about the need to save these firms from bankruptcy and such are those folks who, until very recently, were the most vehement critics of government intervention in private business.

And hey, maybe my memory of my high school economics class is a little fuzzy, but isn't our capitalistic system supposed to be built on merit? That is, your business succeeds or fails based on how well you do/how good your product is--and should it fail, that's that. Survival of the fittest. How does propping up a company with a crappy business plan do anyone any good in the long run? Doesn't it just encourage further waste and create a drain on the economy? That's what I was always led to believe, but the world has gone topsy on me over these last few weeks.

What will be especially interesting (see: maddeningly infuriating) to watch is how those people primarily or at least partly responsible for this crisis (deregulators and strident free-marketers in both private business and public office) spin the situation to make them look like the good guys. If Democrats allow Paulson's obscene plan to pass, for instance, it's not at all unlikely that Republicans will then skewer and run against them for doing so--even though they're just as culpable for the mess.

And regardless of who ends up in the White House come January '09, they'll have been left with a shitpile of epic proportions--trillions of dollars of debt, an economy in shambles, an unpopular war, etc. etc. I'd much, much rather it be Obama who gets the job, but I sure don't envy what he'll have to deal with.

Kos at the DailyKos had this astute observation to make about the potential scenario:
So as Obama looks to invest in health care, alternative energy, education, and other Democratic priorities, watch Republicans suddenly become born-again fiscal hawks, oh so concerned about the nation's finances and the unfortuante lack of funds to pursue such initiatives. All of a sudden, they'll become the nation's staunches [sic] defenders of your money, even though they watched Bush piss away trillions over the past eight years with nary a word of dissent.
Funny how that works. I'll be happy to eat my words if that doesn't end up being the case, but I won't hold my breath.

Thing is, much of this could have been avoided--and that's not just hindsight speaking. Greater minds than my own have long spoken out against unbridled deregulation of the markets. We've had good laws governing how businesses can operate, but most of them have been cut down in recent years by the Reaganomics Ghouls in government who are far more interested in lining their own pocketbooks than they are in creating a better country for all of their fellow citizens.

And now that their policies are crashing and burning in one great conflagration of capitalism run amok, they expect the American People to fork over upwards of one trillion dollars to bail their asses out.

I say, dump the bosses off your backs! Hold your elected officials accountable, for Pete's sake--Republican, Democrat, Independent, whatever. Simply injecting provisions for the limiting of CEO pay will not make this proposal better or less insane. We must demand that any bail-out include re-regulation of businesses and the markets, checks and balances on those who we leave in charge of the implementation, and some sort of plan to make back the money we dole out.

In short, we have to do whatever we can to make sure this doesn't happen again.

This crisis has been looming for months (if not years), so don't let their calls of "Act now before DOOOOM!" fool you. Congress should take the appropriate amount of time to really examine this deal and make sure all angles are covered. This is far, far too important to just push through without debate or critique or revision. I'd argue that, in fact, it would be criminally negligent to do so.

This is the future of our country, our lives, that we're gambling with here. And frankly, I've never liked gambling. We need to get back to being a nation of sensible producers and innovators, reigning in the speculative, nebulous Wall Street shenanigans in favor of more solid, tangible endeavors.

This bubble's popped, and while we're still cleaning the shit out of our hair, I'd rather we didn't just shove another stick of gum into our mouths.

UPDATE TO ADD: I just read an article at Roll Call detailing the Bush/Paulson push for this bail-out plan to be passed as quickly as possible, and one paragraph especially stood out:
Fratto insisted that the plan was not slapped together and had been drawn up as a contingency over previous months and weeks by administration officials. He acknowledged lawmakers were getting only days to peruse it, but he said this should be enough.
So despite the months of "the fundamentals of our economy are strong" coming from the White House, Paulson and the like, they were aware enough of the situation to come up with this massive spending plan "just in case". That seems...I dunno, fishy? But then, this is the same tactic the Bush Administration has been using since day one: hatch crazy plan, implement plan, plan goes to shit but refuse to admit it, wait until last possible second and then call for a new crazy plan to solve the old plan's problems (and insist it must be passed right now or there will be dire fucking consequences), lather, rinse, repeat. The folks at Firedoglake have an interesting take on this, too.

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