I’m back from vacation and although I went to Washington DC and New York, vacationing has a way of unplugging me from day to day events–so now, back in my usual routine, I feel more connected to events in DC and NYC than I did when I was there! Go figure.
Anyway, I’ve spent a bit of time catching up on the credit crisis and the bail out. This thing is complicated and knowing what to do amounts to picking an economist to trust. I’d suggest the list of economists in my blogroll—and they are generally suggesting passage of the bill now before Congress or something like it–as the least worse approach now possible.
The economics may be muddy, but one thing is clear. The American people have gotten a very strong message from this episode: the high rollers on Wall Street are utterly craven, greedy, fools. Think about it. The wealthiest people in the history of the world–Wall Street investment bankers—are asking for government help. Yes, these would be the same people who recommend rough and tumble capitalism not only for its wealth-building capacities but because of its wonderful character-building capacities. In a capitalist economy, we are told, everyone learns to take personal responsibility.
And, of course, this “philosophy” has translated into a very successful political movement that has preached the same sermon to the electorate for 40 years with very solid success. Now the high-priests of the movement are asking for government help.
And the word “asking” doesn’t quite convey the tone of the request. Given the situation some people thought Secretary Paulson might beg forgiveness for his poor stewardship of the economy when he appeared before Congress last week. Or offer his resignation, suggesting that perhaps the former CEO of a Wall Street investment bank (Paulson was at Goldman Sachs) shouldn’t be the one leading a publicly financed bailout of Wall Street investment banks. Some people thought that–given the seriousness of the situation—he might attempt to build political support for his plan before presenting it on Congress. But, no, the plan was so ill-conceived members of his own party were leading the opposition.
So his proposal to Congress didn’t look like request at all; it looked like a ransom note. Give me $700 billion or you’ll never see your economy again, he seemed to say. And don’t think about getting the coppers involved.
As I say, the economics may be complicated, but a four-year old would have no trouble understanding the outrageous unfairness of it. And Americans were pissed.
But let’s get real. When major banks are failing, there has to be real problem. It’s the credit world equivalent of Katrina, and it demands a federal response. Unfortunately we have leadership with zero credibility and apparently even less ability to develop and present a plan. Paulson’s performance could not have been scripted better to make the finacial world look bad. Jeebus. These are the same people who choreographed Bush’s landing on the USS Abraham Lincoln in San Diego and multiple other state of the art events of political theater? Help me. I think Bush has lost interest in governing and wants to go home.