Sunday, September 21, 2008

Financial Meltdown - Unbelieveable

What a week it's been.

Is everyone else as incredulous as I am about the week's news? The US government, long the champion of free markets and deregulation being best for everyone, led by a Republican administration that styles itself as the champions of small government, has bailed out Bear Sterns, nationalized the mortgage market by taking over Fannie Mae and Freddie Mac, ponied up $89B to shore up AIG, and then promised to take on all the bad assets that were too radioactive for a rational investor to touch to the tune of $700B?

Each move was supposed to calm the markets and restore confidence, but the tonic never lasted more than a day.

I thought that Congress was the branch of government that controlled the purse strings. Now Henry Paulson and Ben Bernanke, neither of whom is an elected official, seem to be calling all the shots. Is this constitutional? Why aren't Congress and the Supreme Court weighing in on this?

George W. Bush must be hiding in a bunker, riding his mountain bike, or clearing brush somewhere. He's not much in evidence. I'll bet he sits silently in any meetings he's actually invited to. He's certainly doesn't appear to be a main player. Is this what degrees from Yale and Harvard get you?

Glass-Steagall was repealed in 1999 by Phil Gramm et. al, during the Clinton administration. Sandy Weill and his cohorts said we didn't need it anymore, so the wall between commercial and investment banks came down. We were so much smarter than we were in the 20's.

Eight years of Republican leadership have brought us to this. They actually controlled both the House and Senate for six of those eight years, so there's no one else to blame.

The Democrats have not distinguished themselves, either. Has there ever been a less effective opposition? I've lost count of all the times when they rolled over and died in the name of bipartisanship. From where I sit, there's not much difference between the parties. Democrats might be tax and spend, but Republicans are cut taxes and still spend. We'll have the largest deficits and overall debt in history at the end of this Republican administration. Our children and grandchildren will be left to survey the wreckage and curse their parents for what they've allowed to happen.

Henry Paulson used to be the chairman of Goldman Sachs. It feels like an inside job. The fix is in, and he can bail out all his cronies from Wall Street.

We can come up with three-quarters of a trillion dollars to bail out people who have been collecting bonuses that are more money than I'll make in a lifetime, but anything else is "fiscally irresponsible" or "liberal".

And all we can talk about during election season is Sarah Palin's hair, lipstick, and who's more of a Christian.

I simply can't believe it.

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