How Much Worse Can It Get?

Think $700 BILLION (that's right, I said BILLION) out of YOUR wallet will repair the damage done by the corporate rapists on Wall St? I doubt it. Every financial institution in this country is lining up with their hands out waiting their turn. If you doubt it, just look at what has already happened. And what no one is talking about is that this plan relies on every other country who is in the same financial handbasket with us to roughly the same thing. Which may be the biggest problem this country faces. Our financial meltdown will cause markets worldwide to collapse right along with us, and those other countries may or may not have the resources OR the desire to just use their citizen's paychecks to buy tons of worthless paper amounting to hundreds of billions of dollars in debt. This bomb has not yet exploded. It's just lying there in the middle of middle of Main St. waiting to go off, and the damage will be lateral.

The problem, as I see it, is that we will continue to allow Republican administrations to prop up failing industries and financial markets by calling all their debt "evidence of growth" or some such nonsense, and giving them every incentive to continue "growing". Bush was determined to prop up the housing market throughout his economically disastrous reign here because every other American industry was clearly in the dumper. As long as he could continue saying that new housing starts were on the rise, it didn't matter that everyone buying all those overpriced homes was doing so with "creative financing". No person with a lick of sense thinks it's okay to get creative with the numbers, but Dubya thought that was a great idea. Right up until that house of cards collapsed anyway. Then he declared that it was obviously the fault of irresponsible buyers. McCain agreed up until recently. Obviously that line is not what the homeowners want to hear, so now all of a sudden he's a populist with a deep concern for all those little people who don't own 7 homes valued at over $1,000,000 each. As opposed to Obama, who is clearly an elitist. But no matter. We'll leave the little Pooh brain out of it since he's already admitted that he doesn't really understand economics. Although it's deeply frightening to me that so many Americans just hate politicians who are smarter than Bubba - this is Obama's biggest problem. He's smarter than the people being polled and they just resent the hell out of that. Personally, I want the guy running the economy to have an IQ that actually registers on the scale, but that's a whole separate blog.

What I find interesting about the current situation is that Treasury Secretary Henry Paulson has been put forward as the best and brightest mind available. He may well be. The former CEO of Goldman Sachs would be one of the engineers of the disaster, so who better to actually understand what has happened? I certainly trust the fox to guard the henhouse. And sure enough, his plan calls for turning Goldman Sachs and Morgan Stanley into banks so that they will have access to FDIC insured deposits. But they would never simply blow through that wealth and then collapse. Oh no. Of course not. It's not like there's a history there. They are among the most altruistic institutions on the planet, dedicated to preserving the wealth of others. Yep. That's how we got here. They were right on top of that ideal. So we surely don't need anyone looking over Paulson's shoulder or questioning his decisions.

Does anyone remember the name of the guy who created the accounting scheme that allowed Columbia S&L to shift their debt into the assets column in the run up to the Savings & Loan scandal of the 1980's. You remember - that was the disaster and taxpayer bailout that permitted guys like Neil Bush to run off with millions without so much as explaining himself. Remember the financial wizard who engineered that scheme? No? Does the name Andrew Fastow ring any bells? That's right. Andy Fastow. Same guy who, after all the smoke had cleared, went to work doing the same magic for Enron's books right before they robbed investors clear across the country of all their life savings. But I'm sure that was just an honest mistake.

Yes, I'm sure it was. And why am I so sure? Because rather than send that vicious little prick to death row for his crimes of economic violence against the entire nation (and it was a lot bigger than just robbing their pension funds - it included playing fast and loose with their energy costs and causing the failure of 401K and mutual funds and stock market investments held by people who never even heard of Enron), Congress shook his hand and thanked him for all his "assistance" (read: squealing and finger pointing) and declined to impose even the maximum 10 year sentence he agreed to serve. He got a mere six years, with time off for good behavior. But I'm sure when he gets out he'll do much better job on Round 3.

Just like I'm sure that the financial wizards who have overseen this complete economic debacle over the last 8 years, while consistently telling us that everything was essentially just peachy, will do a much better job in the next few weeks. Make no mistake about it - this is Bush's last hurrah. His last chance to rob the few remaining dollars your grandchildren may ever earn and put it in the pockets of people who are already so damn wealthy they don't even know how many houses and cars they actually own. The same folks who insist that taking Social Security and playing the stock market with it will provide financial security that such disgustingly socialist taxpayer handouts can never provide.

Let's not forget that these are same people who truly believe that wearing a bracelet is better than wearing a condom. Just ask Sarah Palin's daughter about that.