March 2008. What a month! If you had written a movie about the Bush White House -- no one would have believed it yet here we are.
strike one
After years of obvious and unsustainable behavior, we finally witnessing a complete meltdown of our financial system and housing. The canary in the coal mine is Bear Stearns. Teh poison gas is cheap money and the morgage-backed security.
At the end of last year, we had a "credit crunch" because of the process of turning mortgages into bonds. Bear was a leader in this financial wizardry and they profited handsomely from it. Then in Q4 2007, the world woke up and admitted it wasnt such a good investment after all.
The shares of Bear fell and the experts assured us the worst was over. I even considered buying shares of Bear in Dec/Jan. (How dumb was that.) Fast forward to March and from Friday to Monday, Bear shares fell from $150 to $2 and a buyout was announced by JP Morgan. What?? Out of the blue, a total meltdown.
How could this happen so quickly? So suddenly? Most of all, how could this happen with the FED orchestrating it? Why on earth would the federal government reward unscrupulous speculators?
Suddenly the small-government-dont-tax-me-free-market evangelists like Bear are getting a bailout from the federal government. It appears to be the ultimate fast one, the ultimate financial joke on Americans.
Tax payers pay for all the risk when things go bad and the bankers get all the profit. Even the purchase of Bear's assets by JP Morgan while the Fed assumes all of Bear's liabilities stinks to high heaven. That is 100% NOT how the free market is supposed to work. In fact, things are so upside down and confused its like an alternate reality sci-fi mini series...
And the revelations keep coming. The truth is we still dont know much about the details nor is it clear why the middle class should foot the bill for the wealthiest 1% when they screw up. Every day, I find myself aghast. Again.
strike two
If financial market debacles arent enough for you, we also have the Iraq occupation. Go on YouTube and watch interviews of Donald Rumsfeld telling us that the "war" would cost $50B. A few government analysts predicted $300B -- and got fired for the trouble. Oh it seems so quaint and jocular now.
A few years later, economists say well actually, it will be more like $1,000B or $1T. A year after that and we have more estimates - $2T to $3T!!! $3,000B of your tax dollars. An inconceivable amount of money and it went to pay for... what exactly?
"The Three Trillion Dollar War: The True Cost of the Iraq Conflict" by Joseph E. Stiglitz, Linda J. Bilmes
We didnt get any free oil. We didnt create freedom or democracy. We didnt make friends or even keep our old friends... We also didnt rebuilt New Orleans, repair our own crumbling public schools or worn our bridges or put fiber optic networks into every home for the "information economy"...
strike three
A third major Bush Administration contribution to the world is also shaping up in March -- global warming. A giant ice sheet in Antarctica has now crumbled away. Glaciers are melting everywhere and our government still has a policy that says global warming is not real enough to actually do something about... gosh no, that might be expensive. Better wait until someone else is president.
you're out!!
Wow.
Bush wanted to go down in history. It seems pretty clear that he will.
And yet there are no riots in the street. No calls for impeachment. No nothing. We as a country are lining up and happily bending over. It is just bizarre. Think about the protests in the 1970's and compare that with the business as usual experience today. The people who do complain are "left-wing nuts". There isn't even a national consensus on whether or not we have problems let alone any unified moral outrage. (It's not just tax dollars after all. We have killed hundreds of thousands of people in Iraq - an we NEVER talk about it.)
vote with your wallet
Who do you think is going to pay for all these things?
Do you think cutting taxes is going to pay for the $1T in losses when the housing bubble finally resolves itself? Or Iraq?
We seem so removed from our own condition these days. Oh sure, you are broke, you borrowed all the home equity you could and spent it on a vacation, a new TV and a BMW... but dont worry, you will get our economy going again with more shopping...
And dont get me started on "accountability" or "individual responsibility". Republicans have preached for years about "responsibility". We shouldn't have welfare!! People should be responsible...
Well I dont see anyone lining up to pay the check for any of these crisis. I dont see anyone lining up to pay MORE taxes so we dont have to borrow so much. I dont even see any Republicans talking about how to fix these things with the next president. Apparently when it comes to your mistakes, accountability is synonymous with total denial.
Perhaps our voting system would garner a lot more attention and responsibility if we paid for our choices. After years of Bush Tax Cuts, I would like to see Congress enact the Bush Tax. If you voted for the president in 2004, you should be personally responsible for any debts he acquired since then. Just send the money in with your tax bill. If you didnt vote for him, why should you have to pay for him?
Maybe we can apply market forces to our political process and attempt to get the people who spend the money to pay the money. Then again, we would probably put Bear Stearn's in charge of the plan and screw it up.