The biggest current event still making the news is The Economy. Just in case you’ve given up watching the news, yep, its still bad.
If the Wall Street shocks of last week weren’t shocking enough this week we have the proposed “cure” I had been fearing. The head of the U.S. Treasury, Henry Paulson, is proposing that he and his department be given an open account of $700 Billion of tax payer money to buy up bad debt from Wall Street in order to stabilize the economy. (Here is a link to a ‘fact sheet’ available on the Treasury departments web sight that explains what he proposes.)
This will supposedly free up banks to keep lending money to each other just like they have been and life as we know it will continue like this was all a bad dream. Unless of course this DOESN’T fix it. Or if the Treasury can’t ever make the money back on all the bad debt they buy. In which case they will have gambled away America’s future. Call me a chicken, but I doubt I would put the cash from my checking account on the line to buy the junkiest stocks on the market. But I’m frugal that way.
As of this afternoon though it is looking like Congress will approve the proposal. There are a few people in congress who seem to be keeping their heads on enough to at least ask a few good questions before rubber stamping this thing. Rep. Defazio (D-Oregon) spoke today about the issue. Maybe this bail out has to happen but I am glad to know that at least one of our representatives is asking serious questions now before it is too late. I hope that Congress doesn’t cave to the pressures of Wall Street and the White House to let this bill pass without putting in place a few restrictions rather than letting one man go on a $700 billion shopping spree at Wall Streets Dollar Store.
At this point everyone is screaming it doesn’t matter HOW we got to this place we just have to FIX IT! For me I would really like to know how it happened and how to keep it from happening in the future. And just maybe in a perfect world some of the people and companies that committed the most outrageously bad deals will get their come comeuppance. For now though I’ll settle for more information. There is a good interview from BIll Moyers Journal on PBS with Kevin Phillips. His book is BAD MONEY: RECKLESS FINANCE, FAILED POLITICS, AND THE GLOBAL CRISIS OF AMERICAN CAPITALISM. I haven’t had a chance to read it but would like to. From the interview it seems he is very honest and clear that this is not a case of the Dem’s are at fault or the Rep’s are at fault. BOTH parties have laid the groundwork for our current crisis over the past 30 years as we shifted from a Industrial based economy to a Financial based one. Just as soon as I get a library card I will be picking this one up… goodness knows I can’t afford to BUY a book and I’m afraid of credit! Oh no! Maybe I’m at fault for the failing economy?
Which brings me to my last point. Today the talking heads on the financial news channel CNBC have begun shifting in tone. It was subtle, but today it seemed as if they were trying to move some of the blame for this problem to the American people. That the public enjoyed the booming economy by taking such outrageous advantage of the unprecedented glut of easy credit by, gasp, buying houses and cars that run. Or taking their family’s to Disney Land. And dare I say that the selfish citizenry believed it when they were told they could have a bigger limit on their credit card to buy into the vaulted American Dream we have all been told is ours for the taking. But now the credit is drying up and we have no right to just blame the powerful Wall Street movers and shakers who have made MILLIONS of dollars, bought dozens of homes, and flown in private jets to private islands. The American Public and the New Super Rich finally have something in common: a gigantic reality check.
