It was fun to do Bill Maher's show this past Friday. Garry Shandling had the best line all night. "We should have sold the country ten years ago," Shandling said. "We held on too long!" Who knows if, after this election, we will find out that this exactly what has been done.
Has America been sold? If so, who sold it and what can a new administration do to buy it back? Will it really take another two or three trillion dollars to get us out of the hole? How can any future administration look the people of this country in the eye and say they can't find the money for, let's say, national health care or an Apollo project-like alternative energy push or free college tuition to qualified students?
The bailout is something so complex and has been foisted upon us so suddenly (Just a few weeks ago, who would have predicted a transfer of federal money this staggering and largely to the private sector?) how could we ever possibly make an intelligent, long range decision? More importantly, how could a band of dysfunctional, partisan cowards like this Congress make that decision? Where is someone sitting in front of a television camera, opposite someone serious, like Brokaw, telling us where we might be 90 days from now? Six months? A year?
Two things are clear. One is that the bailout represents the second and final payment by the Bush administration to their benefactors. The war being the first. Wall Street developed blindingly clever and frighteningly risky new ways to package debt and market it. No one in any position of authority in this administration did anything to stop them. To curb them. To regulate them. Now they want you and I to clean up the mess and they want to be paid to untangle it. Bush owes his political life to Wall Street. To Wall Street even more than the GOP's patchwork of whacked out creationists. Bush owed these people everything. Now, they have come to collect.
This bailout is as if someone blew up a meth lab and insisted he collect on his homeowners policy. But, if you have a meth economy, you pay. Our economy is so distanced from reality, that only a lesson like this and, sadly, more such lessons, will bring about the real correction we must digest. I have said it before and I will again. Major banks are failing. What other industries will seek bailout-like relief? A major airline will die. A major car manufacturer will die. A plethora of major retailers will die.
America cannot survive without capital and markets to manage that capital. The New York Times recently wrote "RIP Wall Street." Out of this, I hope will emerge a new and better financial market community that will remember these events as those who survived the 1930's recall those darkest, bitterest times. Wall Street is dead. Long live Wall Street.