The Wall Streeters -- utterly unable to assess risk or control their own greed and cupidity -- have turned America into a socialist state, with the federal government now owning the largest two mortgage companies, an insurance giant and mounds of phony debt piled up by the madcap MBAs in the financial world. Imagine any Presidential candidate saying, "I want to nationalize banks and insurance firms." Perhaps our only socialist Senator was ahead of our time after all. He descries these bail-outs, but they will happen. There are campaign donations to be secured, along with Wall Street assets.
An ignorant Republican right-wing administration finally pushed America into the red column. Now we're red as in socialism, as in serious debt, but not as in Republican red state. Do the wing-nut talk show guys see what's happened to their country? The ghosts of Milton Friedman and Ronald Reagan must be spinning in their special place tonight.
It appears the Congressional Dems may try to move this bail-out socialism a little further down the scale, picking up a few of us who don't have six figure salaries or private offices. What can the YOYO economics supporters say now to stop socialized medicine which is forty years overdue? Or subsidized mass transit for those who can't afford Exxon's gas?
How can free marketeers (do not confuse with Mouseketeers, please) ever again suggest you put your social security into private accounts run by Wall Street? Speaker Pelosi is quoted as saying, "We will not simply hand over a $700 billion blank check to Wall Street and hope for a better outcome." Our financial geniuses are now recognized as fallible?
A great blog elsewhre on HuffPo outlines some of the imperative political changes brought on by this self-inflicted mutilation among the moneyed classes. And just as in the Depression of the Thirties, the reform mood is global. Australia's after the vulturous short sellers. Britain is going to clamp down on outrageous, unearned salaries for failed execs. Perhaps next we can reclaim a salary from a .235 hitter or the money fund manager who fails?
There are a few truths we need to stare in the face:
This financial crisis is the result of an elaborate, heavily camouflaged ponzi scheme. It was not a bubble, it was a flim-flam. Heads have rolled figuratively, but the crowd demands blood and prison time for those who promulgated this fraud. How about some capital punishment for capital killers. Ken Lay found a way to to escape but this time the suspect list is miles long.
An out-to-lunch President and regulators who don't regulate need to be impeached, removed, run out of town. Why have tar-and-feathers fallen from favor?
In pretending that markets self-correct (even if you ignore all the dead carcasses that line the path to true market freedom) we set up the pitchers to call balls and strikes. Those with the most vested interest in cooking the books were those issuing the quarterly reports. So "assets" were created from smoke and a hall of mirrors. Shocked, I tell you, shocked.
We have pauperized our nation, most especially our government. The American dollar is looking more and more like a xeroxed hand-out. Sovereign funds and wealthy overseas investors will snap up bargains all across America. Think we could sell New Orleans to somebody? Or maybe a few miles of Galveston beachfront property?
Got a 401K? You ans I will feel the biggest pain, with no bailout for us?
$17.6 trillion, that's how much Americans had in their 401Ks at the end of last year. It's a lot less than that now. Over the last five years the S&P index shows a gain of about 5% per annum. But since the start of the year it's down more than 10%. This will have a very nasty, depressing effect on American shoppers and vacationers and diners and drinkers. "Depressing" shares the root word with "Depression."
What's missing from all the MSM stories about how crucial it is to save Wall Street from its excesses? Any number representing the amount of money lost by individual Americans and their 401K "savings." They aren't retirement "savings" at all, the 401K is just another subsidy for Wall Street's careless gamblers. Double down, America, you're playing against the house.
The voluntary retirement age in America just jumped about five years, even if this thing gets no worse. As Americans examine their 401Ks and realize losses of 10% or more, then find their homes worth another 20% less, they will begin to calculate college costs for the kids, money needed to survive retirement and inflation, and decide they must continue to work the salt mines. I found one major 401K provider still projecting 8% annual growth on their front page. Pants on fire. American kids, meanwhile, may decide to emigrate to China, or skip college altogether.
The quality of life for many American workers is now back to 1920 levels. Unions are largely kaput. Work rules fading. Barbara Ehrenreich has documented this trend already. Courts generally rules for the owner, not the minion. I recently heard one airline employee explain she works sixteen hours but is only on salary about 40% of that time. She's a flight attendant who's only paid when the plane's in the air. This is our America, 2008 vintage. We've become a nation of Wal-marted worker bees. So let's hope Congress not only bails out those companies who gambled themselves into disaster, but perhaps spread a little largess to the taxpayers who are really being taxed this time.
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