I'm not the only one who thinks that the Bush
administration has been playing with the markets ever since 9/11, when
a series of terrorist attacks destroyed New York's nerve center for
international finance, the World Trade Center. And if you think it's
suspicious that planes nailed the towers while missing other empty
symbols of American power like the Washington Monument or the White
House, you're not alone. But that is for another, more controversial
essay.
Suffice it to say that the Bush administration may seem incompetent,
but they are fundraisers par excellence. It's certainly no
mistake that the Fed lowered their funds rate to practically nothing
under Bush and Greenspan, paving the way for the Great Hedge Funds
Fuckover of the New Millennium, which I covered in depth for AlterNet
target="blank">here and href="http://www.alternet.org/story/65037">here. And now that
Greenspan's successor Ben Bernanke has come out and cut another
quarter-point off, expect the trend to continue. The Fed's action and
Bush's recent plan to bail out subprimers share something significant
in common: They will have zero effect of the problems the American
economy faces hurtling into 2008. Just in time for the election!
Of course, I could give a long, Thillian (new word!) spiel on why
Bush's subprime plans sucks ass, but why? I've got a stone-cold
economist and a brainiac doom prophet to handle that for me. And you.
Thank the Big Bang for the internet:
target="blank">Spirit of the Season
[Jim Kunstler, Clusterfuck Nation]
The Hope Now Alliance is just a political sham. The purpose of it is
not to save the hapless occupants of over-leveraged houses, but first
to buy a little more time so that the worker bees in the financial
industry can justify awarding each other multi-million-dollar
Christmas bonus packages, and second, to postpone the 'workout' of all
this bad investment as far into the future as possible...Maybe all the
players really know that keeping the ship afloat until Christmas is
really the best they can hope for. Christmas means a lot in this
country. It represents all Americans' old hope that miracles can
happen. Bums turn out to be Santa Claus. Old curmudgeons are
transformed overnight into loving uncles. Angels save us when we jump
despairingly into icey torrents. And Goldman Sachs executives pass out
multi-million-dollar checks to the wizards who 'innovated' an
ingenious way for the rest of their country to commit financial
suicide.href="http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/12/spirit-of-the-s.html "
target="blank">MORE
Mr. Paulson's attempt to help investors, while doing little or
nothing for distressed and defrauded borrowers, might make sense if
his plan would reduce investor losses enough to seriously improve the
overall financial situation. But only a small fraction of subprime
borrowers will qualify for relief, and many of these borrowers will
eventually face foreclosure anyway. So the plan is unlikely to reduce
overall mortgage-related losses by more than a few percent, at most -
not enough to make any real difference to financial stability. Indeed,
interest-rate spreads that have been signaling a crisis of confidence
in the financial system didn't narrow at all when the plan was
announced. Still, you might say that the Paulson plan is better than
nothing. But the relevant alternative isn't nothing; it's a plan that
- like Barney Frank's proposal - would actually help working families.
And that's what the administration is trying to avoid. href=" http://www.commondreams.org/archive/2007/12/10/5736"
target="blank">MORE
As long-winded as I am, I am also in love with short answers. And they
are always around, even in labyrinthine mechanisms like CDOs and SIVs
and other acronyms for upper-class scams. So let's be frank about
this: The subprime trend was built to sell heavily structured loans
to suckers in order to skim bonuses off the top, buy mansions for the
suits who retire comfortably while the rest of the economy, and its
suckers, suffered the negative billions in blowback. That is it, that
is all.
Bush's plan to fix the problem amounts to little more than dampening
the impact for the suits, while screwing their victims. Why would he
want to help people without any money to begin with, especially after
he asked them to go back to shopping after they saw planes and bodies
fall from the sky? He knew then, as many of us did, that the global
economy had changed to the extreme, and that the attacks on 9/11 were
vast evidence for that transformation.
But the lone gunman theory works nicely when people just want to
cruise the mall, and href="http://www.nytimes.com/2007/12/09/business/worldbusiness/09oil.html?pagewanted=1&_r=1&ref=business "
target="blank">pretend that oil (or ice, for that matter) will be
around forever. That those who supply them with "the gas," as it was
called in the great sci-fi dysoptia href="http://en.wikipedia.org/wiki/Mad_Max_2:_The_Road_Warrior"
target="blank">The Road Warrior, are not the same people that
bankrolled their doom.
No, Bush and Paulson, once the head of Goldman Sachs -- who managed to
escape the subprime collapse with nary a scrape -- are no good at
fixing things. They are only good at fucking them up. For the suckers,
that is. For everyone else? They're gold, baby. Black and otherwise.