Are You One of the Angry Majority?
A few minutes ago, Congress passed the bailout, and the confused and psychotic market, which had been up for the day, started coming down. Tell me if you can figure out this particular iteration of its dementia. I can't. Maybe we'll all just agree from this point on in that the Market is not subject to rational understanding and leave it at that. I'll tell you one thing. I don't ever want to see another PowerPoint presentation on the subject of how the economy and the Street conform to certain rational metrics. Phooey.
Anyway, this puts to an end the period of extreme emotional upset that I was feeling about what I perceived to be a wholesale disaster -- the rejection of the bailout by a confused and vengeful House. A tsunami of comments poured in to my blog on the subject at www.stanleybing.com. Some agreed with me. A lot of people -- a surprising number, given the gravity of the situation -- didn't. This observation, from Steve in Charleston, West Virginia, was one of the most pointed and eloquent. "Sorry, Stanley," he wrote, "but I'm not scared. Not even a little bit." He went on:
Out here in the hinterlands where small business deals in cash rather than debt, local companies are not hurting. Banks are not folding. It's harvest time and life is good. In fact, once the Schadenfreude at the demise of Wall Street has a chance to kick in, life couldn't get much better.
There are quite a few of us out here who hate, loathe and despise everything that Wall Street has become, and we're even less enthusiastic about Washington. The only politicians who apparently understand that are the ones who voted against the bailout. As far as we're concerned, Wall Street can go to hell, and then maybe the rest of us can get to work on restoring this country to what it was before Wall Street slimed it.
There was much more of the same from a lot of people. Several things are clear from this. First, that many people's hatred of the institutions that run our economy and our government is greater than their fear of societal collapse. Second, that public desire for vengeance at this time outstrips any empathy or concern they may have for the impact that this crisis may have on their fellow countrymen. Third, that a lot of folks believe that our economy can get along without the securities market and those who "manage" it. And that, finally, at this time in history, pretty much everybody has a solidified position on just about everything, and that any situations and facts that may intrude on their lives simply fortify their existing points of view.
So if you're a Democrat, you feel the current crisis speaks to what the Republicans have done to us over the course of the last eight to thirty years. And if you're a Republican, in spite of the fact that your party has been in power for a long time in all three branches of the Federal Government, you blame liberals, Democrats, oligarchs, and big-spending government hotshots for our dilemmas. If you believe that regulation is necessary to keep crooks and nitwits from running the show, you still believe that. If you think the "free markets" should operate, wherever those might be, you feel even more strongly that you are right.
So events do nothing to moderate or change anybody's point of view. This is kind of depressing for all of us, I think. It's hard when you see something dramatic happen and think "Aha!"... and then find that your adversaries are shaking the very same news in your face triumphantly and saying, "Oho!"
I, on the other hand, am a flexible fellow. I've been looking at my initial opinion and trying to decide where I was wrong. A lot of you are very persuasive.
See, I thought that a widespread panic leading to tens of thousands of job losses in the financial sector were bad for not just Wall Street, but the nation that has trillions of dollars invested there.
I thought that a banking system in free fall, draining the FDIC of all its resources and ultimately placing all our savings and checking accounts at risk, was detrimental to everybody, not just the fat cats who have screwed everything up.
I thought a limit on the executive compensation at firms applying for a bailout, and assistance for homeowners who might be forced to default on their mortgages, was good. I see a lot of you disagree. Many of you seem to have an image in your mind, when you hear the word "defaulting home owners," of rapacious, greedy losers who never had any intention of paying off their mortgages. In fact, there's just as much anger out there, it seems, against those people who got themselves in over their heads as there is against the aforementioned fat cats.
Anger, that's the ticket. Everybody is very angry. Angry at Wall Street, of course. Who isn't? Angry at banks and loan officers and those who took advantage of a system that recruited them as good credit risks when they weren't. Angry at Bush. Angry at Paulson. Angry at Pelosi. Angry at Freddie and Fannie. Angry at the victims. Angry at the perps.
They say anger can be cleansing. Maybe I should just relax and get with the program. In a couple of months, we can all wake up and see upon what beach this wave of ire has delivered us, and see how many innocent have been washed away with the guilty.
Until then? We now have a bailout. Let's the howling begin anew.
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
See Jane Devin's Profile
The anger over the bailout comes in an environment where massive corruption in the financial industry was not timely addressed, and which resulted in a proliferation of predatory lending. It comes at a time when credit card companies are punishing consumers with automatically increased interest rates for being as much as one day late on their payments, driving already strapped consumers farther into debt.
Further, the consumer protections that were part of the original bill were removed in the legislation Congress passed -- and in its place? Millions of dollars in earmarks.
To hear, as we did today, about AIG's excesses after an $85B bailout validates in grand fashion the concerns that many working class and middle class people share, and further sparks the anger.
Lastly, when the public's phone calls to Senate offices were running strongly against this plan, the majority of Congress acted against their constituent's expressed wishes. While you may imbue Senators and experts like yourself as having a better grasp of "the big picture", and therefore qualified to overrule public opinion, the bare bones fact is that this bailout -- the most expensive economic gamble in U.S. history -- is just that: a gamble.
At a time when Americans are suffering economic hardships, including the stagnation of their salaries, loss of jobs, massive debt loads, and foreclosures, they deserved to be heard -- and they deserved to be protected, not just in this gamble, but all along.
The purpose of the bailout is to reward irresponsible behavior and keep the rich people rich. Period. How much more can President Cheney and Puppet Bush ruin this country?
and those repugnantcans are just so against socialism.
This is socialism for the rich/elite. But he-ll no will there be any darned socialist health care...
I have seen this coming for years, but no one would listen to me. I am just a mere citizen. It used to be that our representatives listened to citizens, but now they only listen to lobbyists. It used to be that the media would listen to citizens, but now the news is censored by the monopoly that owns it. Go to the Justice Department? Not a chance. That has been politicized. And forget about the executive branch; now that it has imperial power, it's no longer a "branch".
There was a time when I was so worried about our future that I would check the internet about every two hours to see if anybody impeached Bush yet, but that didn't happen either. Things just proceeded, and the ordinary citizen, the one who had a career, worked hard, got a couple of degrees and several certifications, saved money for retirement, paid off a house and a car, did everything right, --- that person had no recourse at all for dissent, so things just proceeded to the demise of all of us.
I guess I will call myself a "former citizen" now, since all my avenues for dissent have been closed and I have no representation. I used to think I had changed from being a citizen to being just a mere consumer, but now that all my money is gone, I can't be that either. So now I guess I'm a formerly financially secure person, living in a formerly great
- Amid the turmoil and tumult of battle, there may be seeming disorder and yet no real disorder at all;
amid confusion and chaos, your array may be without head or tail, yet it will be proof against defeat.
- Simulated disorder postulates perfect discipline, simulated fear postulates courage; simulated weakness postulates strength.
- Hiding order beneath the cloak of disorder is simply a question of subdivision; concealing courage under a show of timidity presupposes a fund of latent energy; masking strength with weakness is to be effected by tactical dispositions.
- Thus one who is skillful at keeping the enemy on the move maintains deceitful appearances, according to which the enemy will act. He sacrifices something, that the enemy may snatch at it.
Sun Tzu - The Art Of War
the market went down because the bailout made no sense initially, then was 'augmented' with $150B in pork.
I'm angry, but I'm no less scared that my friends will lose their homes and their jobs, nor am I convinced that Wall Street fat cats won't pull down billions of dollars in bonuses and they leave dying companies next year instead of this.
When W came on tv after the bail out passed the House, I held my breath waiting to hear him tell us to go shopping like he did after 9/11. He didn't, but I am sure he wanted to.....som
The fact is that the 2/3rds of the economy depends on consumer spending and consumers aren't going shopping for anything but food and gasoline for the rest of this year and the better part of next. Wall Street is going to have to pull themselves up by their bootstraps without our help.
I'm angry because I know that this bail out isn't the last and that it won't prevent recession or depression in our economy.
aig has already drawn down $61Bil of the $85Bil
Rather than throwing $700 billion at billionaires on Wall Street to try to "fix" the immediate problem (loads of bad mortgages, non-liquidity, etc) from the top down which the Paulson plan does, why not do it MUCH more cheaply and fix the immediate problem from the bottom up?
I say give EVERY AMERICAN $1 million dollars. There are something like 360 million of us so that is at a cost of a mere $360+/- million dollars instead of $700 billion. It doesn't even cost the $50 billion per month that Paulson claims he actually needs!
Give all American men, women, and children $1 million dollars. Those with bad mortgages will immediately pay them off. The bulk of the rest with good mortgages will pay them off. Many will spend on stuff and help kickstart consumer spending, demand, etc. The idiots will spend it all unwisely and end up where they started, but that's tough and their own fault. Nonetheless, the bad mortgages will be gone cheaply and quickly. A lot of money would flow into stocks, bonds, and savings. This would dump a bunch of liquidity into the markets at street level rather than at the rarified elevations of Wall Street criminals and robber barons. Those criminals that invested heavily in bogus "financial instruments" that not even Warren Buffet understands would take a bath (tough crap). Do that and re-regulate the crap out of the financial sector. There...fi
Um, $360 million spread among the US populace gives us $1 each. It's them pesky zeroes again. To give us each $1,000,000, you multiply:
360,000,000 people
X 1,000,000 $ each
----------------
360,000,000,000,000 or $360 trillion. Makes the bailout look cheap. And the price of a double latte would probably zoom right near that million bucks as inflation took off big time.
Not that I think the bailout will do anything beyond make some rich people even richer. It may be true that the government has to do "something
Thank heavens...
You're also right about Booosh with his hair ablaze...m
Why couldn't the "gov't"...
And come ON People...L
Please calculate the total amount to buy all mortgages. We would have to pay for ALL of the bubble at once.
There is nothing wrong with ARMs, by the way. You just have to understand what you are doing. We have one of those. Saved us tons of money.
See above. A simple payment of $1 million to every American (man, woman, child) would fix the mortgages instantly. Every person with a bad mortgage would pay it off. People with ARMS that haven't killed them yet would pay them off. Money would flow into stores, groceries, boutiques, etc, as people started spending their million. Kids would have a million bucks in their savings to cover college and get them started after graduation from college.
It doesn't have to cost even a fraction of what Wall Street or banks say it would take. MOST people don't even try to buy million-do
I'll break it down: Our "representative" government is a plutocracy, the foot soldiers to the banking elite, "national" and international. Wall Street greases the wheels. The Federal Reserve is the strongarm of the international cartel.
They all want the New World Order. What president hasn't mentioned it in the last four presidencies? None.
"Allow me to issue and control a nation's money and I care not who writes its rules!" Amshell Rothschild.
The Art of War: Divide and Conquer. This is who the votership has become...s
This very bailout is one of the most brutal assaults to our civil liberties, liberty, freedom, and peace. "Do nothing" would have been the correct thing to do - bring on a corrective recession and be done with it.
But, they instead dump trillions more of fiat currency into our weak system, devaluing the dollar and bringing on hyperinflation which will lead to a depression.
It is evil. The United States of America is a rarity in history, with a constitutional republic, and we should all come together and take our country back.
Since the 1960s Washington has been forced to gull its citizens and creditors by debasing official statistics: the vital instruments with which the vigor and muscle of the American economy are measured. The effect, over the past 25 years, has been to create a false sense of economic achievement and rectitude, allowing us to maintain artificially low interest rates, massive government borrowing, and a dangerous reliance on mortgage and financial debt even as real economic growth has been slower than claimed. The corruption has tainted the very measures that most shape public perception of the economy, the montly CPI, the quarterly GDP and the monthly unemployment figure.
The deception arose gradually, at no stage stemming from from any concerted scheme. There was no grand conspiracy, just accumulating opportunisms. And the political blame for the slow piecemeal distortion is bipartisan - both DEM and Repub had a hand in the abetting of the political dishonesty,
reckless debt, and a sasino-like financial sector.
Even despite any statistics, the standard of living of all Americans is tremendously higher than it was 20, 30, or 40 years ago. From the average size of a persons house, to the number of cars they own, to the amount of traveling (particularly flying) the average American does, and massive amount of consumer goods and services available, to the number of restaurants and other places you can eat, to cell phones, TVs, computers, high speed internet, texting, itunes, etc Americans vastly better off than ever before.
Maybe that is true for some. Also, many goods and some services became very cheap in recent years. For one, Asia manufactured at a low price, and lower real wages of workers and the inflow of immigrants made menial services affordable. So, from a certain point of view, this is correct.
However, compared to twenty years ago, the country just does not 'look' good anymore, if that is any indication. There are more homeless people, and the infrastructure in many places looks rather decrepit. Also a surface feelilng of violence (e.g. the acceptance of torture by many) has crept in that is quite worrying. So, judging from this, by comparison and on instinct, things are not good, and they weren't even before the criris hit.
October normally is a skittish month for the market, no matter what outliers occur. October represents the end of a yearly quarter, when a majority of corporations report their third quarter earnings. September 30th also was the quarterly expiration date on options. And, election years always add to October volatility, as October is debate month. Add the bailout plan to the mix, and extreme volatility is in the cards.
But, October is infamous for Wall Street, and there are many superstitious people who work and play there. The 1929 crash occurred on Thursday October 4. That was Black Thursday, the beginning of a depression that lasted until 1941. Then there was the nosedive the market took in October 1973, a dip that lasted for one full year. Then, before last week, the largest drop in Wall St. happened on 19 October 1987, when the Dow plunged 508.32 points, losing over 22% of its total value.
This is how much the markets have grown since 1987 - the largest POINT DECLINE in the market to date occurred last week, when the Dow dropped 777 points as the House denied the bailout. But, the percentage decline only was 6.98 percent, smaller than the fallout in 1987. The growth can be good or bad...if it's based on solid investments, it would be a sign that this country is prosperous. But, since it based upon bad debts and scams, it means that it isn't worth the paper our money is printed upon.
"So events do nothing to moderate or change anybody's point of view."
No? Please turn on the election coverage this November and compare to four years ago.
You will learn just how wrong you were.
More and more people reject the utterly false idea of a functioning two party system, KTM.
This bipartisan theft of $700 billion dollars is just more proof.
When Obama was one of the key players in coercing Congress to accept this criminal bill, singing in perfect harmony with Bush McCain et al, it is clear that nothing will change next month.
Keep on working those talking points though, nice work if you can get it. How's the pay?
How is this a theft of $700 billion dollars? I can't believe that a lot of folks think that.
Well, if you vote for a third party, you are doing the GOP a favor. Which, I suppose, is just what you want, right?
:-)
No. Not really. I am mostly amused. That's typically what happens when you have an "I told you so!" moment.
Why would I be angry? I did not lose any money except for the inevitable devaluation of the dollar. And that I am prepared for. I won't lose my job and if I will I can start my own business the very day with 0 investment necessary. And if I did exactly nothing I could buy groceries for years to come.
Now, America, you have to ask yourself, were you in the same position when you were screaming
"Four more years!"?
I seriously doubt it. So now live with the consequences. But stop whining. The noise is disturbing my sleep.
The dollar would have went go down more going forward without the bailout because the value of the dollar is mostly determined by relative economic strength. If the bailout did not happen, the US economy would turn out to be much weaker than otherwise and the dollar would would weaken in kind.
The dollar will weaken any which way. I agree. So I am not particularly upset about that, indeed.
"There was much more of the same from a lot of people. Several things are clear from this. First, ... Second, ... Third, ... "
When opposing the bailout, are these the only concerns that people can have? Are there no legitimate ones?
A straw-man argument is still a straw-man argument even if it is broken down into a subset series.
This was our "lame ducks" October surprise. Orchestrated right down to the minute, with gigantic sways of the market and not just making it Wall Streets problem, but the genius of making the entire country complicit. We have been spared for the day, but when the log rolls over, we're all dead. Right? Wasn't that the goal here? I think all those Ivy league genius's should learn how to drive a Taxi.
Why couldn't we take our time to plan this? Ask you and Geroge Bush! it was a masterful stick-up of the American people--by the way, Joe Shmoes little loan is a very small part in this, derivatives, hedging, long, short,...a
No need to get paranoid. Things always happen for a reason. This one happened because Americans do not understand the meaning and consequences of the compound interest formula. It's very good that it didn't happen three months later or we might have had to endure four more years of banalities from failed ideologues in charge of things they don't want to understand.
There is a derivative tusnami on the other side of October coming at us and it will be the mother of them all. paranoid? more then that, I am scarred s#%$less!
I think W was hoping this would blow up after he left office. He probably could have done something and I suspect he saw the writing on the wall, but he didn't want to be remembered for bungling the wars, katrina AND the economy.
Aside from it being a money grab, it doesn't help McCain at all. Further, it pretty much disposes of the entire "Reganomics" theory of financial management that has guided Republicans for several decades. It's going to be tough to argue that no regulation, balloning deficits and low taxes on the rich really results in a stable economy.
The only bright spot I see in all of this is that our Democratic Congress and Democratic Whitehouse won't have to even argue with the few Republicans left standing. They will be able to take drastic measures to improve the working class standard of living and regulate the financial markets without interference. I expect we will see a lot of changes that undo the damage of the last 8 years in the next 3.
You must be logged in to comment. Log in or connect with
