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.