Bailout Is Vile But Necessary
Like John McCain, I'm no great expert on the economy, but I have this message for Congress:
Make sure to use your leverage; demand that the government gets some on the back end in case of a recovery; see to it that executive packages are severely limited; negotiate in a tough way and make sure we have total oversight ...
And then vote for the bailout. Quickly.
I say this not because I like the idea of the $700 billion bailout (and if you think it's going to be limited to $700 billion, then I got a bridge in Alaska to sell you). I hate it. I hate the idea of bailing out the same greedhead criminal Wall Street goons that put us into this mess. We shouldn't let them slink off with their multi-million dollar bonuses sitting in their bank accounts; we should arrest them and put them in prison. Malfeasance, fraud, racketeering -- throw the book at them.
But don't let your anger at them keep you from saving yourself. The fact is that this bailout isn't really for them; it's for us. The banking system IS the economy. The banks go down, we go down, and we all know it won't be pretty if that happens. You know all that money you think you have in the bank or in the money markets or in CDs or bonds? It's not there. It doesn't exist. It's, drum roll please, debt. And right now it's toxic debt. The whole system is a little more than a scheme based on all of us playing along. If the system is shattered, well, we're not talking about mere tough times anymore. We're talking about ... man, I don't even want to get into it. You can dream up your own Mad Max future.
Don't think that this crisis is made up; it's real as hell. The financial system is truly racing off a cliff. Because I try to listen to the smartest people I can find, people like Jack McCabe and Nouriel Roubini, I've known this was coming for months and, if you ask my wife, she'll tell you I've been talking about it. Too much. When I wrote about it in March, I thought then we might be headed for a depression rather than just a recession. Now I think we're on the verge of calamity. Hell, I'm not even going to tell you what I've been thinking; it won't help the situation at all. I'll just say that we're in it. Deep.
Washington Mutual went down last night. That's not something made up by that lying sociopathic son of a bitch Hank Paulson. I trust "Helicopter" Ben Bernanke a little bit more, though he was incredibly slow on the take in this crisis. I'm not sure there was anything that could have saved our national house of cards from crashing, though. Our irresponsible credit-based economy has been heading for this crisis for a quarter century. It unfortunately began accelerating at a wild rate when Bush got in the White House. In fact, you can characterize Bush's first term as a classic blowout top of an enormous bubble. The banks went wild with greed and there was no responsible adult hand at the wheel. Now it's careening toward the edge of a steep cliff.
Think of the bailout as a slamming on of the brakes. That's all. It's not going to cure the underlying problems -- it's going to save the economy a spectacular death. We're still going to be skidding to the precipice, only a lot more slowly. Will it work? Don't know, but it will buy us some time. It will at least give us a chance, however slim, to get through this thing without finding out some things about ourselves and our society that we never wanted to know.