It's always odd to live through a moment in the news that you realize is becoming a moment in history. I've been around the block long enough to recognize them when they crop up, I think (and getting the history degree doesn't hurt, especially once you see how these things cook up when using primary source documents in research). And, Leaguers, this story is picking up enough steam to maybe be one of those events.
And while the events of the current financial collapse won't be recognized in the same manner as, say, Pearl Harbor, 9/11, etc... it
could be recognized in much the same way as Black Thursday. And you know what the big difference is between those events (aside from loss of life and the road to war)? The mistakes made along the way are amazingly clear in hindsight.
I am unsure what to make of the bailout. We're getting a plea from a government that has made a lot of claims over the years insisting that the public rush to get behind them, but its a governments whose credibility has been tragically diminished thanks to requests for blind faith (and this isn't just opinion here. I'm going off well known polls, Sunday morning show consensus, etc...) and then finding their goodwill has been taken advantage of.
Add in the idea that the government hasn't ever really reacted this way before to financial crisis, and the American public surely isn't too excited about finding themselves holding the bag (taxwise) for what's seen as nothing less than an act of hubris by people who would as soon step on them as speak to them.
The American public seems to have a feeling in their gut that the bailout plan is the wrong way to go, and you can't blame them. After all, where's the bailout for the people losing their homes? Why are CEO's for failing companies regularly receiving "golden parachutes" after driving their companies into the ground and losing their jobs? Why were the financial policies of the past few years ever allowed if anyone was aware of the potential risk? And whys hould we be expected to pay for their risk? When so many people have already lost so much thanks to participating in their risky behaviors? And it seems hopelessly mired in the notion that the financial well being of the country should be based in propping up the wealthy (and wealthy institutions) to support the trickle down effect theory of economics.
That's not to say I believe that $700 Billion should be set aside for people who took loans they couldn't afford, but I don't see the value in putting your $700 billion in fewer baskets over spreading the wealth when the institutions seem to lack the discipline to handle the money they have/ had. (Either way seems to be a dud. I wonder how historians and economists of the future will see the economic stimulus checks we got this summer. FYI: Mine was spent in Costa Rica. Viva America!)
Economists will be studying the past six years for the next fifty. And, I assure you, we'll do it all over again in my lifetime when another generation is running things, doesn't know their history and believes the people in their same jobs of a few decades back were merely fools who couldn't handle things the way THEY can.
In a way, we sort of know what will happen if the bailout doesn't happen. We have a major financial crisis and have to hit the reset button. And while it will surely hurt many, many people, its something that may serve to force our economy into a natural equilibrium. Joe Average on the street has no faith in the companies who have failed in the first place, so why would we give them $700 Billion again (whether that's how the administration looks at it or not, it's our dough...)? In short, if we think we're about to bottom out, anyway, why go further into national debt throwing good money after bad?
Frankly, I'm a bit stunned that this plan came from the White House. But if I were an outgoing President, I wouldn't be too keen on letting the end result of eight years of my economic policy being financial collapse of the US, either, I guess. So I'd be looking for some stopgap to try to keep that from happening. Nobody wants to be remembered as going down in flames in the same manner as Hoover.
Whether right or wrong on this bailout request, unfortunately the current administration has burned through its goodwill and claims of wise leadership (I guess they call it political capital). Which is another lesson in government to you future leaders of America. Sooner or later you might actually need for people to get behind you on something, so you better not waste and/ or drop the ball on the first two or three requests.
Part of me wonders if Bush did more harm than good in going begging to the public for their support instead of leaving the idea of the bailout as more of an abstraction without a face.
Part of why I'm writing this post is that LoM might be your daily bit of goofiness, but it's also got a multi-year archive at this point. So it seems a shame to not mark some of this stuff for posterity for myself. Especially if I suspect that events as they unfold will be part of our national narrative. So I can see if I was right or wrong in my predictions, and see how what I was thinking about the news as it unfolded.
So, yes, perhaps a bit selfish, but I hope it'll have some value for me in the future.
