"Franklin Roosevelt had to save capitalism from itself," Los Angeles Times business editor Tom Petruno told me as Washington Mutual and Wachovia became the latest banking dominoes to fall. "Is history repeating?"
Indeed, it is, as one could tell from the repetitive usage of loaded terms and phrases like "Great Depression," "meltdown," "apocalypse," "Armageddon" and more to describe the just-on-time cratering of the American economy. After the strange bedfellows in both parties torpedoed Bush, Bernanke and Paulson's so-called bailout, more than $1 trillion of market value in American equities disappeared in a single day. The Dow Jones average set a record for quickest suicide dive in a single day. Other indexes sunk to multiyear lows, wiping out years of value, and stocks across the board went negative like Ann Coulter. In fact, the only major stock that actually advanced on Monday was Campbell Soup.
Can there be a more fitting metaphor for the American economy stuck beneath the Bush administration's thumb?
Some say, like Michael Murphy on the left, that the "Bailout Plan", without which banks and credit that underpin our economy would cease to function, is a massive "swindle" by the wealthy:
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.
Well, he can't then blame the Republicans for saying "no" to the bailout, since they are apparently joining hands with him to "save the country" from this "swindle". And if the country is victimized by a swindle, is it really the solution to "just say no"? Or could it be, as in this scenario, like cutting the heart out of the economy, and, in turn, the country?
Imagine now that that human body, pictured above, in its entirety, is the economy. Different parts of the body represent different sectors of the economy. So maybe an arm is the pharmaceutical sector. And maybe a leg is the IT sector, and another leg the energy sector. But the central system to the human body is the heart. If it doesn't function, all other systems in the body shut down.
Blood that flows to and from the heart is comparable to money that flows through the market. The availability of money to leave the heart and travel to other areas of the body - market sectors - is what drives the overall economy. It touches EVERY area of the economy.
Let's say you own a successful dry cleaners in your town. You're profitable, you manage your expenses well, and you've provided some number of jobs back to the community. All of your financial fundamental are in place for expansion. You've scoped out an area where competition will be minimized and where your proven business model is likely to thrive. You don't personally, however, have the money to take a lease on space and hire enough people to run your second location with all of its equipment requirements and the like. You need to borrow that. In a functioning economy, a lender would be happy to lend you the money to expand. You're a great risk - you have a business model that has proven to be successful. But you can't get the money. And you can't get the money because there IS no money to lend.
OK, so I need another cup of soup.
Bush himself is just another iteration of the infamous "New World Order" instituted by his father while trying to, what else, convince the American public that it needed to go to war against Saddam Hussein. The revisionism is transparent, befitting a government that cares nothing of what its people actually think. Jon Stewart of "The Daily Show" recently juxtaposed Bush's address on the financial cataclysm with his pre-invasion speech in 2003 and found -- surprise! -- they were exactly the same.
This is a long way of saying that this particularly frightening crux of historical geopolitics, fascism and environmental calamity has been a long time coming. Failing banks? Deregulation. Endless war? Homeland security. Total information awareness? Transparent government. Bankrupt economy? The fundamentals are strong.
Now, Jon Stewart may have been joking in a sense, but there's something rather eerie here, and the stakes are far too high to laugh about. Murphy sees it as a case of blatant theft:
This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!
That's a lot of rhetoric - as if we can just go now and pull out, and take those weapons back to the pawn shop... oh, but without a war, there's no market for the weapons, so we'll have to sell them to the Chinese so they can invade ... Tibet?
Talk is cheap. Let's use our minds.
RenaRf, with a degree in economics, recommends the bill as a necessary evil:
I don't think this bill is a solution. I think it is more akin to emergency surgery necessary to keep the patient alive before taking a holistic approach to healing the body.
So even though the "bailout" or "repair job" is theft, we should still go with it? Or what is this really all about? Scott Thill says,
To start with, the bailout was obvious theft, but our situation is more precarious than you think. The hyperreal credit default swap market, which few understand although it is estimated to involve tens if not hundreds of global trillions, is faltering under the weight of its own Ponzi origins.
The scenario significantly worsens once you factor in the given that countries like China and others who have denominated their loans in dollars are shouldering our exploding debt, along with oil-soaked sovereign wealth funds from nations whose civil liberties records suck ass. As I wrote last year on this clusterfuck, if the Chinese call in our debts and oil-producing countries decide to peg their petrodollars to the euro, you can more or less kiss the dollar goodbye. Which means the last thing you'll need to worry about is your stocks, retirement or credit cards. You will instead worry whether or not the cash you have on hand will be worth anything at all.
That is the loaded gun that bankers, brokers and the White House is holding to the public's head, as I write. That trillion erased on Monday, as well as the trillions that have been lost and will be lost in the coming months, was nothing more than a hostage situation engineered by the Bush administration, the Federal Reserve and their partners in crime in finance, insurance and real estate business.
But what is the right thing to do at this point?
"I think our economic situation can get much worse," argues Danny Schechter, the veteran producer and author whose 2006 indie documentary "In Debt We Trust" covered this volatile territory long before CNN would. "Jobless claims are already at a seven-year high, but the government is worried about the reaction from Asia. We are living on other countries' money, and when that spigot gets cut off, we will be in deeper doo-doo. Part of the reason for the scale of the bailout is to show Asia and sovereign wealth funds that we will protect their interests."
But for how long? The Bush administration and Congress' disdain for the American people has been painfully obvious, so it's hard to believe they will call from sky-high Dubai to see how we are doing after making off with almost all of our money.
"It's a high-stakes gamble, which is why Paulson tried to do it quickly in a climate of shock and crisis," Shechter says. "He knew that the longer it takes, the more opposition it will attract. This plan, if eventually passed, will pre-empt the next president from doing anything about it, because there will be no money. They are wrecking the government by wrecking the economy first."
More advice to "just say no." It seems that, if you read all this, no matter what we do, we are doomed. Even the repair job or bailout is too late - too much, too late...
"This is the September of surprise," Schechter concluded, "not a war on Iran but on America."
And when he says, "war", he's not joking. This could be the prelude to a police state taking over America.
Like every move the Bush administration has ever made, from the Patriot Act to the occupation of Iraq and down to bankrupting the American economy, this maneuver is a solution in search of a problem that it seems destined to create. Look around you. Housing is over. Stocks are nosediving. The banks are gone. War is ceaseless. Civil liberties are disappearing. Nerds at the Federal Reserve and the Treasury are taking hostages. It is madness.
Or maybe it's just a matter of "live free, or die."
What if we just said "no", and the whole economy collapsed, the rich got poorer, and the poorer had to learn to survive in a whole new way... What would happen if the big threat to us from this Wall Street collapse and the collapse of the banks were not made good by taxpayer dollars? It seems to be more of a global issue, of screwing all the people, like Asians, we exported our debts to. And in that case, it's seems wrong to just let it go and collapse. But the fear is real.
And here is what we see today: Crowds protesting in the streets, the people's money wiped out thanks to the Bush administration's latest economic shock and awe. An army brigade matter-of-factly betraying Posse Comitatus for the purpose of crowd control. The public trust and wealth almost robbed cleanly with congressional approval.
In other words, we see another unfolding coup, which is to say, a rerun. And there is no telling what the future may hold, or whether or not we are connecting vectors that should remain solitary. But our math has worked just fine in the past -- better than Ben Bernanke and Henry Paulson's math, that's for sure.
And we'd love to be wrong about what's coming. But unfortunately that isn't up to us, and it never has been: It's up to the Bush administration. And it has never failed to let us down.
Is it really a police state? Or is it the tightly-networked global economy to which we have to finally keel? The alternative could be even worse.
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