It’s difficult to find the words to express, or perhaps explain, why our government’s efforts, our candidates’ promises, seem as if they must somehow be in our best interest, yet don’t make us feel much better about our prospects. Anne Michaud at Viewsday has put together some of these nagging doubts in a way that seems to capture the problem.
Truth be told, most of usOne of the most insightful comments on where our country is headed came from a recent “Doonesbury” cartoon. In response to the U.S. Treasury bailout of banks, one character noted that America is privatizing wealth and nationalizing risk. In other words, people at the top are extracting riches from the financial system, while the taxpayers hold a safety net under those same institutions when they fail. They’re “too big to fail,” right?
These days, we middle-class householders seem too little to succeed. The trend has all been toward handing us more risk for our own financial futures — and that became all too clear last week as the Dow plummeted.
As we side up to candidates, we do so based more on rhetoric, how much they love us and how deeply they care about us, rather than which one has a plan to save us. As more of our money is “infused” into Wall Street, we rationalize why this is going to be good for us, because we can’t really figure out how exactly throwing more of our money at the people who lost it in the first place is going to help.
The fact is that we can’t change how the Treasury Secretary is going to act. He hasn’t asked me my opinion, and I’m betting you haven’t gotten a call from him either. Not that I have anything substantive to suggest. My Wall Street friends talk in Wall Street jargon about what went wrong and how it should be fixed, but they really have no ideas other than how to keep their jobs intact and what would make traders happy over the next five minutes. After that, it’s a crap shoot.
The government has one asset that we lack. They have us, the bottomless pit of resources from which to extract taxes to pay for their schemes. If one doesn’t work, like the $700 billion bailout, then they can just try another, like the $250 billion infusion.
We bear the risk of our government’s financial blunders. We bear the weight of cleaning up Wall Street’s blunders. And as Anne Michaud reminds us, we’re too small to succeed. But we’re just the right size to hold the safety net under Wall Street and banks, and as everyone keeps telling us, we have to do this because they’re too big to fail.
Who’s got the answer to all this? Beats me. The financial wizards certainly don’t. The economists, even the Nobel Prize winning economists, don’t. The talking heads on television obviously don’t. The government doesn’t, nor do the candidates for President. But one thing is for sure. No matter what happens over the course of this “crisis”, you and I will pay for it.
My expectation is that we will do no better with these many schemes than we would do with no schemes at all. The markets eventually right themselves because they have no option to do otherwise. And we will feel the pain either way. McCain and Obama may love us dearly, but we’re still just 300 million pockets to our government.
Update: On CNBC, all kinds of potential deals in the works, but nobody to finance them. The whisper is, let’s ask the treasury to finance it, meaning that the treasury gets a piece of each deal. When the dust settles, it turns out that the United States of America owns a share of all these major businesses. Share in the equity, America!
Let’s see, government owns major businesses. Why does that sound familiar? Oh yeah! Now wouldn’t it be ironic if the last gasp of the Bush administration turns this country communist? From each according to his abilities. To each according to his needs. Well that will never work.
Discover more from Simple Justice
Subscribe to get the latest posts sent to your email.
You mean “kibitz”, as in comment on someone else’s chess game, rather than “kibbutz”, as in collective farm.
Indeed I do. Thanks, Walter.
Many of us — me and you included — kibitz on a lot of things, but don’t really know what to do about them. (I, of course, know exactly and precisely what we should do about carry laws nationwide, but that’s only one subject.)
We don’t get to decide that in a Republic. We just get to decide on what we say, and who we vote for, and we’re not insulated from the consequences of making ill-informed choices, or well-informed choices that run smack dab into a Black Swan.
I’ll happily listen to your opinions about, say, what the dangers are of Iran getting nuclear weapons (both in terms of if and when, and what they’d do with them), but I don’t think you know, either.
And a mistake in either the prediction or the policy can have very serious consequences, whether that mistake would be to “bomb, bomb, bomb, bomb Iran” or not “bomb, bomb, bomb, bomb Iran” and restrict ourselves to “tough diplomacy” (“If you don’t stop, we’ll warn you again, and we’ll use bigger words, dammit.”) Or to threaten to and not, or . . .
So we pick somebody to pick some other somebodies to help him decide, and if he gets it wrong, we have serious consequences, which we could only avoid if we collectively knew what to do about it and could trust the guy we pick to do what he said he would do.
And we don’t know either of those.
I foresee interesting times, in a Chinese sense, and I’m hoping this whole thing is the worst of it, but that’s not the way to bet.
The beauty of it is that we can, for the most part, express our opinions and maybe, sometimes, bring a tiny bit of insight into an otherwise very cloudy situation. Maybe we have little to offer, but even little means something. To the extent it calms or inflames, or somehow brings even the slightest illumination to a choice, it helps. To the extent it doesn’t, at least I’ve gotten it out of my system.
On the other hand, I have no present intention to opine of the subject of bombing Iran.
You state that the “experts” got us into this mess. Unfortunately you are incorrect. Bush fired all the real experts, leaving a perfectly pleasant bond salesman (Paulson) out of his depth as his Secretary of the Treasury and a bunch of yes men underneath him.
What you have to look for is the experts who have been consistently *right* about what has been happening. Hint: One of them got a Nobel Prize on Monday for the crime of being right these past eight years :-). You might want to read Krugman’s latest column in the NYT…
I like Krugman a lot, but don’t let the shiny Nobel Prize blind you. I watched an interview with him yesterday, where he said that he really has no idea what to do, as this isn’t really economics but psychology. His best answer was that since 8 years of the Republican approach has failed, we might as well try the Democratic approach for the next 4, though not because he believes it’s a better answer, just a different one.
Krugman deserved that prize, but not for his prognostication skills about our economy. He’s been predicting a disaster for years. Keep doing that over and over, and someday you’ll be right.