Economic Fundamentalists, by John Ostrander
Over last weekend, the Presidential campaign’s silly season came to a screeching halt. Karl Rove, politics’ answer to P.T. Barnum, manipulated things pretty well, dominating news cycle after news cycle with his Beauty Queen Who Can See Russia From Her Porch (!) but that pesky reality came in and re-focused everything back on the issues again.
I suspect you know that the large brokerage house of Lehman Brothers went into bankruptcy. Merrill Lynch, another famous brokerage, got sold to Bank of America for relative pennies because it didn’t have much other choice. Insurance giant AIG went on the ropes and required a mega-Fed bailout. The Dow dropped almost 500 points on Monday before somewhat recovering on Tuesday before nose-diving again Wednesday morning.
In recent days, mortgage giants Fannie May and Freddie Mac were also bailed out (and acquired by the government). In a move of surprising fiscal sanity, the government has refused to pay the fired CEOs of these two companies their severance packages that would have come to about 24 million dollars. NY Senator Charles Schumer said “It would have been unconscionable to award these inflated salaries, particularly when the leadership of Fannie and Freddie can hardly be given good grades." Too right, Chuck.
Another bank, Washington Mutual (WaMu – Wooo Hooo!), is on the skids. Other banks and big-time brokerages are in trouble. The Fed has signaled that Wall Street should not expect the sort of bailout that they’ve done elsewhere. And experts are saying that a full-blown recession can be expected by the end of this year, start of the next year at the earliest.
So we’re back to dealing with issues. And what’s the main issue? What’s the election going to be all about? Not Sarah Palin, although her getting anywhere near the Presidency is pretty scary. Not the Iraq War, although that remains a mistake and a drain on our resources and the lives of our soldiers. It’s not about “values” and whose values are best. It’s not about whether or not we agree on what God is or if there is a God. It’s not about “smalltown” versus “big city.” It’s not about red states versus blue states. It’s not the environment although having air to breathe is pretty important. In terms of the election, there is one primary issue.
It’s as true today as when James Carville hammered it into Bill Clinton and got him into the White House. People are hanging on by their fingertips; they’re losing their jobs, their businesses, their homes. Older people are losing their pensions. I know people who have houses they can no longer afford but that they can’t sell, either, because the housing market is so depressed. I’m not talking about people buying McMansions. I’m talking about regular people with modest homes who were able to handle their mortgages until the economy went south. Now they can’t make the monthly payment, they can’t sell the house – period – and they have damn little hope.
John McCain went on the air to say that the “fundamentals” of the American economy were sound. The Democrats pounced and McCain stumbled back on the air to explain what he meant by fundamentals. He displayed an interesting bit of body language while doing it; his head kept moving side to side suggesting he either has Parkinson’s or he was denying what he was saying.
President Bush, in reacting to the Wall Street fun and games on Monday, said, “Adjustments in the financial markets can be painful, both for people concerned about their investments and for the employees of the affected firms. But in the long run I am confident that our capital markets are flexible and resilient and can deal with these adjustments.”
As Jon Stewart pointed out on The Daily Show, “adjustments” are something the chiropractor does to your back.
What Bush and McCain both are showing is an act of faith – economic fundamentalism, if you will. An unwavering belief in the “free market” – that the “free market” is the answer to all things and it doesn’t require regulation because it will regulate itself. Little magical financial pixies come along to make an “adjustment” as needed. Allan Greenspan in a tutu and wings.
Well, actually Greenspan always looked more like a gnome although he was described as a wizard. I always thought that the rules of Dungeons and Dragons were a little more accessible and understandable than economic theories. What will the market do today? Let’s roll our twelve sided dice and see.
I have less faith in the market than the true believers. If I’m an agnostic about deities, I might as well doubt economists, too. The fundamental truth about the market is that it’s based on greed. There’s a lot of real financial pain that real people are feeling out there and somebody will make some money out of this, even if it isn’t you. Government regulation gets in the way of that as well it should.
The McCain camp on Tuesday said that Obama would hobble the economy with “burdensome regulations” just when the economy can least afford it. Excuse me? Maybe it was a lack of regulation or an excess of de-regulation that have already hobbled the markets.
The housing market got overheated because of cheap subprime mortgages. The banks and brokers and insurance companies are in trouble and We, the Chump Taxpayers, are bailing them out because they all got involved in the artificially created junk mortgages because a) they were greedy and b) the regulations were relaxed or withdrawn to keep them from doing pretty stupid things. Why were they relaxed? Because the Bush Administration and the Republicans were always chummier with Big Business than the Little Guy.
Need proof? Take a look at the scandal in the Interior Department last week. Thirteen employees in Denver and Washington who sell U.S. mineral rights to oil companies were accused by a government investigation of receiving gifts, using drugs and having sex with employees of the oil companies with which they were dealing. As Senator Bill Nelson (D-Fla) said, "The government employees who oversee off-shore oil drilling are literally and figuratively in bed with big oil.” It should be noted that the sale of mineral rights to these oil companies is a large source revenue for the government; the only greater source is taxes. To me this is emblematic of the whole Bush Administration approach to Big Business and its’ wrong.
The government should be about protecting its citizens. It should not be about making lots of bucks for the richest percentile of Americans so that the effect can then ‘trickle down” to the rest of the population. The Bush Administration – the Republican Administration – has screwed this country good and proper economically. Do you reward it with another term so it can fix it? McCain ain’t that different, folks, and Palin is a political copy of Bush. I don’t care what your social beliefs or religious beliefs or any of your other beliefs are, you just don’t reward this kind of gross incompetence (and that’s giving them the benefit of the doubt) with another term.
I’ll use a comic book analogy. I know fans who have griped about a certain book for years, moaning how the quality has gone down hill and how cynically the publisher keeps churning out the same old drivel. Ask them if they continue to buy it, they admit they do but because they don’t want to mess up the numbering system of consecutive issues they’ve acquired. The publisher has no reason to change or improve the book because the fans keep buying it regardless of the quality. The simple answer is – don’t buy it. Send a message.
Do the same for the Republicans. You’ll be doing them – and the country – a favor.
Obviously, ComicMix columnist John Ostrander is some sort of commie.