Do you remember the story about how the big bad government forced Wells Fargo to take TARP funds they didn't want? Take a look at who is second on the list of the most troubled banks. Perhaps the Wells Fargo execs were more worried about their own compensation packages than their bank's health when they were making those noises about TARP.
Does anyone think it’s just a little weird to be stampeded into a $700 billion solution to the worst financial crisis since the Great Depression by the very people who brought us the worst financial crisis since the Great Depression?
How about a second opinion?
This may be the best explanation for how we got in this financial mess. Here is just a sample:
It may come as a surprise to the champions of deregulation, but nobody likes regulation. The restrictions that were placed on banks, S&Ls, and other institutions in the 1930s weren't put there because someone thought it would be fun. They were put in place because they addressed problems that had just been clearly and painfully revealed. They were put in place because they were necessary.
"You've heard of mental depression; this is a mental recession," Gramm tells the Washington Times, adding that despite all the bad news out there US economic growth continues at a rate of approximately 1 percent. "We may have a recession; we haven't had one yet."
Adds Gramm: "We have sort of become a nation of whiners. You just hear this constant whining, complaining about a loss of competitiveness, America in decline...We've never been more dominant; we've never had more natural advantages than we have today...Misery sells newspapers. Thank God the economy is not as bad as you read in the newspaper every day."
This comes on the heels of McCain himself saying of economic distress, "a lot of this is psychological. Because I agree the fundamentals of our economy is still strong.”
I smell a great attack ad coming out of these remarks.
Picture a guy pumping gas, and a narrator's voice saying "John McCain thinks the problems with the economy are all in your head." And the guy answers back, "If that's so, then would John McCain like to pay for my $4 gas?"
Picture a woman buying groceries, and the narrator says "John McCain says a lot of our problems with the economy are psychological." The woman replies, "There's nothing psychological about my grocery bill."
Then picture a family standing outside of a house with a foreclosure sign, and the narrator says "John McCain says the fundamentals of our economy are still strong." And the father replies "Have him tell that to my banker."
Then close with something like "John McCain doesn't understand America's problems, so how can he solve them?"
People who are watching their bank accounts bleed and their property values plummet don't like to be told it's all in their heads.
If the Obama campaign or its allies would run a bunch of ads like that right now, this race would be over.
"Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state right over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course."
"Stay the course? You've got to be kidding. This is America, not the Titanic. I'll give you a sound bite: Throw the bums out!"
"& someone has to speak up. I hardly recognize this country anymore. The President of the United States is given a free pass to ignore the Constitution, tap our phones, and lead us to war on a pack of lies. Congress responds to record deficits by passing a huge tax cut for the wealthy (thanks, but I don't need it). The most famous business leaders are not the innovators but the guys in handcuffs. While we're fiddling in Iraq, the Middle East is burning and nobody seems to know what to do. And the press is waving pom-poms instead of asking hard questions.
That's not the promise of America my parents and yours traveled across the ocean for. I've had enough. How about you?
"I'll go a step further. You can't call yourself a patriot if you're not outraged. This is a fight I'm ready and willing to have.
"I'm going to speak up because it's my patriotic duty & I'm hoping to strike a nerve in those young folks who say they don't vote because they don't trust politicians to represent their interests. Hey, America, wake up. These guys work for us.
"Why are we in this mess? How did we end up with this crowd in Washington? Well, we voted for them — or at least some of us did. But I'll tell you what we didn't do. We didn't agree to suspend the Constitution. We didn't agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come from that's a dictatorship, not a democracy.
"And don't tell me it's all the fault of right-wing Republicans or liberal Democrats. That's an intellectually lazy argument, and it's part of the reason we're in this stew. We're not just a nation of factions. We're a people. We share common principles and ideals. And we rise and fall together.
"There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?
"On September 11, 2001, we needed a strong leader more than any other time in our history. & That was George Bush's moment of truth, and he was paralyzed. And what did he do when he'd regained his composure? He led us down the road to Iraq — a road his own father had considered disastrous when he was President. But Bush didn't listen to Daddy. He listened to a higher father. He prides himself on being faith-based, not reality based. If that doesn't scare the crap out of you, I don't know what will.
"So here's where we stand. We're immersed in a bloody war with no plan for winning and no plan for leaving. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.
"But when you look around, you've got to ask: "Where have all the leaders gone?" Where are the curious, creative communicators? Where are the people of character, courage, conviction, competence, and common sense? I may be a sucker for alliteration, but I think you get the point.
"Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.
"Name me one leader who emerged from the crisis of Hurricane Katrina & Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing & Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry ...
"Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope. I believe in America. In my lifetime I've had the privilege of living through some of America's greatest moments. I've also experienced some of our worst crises ... If I've learned one thing, it's this: You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a call to action for people who, like me, believe in America. It's not too late, but it's getting pretty close. So let's ... go to work. Let's tell 'em all we've had enough."
We are not as powerful as we used to be because over the past three decades, the Asian values of our parents’ generation — work hard, study, save, invest, live within your means — have given way to subprime values: “You can have the American dream — a house — with no money down and no payments for two years....
A few weeks ago, my wife and I flew from New York’s Kennedy Airport to Singapore. In J.F.K.’s waiting lounge we could barely find a place to sit. Eighteen hours later, we landed at Singapore’s ultramodern airport, with free Internet portals and children’s play zones throughout. We felt, as we have before, like we had just flown from the Flintstones to the Jetsons. If all Americans could compare Berlin’s luxurious central train station today with the grimy, decrepit Penn Station in New York City, they would swear we were the ones who lost World War II.
How could this be? We are a great power. How could we be borrowing money from Singapore? Maybe it’s because Singapore is investing billions of dollars, from its own savings, into infrastructure and scientific research to attract the world’s best talent — including Americans....
Who will tell the people? We are not who we think we are. We are living on borrowed time and borrowed dimes. We still have all the potential for greatness, but only if we get back to work on our country.
As gas skyrockets toward the $4 range, it's interesting the note that the current hike in oil prices is unlike the others we have seen over the past few years.
Since the Iraq war started, prices have shot up from time to time dependent on external events, be they worries about the war, possible actions against Iran, Turkey's conflict with the Kurds, Israel's invasion of Lebanon, even Hurricane Katrina.
But since the beginning of 2007, the rise seems more related the falling dollar than any other factor. The Euro used to be worth only 80 cents, but now is trading at $1.50. Since oil is priced in dollars, this has led to record prices above $110 a barrel.
The reason for the dropping dollar is that the world has finally caught onto the Bush ponzi scheme, where the U.S. just keeps borrowing money, and they don't trust us to pay it back.
Unlike the externally driven events, don't expect oil to drop in price again soon, if ever.
There's a couple of good stories out today about the worsening economy and taxes.
First, you have Paul Krugman who breaks down the employment picture, showing that the "Bush Boom" was a bust, and is getting worse. He points out the facts that the fearmongering Republicans pleas to continue the Bush tax cuts flies in the face of reality. The tax rates during the Clinton years seemed to work pretty well, without running huge deficits.
The other story is about Mike Huckabee's FairTax plan. He wants to get rid of income, payroll and other taxes and replace the with a "consumption" tax, basically a huge sales tax. The article shows that the FairTax isn't so fair, as it shifts the burden onto the middle class, while the rich get a big break.
There are some good things about a consumption tax, but there's a lot of bad things, too. Proponents do not take into account how the wealthiest Americans make and spend money. While the tax would affect nearly everything you buy, investments would not be covered. Therefore, people could build up large fortunes by buying up businesses and stocks and pay little taxes. It's a recipe for further concentrating wealth at the top of the ladder.
Bush says US economy is safe and sound.
Gee, now I feel better.
He reminds me of Kevin Bacon's first movie role in "Animal House," the part where he is furiously urging the crowd, "Don't panic! All is well!" right before his is trampled to death.