A good suggestion from a caller on Washington Journal this morning: instead of giving money to the banks, credit the possessors of the failing mortgages; that would still lighten the debtload of the banks, but it would also save the homeowners, and maybe even keep some neighborhoods from falling into blight.
The guest this morning "Rep. Mike Pence R-IN" is a douchemonkey who believes the president "is an honorable man" and who sees the current crisis as an opportunity to slash the capital gains tax and basically pass changes that would worsen the problem. And even HE pointed out that "anytime someone tells you you have to make the deal right now, you're not getting the better part of the deal, whether on a used car lot or in Washington..." Well said, douchemonkey, well said!
All of this is reminding me of American Theocracy by Kevin Phillips, which, despite the title, is in large part about the financialization of the US economy and how it compares to the financialization "stage" of historic empires (Spanish, Dutch, British), all of which fell shortly after shifting their economies from the making of goods to the pushing of paper. (He also mentions that the British Empire struggled in part because it was so committed to its coal-based infrastructure, when the world had moved on to oil... sound familiar?)
I love this refrain I keep hearing that these "financial instruments" are so complex that the people using them had no idea how they worked. Well someone somewhere does: find that person and give me an hour-long investigative report, with lots of charts and graphs and pictures and whatnot. Give us the chance to understand. Or are they scared of that?
Average people and ordinary business-owners seem to have a better sense of how money works than people with MBAs just because our heads aren't cluttered with dishonest trickery. We also seem to have a better sense of when we're being bullshitted, and when something has gone so far that it cannot be sustained. This blog, manned by a poets, artists, writers, teachers was talking about the inevitability of the real estate bust when so-called "experts" were insisting that the sky's no limit.
I think these people need to stop acting like "you just couldn't pooossibly understand" and maybe just try to understand themselves. Then they need to realize that ideology will not save us: practical solutions will. And setting up future disasters in the same mold as this one is NOT a practical solution. Bail out the people who caused them, have them pay no penalty, and this will just happen again and again. And then we'll need a New Deal all over again. (We might already!)
I do not look forward to the fall of the United States. I'm a progressive, and I want to see progress. I want progress in technology. I want progress in health. I want progress in human rights. I want progress in human happiness. The fall of the United States doesn't help any of that, at least not around here. But I'm sure there are people who are looking forward to it: other countries. China, which wants our economic crown. Russia, which wants our military crown. France, which wants our diplomatic crown. And so on. We're getting a "new world order," all right, and it's thanks to a "Bush" -- how appropriate. What will happen to America from this point has a lot to do with what gets decided this week: will we socialize and stabilize like a borin' ol' de-clawed Western European country, or will we radicalize and corporatize, like civil-war fraught, education & healthcare-free, highly-profitable "3rd World" country?
The answer lay in the answer to a deceptively simple question: who are "we"? Are we the ones here to serve the economy, or are we the ones the economy is here to serve?