Last week in history - Under Siege

I don't know about anyone else, with what all has taken place last week, I believe we are in deep dooo dooo! Spoken in an interview this morning, a young man declares, "We are now a socialist state."

If not now, we are certainly headed that way. Wall Street, the street where dreams were once made, is under siege by Washington. New York's Mayor Bloomburg is sending out warnings to his constituents. "Times are going to get bad. The free-wheeling, big-spending, money flowing, wheeler-dealers will soon be tightening their belts." He states that multi-million dollar apartments will soon be up for sale. Things will be tough as he cut 1.5 billion from his city's budget.

Had regulations been put in place, as Bush wanted early on in his first four years, we may not have been in the place we are today.

Announced this morning, Wachovia may be the next to fail.

Last week, Bank of America became the largest bank. What is coming is any one's guess. Our future generations will be paying for the errors of today, that is, if they are still living a life of freedom.

Our Constitution is unraveling as I speak. It's very words are being nullified as our congress has lost its way. Recently spoken by McCain, "We went to Washington to change it, instead, we were changed." Power does corrupt as evidenced by all those caught up in corruption and now serving time in prison...or soon to be headed there.

Wall Street Journal
09/26/2008

Mean Street: The Bailout - You Can Never Be Too Cynical

he absurdist drama “The Bailout,” now playing under the Capitol Rotunda, is perversely reassuring. It has reinforced my long-held belief that you can never be too cynical about Wall Street or Washington.

Is anyone capable of rising above his narrow self-interest? By the end of the weekend, we will know for sure. Either there will be a bailout plan or there won’t.

Certainly, there is no excusing Wall Street’s failings in this mess. But at least Wall Street grasps the severity of the crisis and has embraced a possible, albeit self-serving, solution.

Washington, meanwhile, engages in an elaborate circus of political brinksmanship in which the nation’s economic survival is a campaign plaything.

A fan of politics may argue that all the hearings, closed-door sessions and news conferences is the stuff of democracy, where a compromise satisfies no one but serves the public interest. That is a version of reality best left to a grade-school textbook.

How can you explain the recent House Republican proposal for an entirely different bailout structure? This proposal has zero chance of being adopted. Zero. It serves only a political and not a practical function.

Or Democratic Senate leader Harry Reid’s insinuation this morning that Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson were focused on serving Wall Street’s interests and not the public’s?

Bernanke and Paulson are the only two people in this process with nothing but the public interest at heart. But they are Republicans and so must be demonized.

Of course, politicians of all stripes claim they act on behalf of Main Street. And that Main Street hates the bill. But what do you expect?

The media and politicians have convinced Main Street that it is the victim in this drama. Those evil Wall Street bankers. The theft of $700 billion from good people and giving it to bad people.

That is a nice simple interpretation like an old Hollywood film or a trashy paperback. It is wrong, but it’s black and white. Understandable.

Not like Bernanke. He is complex. At committee hearings, the beleaguered bearded professor actually tried to explain how the financial system works. Big mistake. That isn’t good for sound bites.

Both he and Paulson gave the politicians and Main Street too much credit. They have behaved too calmly, and too rationally for the nation to get the message.

Bernanke and Paulson should have made outrageous promises at the hearings and argued there is no way this will cost the taxpayer $700 billion, that the taxpayer will in fact make money. That works much better on the American psyche. America loves buying lottery tickets. Think of the bailout as a lottery ticket with much better odds.

Perhaps the greater failure by Bernanke, Paulson and President Bush was a reluctance to scare the hell out of people. A leader shows gravitas and concern, not panic. But, perhaps, a little panic wouldn’t hurt. Because you get the sense that Main Street is so busy being angry, that it isn’t sufficiently frightened. The public still doesn’t connect their lives to the crisis. But it should.

Because no bailout bill means that:

By the close of the stock market on Monday, the value of Main Street’s IRAs, 401Ks and pension plans will be worth a lot less than on Friday. How much? Hard to say, but a loss of 20% isn’t crazy.

By week’s end, there is a good chance that a raft of large banks will be taken over by federal regulators.

Within two weeks, as the banks hoard cash, the credit lines on most of Main Street’s credit cards will be reduced, foreclosure proceedings accelerated and car-leasing programs suspended.

Within a month, Main Street won’t be able to buy a home, a car or a tractor unless paid for in cash. As the credit markets shutdown, the mortgage, auto and small-business loan markets will nearly disappear. And the economy will grind to a near halt.

Far fetched? Not at all. It is the absence of credit–not too much of it–that causes great economic depressions.

The credit markets even today are essentially frozen, waiting for a resolution of the bill.

I am not holding my breath waiting for Main Street to come around and support the bill. And I certainly don’t expect Congress and the two presidential candidates to quickly put away their swords.

No, that would be the right thing to do. They will take the nation to the brink this weekend. And then–and only then–will they do the right thing.

This shouldn’t just make you cynical. This should make you question everything about the kind of government we have.

Hang on, it's going to be a bumpy ride...especially depending on who runs the White House the next four years...and personally, I would rather have my honorable maverick father run this country versus the young, community organizing socialist, who wants to rule the world!

Early Economic Stabilization Act - "It's ALIVE!", said Dr. Frankenstein.