Sunday, September 21, 2008

Why the financial institution bailouts don't matter

OpEd News--That Ukrainian-born Larisa Alexandrovna is doing more of her defeatist ranting over at Rob Kall's defeatist-o'-rama site this week, this time over the bailouts being "part of the plan." What plan would that be exactly?

What we're seeing the results of short-sighted economic-philosophies with the crashing of various banking and financial institutions. That's right, the business mentality transplanted into the halls of the federal bureaucracy once again, with the predictable results.

The pathetic-part of it all is how the public, investors, and the like are all massing around former Fed Chair Alan Greenspan, current Treasury Sec. Henry Paulson, and Fed Chair Ben Bernanke as though they were Mesopotamian Priests, the guys "with the answers." All they have are short-term answers.

Just as in the 1920s, the Republicans and Democrats gave the business and lending sectors what they wanted, and the results have been predictable. How is this "a plan," when it's really about profoundly corrupt and ignorant businesspeople and politicians repeating history? You don't plan to do that, especially when you're repeating history to save an already dying power structure. It's semantics, word games.

In her editorial, "Welcome to the Final Stages of the Coup," Alexandrovna tells us what most of us already know about "the Business plot" from the 1930s when various members of Wall Street (including a Senator Prescott Bush, though behind the scenes) attempted to seize power by paying-off WWI veterans and military leaders to take Washington by force and to make a puppet of executive branch.

Sure, it's relevant to now...but?
Now, if you do not yet understand that the Wall Street crisis is a man-made disaster done through intentional deregulation and corruption, I have a bridge in Alaska to sell to you (or Sarah Palin does anyway). This manufactured crisis is now to be remedied, if the fiscal fascists get their way, with the total transfer of Congressional powers (the few that still remain) to the Executive Branch and the total transfer of public funds into corporate (via government as intermediary) hands. ("Welcome to the Final Stages of the Coup...," OpEd News, 09.20.2008)
Congress has done all of that willingly and now they're all just trying to survive this whole debacle politically, if not legally. It's just my opinion, but I think Alexandrovna's characterization of the bailout is wrong, and that what we have here is a system that--no matter which way it turns-out--has nowhere left to go except towards substantial reform or a collapse that would take the rest of the developed world with it. Sure, we're all being ripped-off. How is this new?

That's right, even Venezuela, Bolivia, Cuba, Australia, Canada, Russia, China, North Korea, Iran, Syria, Libya, The European Union, the UK, all of it, all fall down as a result of an American economic collapse.

That's not Alexandrovna's take, however. For her, this is all going to work and it was all calculated and not a matter of gross-incompetence, negligence, greed, and short-sighted stupidity. That's a common misreading of American history that I believe will be proven wrong in the next few years. What we already know is that this was all facilitated by both parties in Congress, and that it comes out of a culture of corruption. Much of this is due to the inaction of the citizenry--the voting and non-voting public--though it took a lot of beating-down to get them to the point of apathy they now inhabit. Remember that for her argument to be true, the bailout has to "work," whatever that means. By-all-appearances, it's not going to work for very long, if at all.

What will all that bailout money be worth then? Why put worthless paper in an offshore account? Where will the guilty (the CEOs, bankers, lobbyists, the White House, and Congress) have to run? Nowhere, that's where, and that's why this is really about their survival, not a power-grab. Political and economic elites have had almost unchallenged power for decades domestically and on the world stage, just to bring Ms. Alexandrovna up-to-date.

Alexandrovna and others contend that this all puts more power into the hands of the executive branch than ever before. Sound familiar? That's exactly what was being yelled from the mountaintops when FDR was "handed" unprecedented power to intervene in the economy during the Great Depression, but holders of the "coup" viewpoint ignore the fact that these are very real emergency measures done out of desperation, albeit advocated and authored by those who created the current "man-made" economic-mess.
The administration proposal would be the biggest government intervention since the Great Depression of the 1930s. It would dole out huge sums of money to financial firms to purchase their holdings of bad mortgage-backed securities so that these firms can resume normal lending operations. The bad mortgage debt has been at the heart of the current credit crisis which hit more than a year ago but erupted with special ferocity in the past two weeks forcing extraordinary government actions.

Two weeks ago, the government seized control of the nation's two largest mortgage companies, Fannie Mae and Freddie Mac, and then last week, it took control of the country's largest insurance company, American International Group Inc.

The measure that the administration sent up to Congress on Saturday is a mere three pages in length. ("Paulson resists calls for added help in bailout," AP , 09.21.2008)
And this is all great as well--create a situation where the runaway borrowing can commence again, unhindered. How long can that last? Not very long, because it was borrowing that got us into the mess we're in right now. Admittedly, economics is a quicksilver that often eludes the understanding of the brightest among us, though this writer contends that nobody truly understands its real machinations due to the limitations of human perception and comprehension. That's right, the rest is bullshit and polish.

While it's true that Ms. Alexandrovna was raised much of her life in the United States, she should understand that our history isn't the Ukraine's. Are there troubling-aspects in America's history that tend towards violence? Yes, but not that of Europe or Asia's tendencies towards outright bloodbaths. That's not to say that it "can't happen here"...

Alexandrovna and others should look to the period that led to the collapse of Tsarist Russia for some answers: this is what happens when a system is ending, when it is collapsing. There is repression. There are police state measures passed. Rights become tenuous and are rolled-back, and then, after a time, it ends and things tend to quiet down and "normalize" as much as they can and a new order emerges. Without a sincere solidarity and restraint, you get the Soviet Union, you get tyranny. Sometimes they occur regardless of what we do.

Yet these systems inevitably end, and nobody can do anything about this. But we have options as players on the historical stage.
The shape of future orders is determined by how we act now and when things begin falling-apart. Strong-relationships are the glue of any viable society. Go make a friend, a real friend. It will be up to the American public to decide whether we end-up with chaos or community. Resorting to senseless and wanton violence will never build a better society. We have to use our heads and do what's constructive. That doesn't rule-out self-defense against repression.

I don't personally believe that there was some kind of a real "master plan" here--that's overestimating the intelligence of the members of the Bush administration and their allies, famous for their delusions of adequacy. No, they're corrupt and they and the interests they represent would have sank-into-oblivion sooner rather than later without their war on terror and their bizarre economic policies.

What we have are hollow economic arguments hitting-up-against cold, hard reality, it's that simple. They aren't alone in failed-theories and constructs, as we have creatures like Alex Jones and Larisa Alexandrovna telling us that all is lost. What's really happening is that the obvious limitations of their own theories and historical perspectives have also played-out, just as those of the neoconservatives.
What will they all do without each other when a coin needs two-sides? At best, all these so-called "progressives" accomplish is the demoralization of the rest of us into either a wild panic or an apathetic resignation to the great events of our time when they should be making constructive suggestions as to what to do next. That's exactly what the powerful want, and it's time for Americans to start thinking for themselves, my own humble suggestion.

The sky is falling, but it doesn't have to mean a total catastrophe. That's up to us within certain parameters. If handled with a cool resolve, constructive-thinking and action, and a dedication to cherished values of friendship and solidarity, it could mean a very real move towards democracy unlike ever before witness in human history. The opportunities are there, and they're being missed and/or ignored by the likes of everyone from the totally irresponsible Alex Jones to the sad Larisa Alexandrovna.

Believe in yourselves, think before you act, and do what's right for yourself, your families, and your country. There's no reason to stop there--people throughout the world need a better life, and they're out there waiting to take our hands as brothers and sisters in troubled times. Friends are everywhere, but beware, and use your head.
Alexandrovna strikes me as a would-be power broker who fears the voice of the people. She can speak for herself and leave the rest of us out of it.

"Welcome to the Final Stages of the Coup...," OpEd News, 09.20.2008:

"Paulson resists calls for added help in bailout," AP, 09.21.2008:

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