Wednesday, October 01, 2008

My economics maven cousin's analysis. Sounds correct to me but then again I'm no math/economics wizard as most of you know!

The Goose and the Gander

The major, overwhelming mistake our government made in the so-far failed bailout is not including the American public in their deliberations. The administration, Paulson and Bernanke, and our legislators, while totally willing to saddle the taxpayers with almost a trillion dollar debt, meet behind closed doors, offering us no transparency on their decisions.

This is exactly what we have been subjected to over the last eight years, especially with the war in Iraq: secrecy, smoke-filled room decisions. There have been no explanations of, or accountability to, their many special interests and corporations who reaped the only rewards from these murky, hasty decisions. So now Joe and Jane America have loudly voiced their disapproval of any bailout. Their (mainly Republican) lawmakers have heeded those warnings because we do have an election right down the road.

This is perhaps the ultimate irony. After Bush, crying “wolf” one time too many, has warned us repeatedly about this crisis or another, the public is very reluctant to believe him about the imminent financial unraveling now. Truth be told, and believe me I DO NOT have a great grasp of this situation, we probably DO need some kind of governmental, regulatory package. Many freighters are sitting in ports all over the globe waiting to be refueled, which can not happen until their line of credit opens up again. The same holds true for commercial airlines: their constant need to refuel is based on a line of credit from their suppliers. Also, many municipalities can not raise the funds needed to make new infrastructure investments or repairs to the existing ones. They need to fund these projects with new bond issues. These new municipal debentures, in this tightened and iffy credit reality, can not get funded. Thus, the repair and new construction of schools, roads and other municipal obligations are not happening. Also, this drying up of municipal funds has serious effects down the road with respect to job creation. So without knowing the extent of specific repercussions of this credit crunch, there is and will be some very negative effects. The severity of this crisis is probably somewhere between the dire predictions of the Feds and the “screw Wall Street” attitude of the public. But how ironic is it that now, when we most likely really DO have a crisis on our hands, the members of Bush’s party refuse to believe him and take action?

Which brings to mind another observation: yes, an unaccountable and greedy government and Wall Street definitely must take a large part of the blame. BUT SO MUST MAIN STREET. Their mindset of take while the taking is good has been just as culpable. Not only has the government been irresponsibly spending money it doesn’t have, but so too have individuals. What is the average American’s credit card debt? $10,000? $20,000? When offered a mortgage that seems too good to be true (damn the small writing that makes those mortgage payments double, even triple, in three to five years), Joe and Jane signed on the dotted line without first doing their homework.

So now Joe and Jane want a bailout too. I do believe that after all of these years of trickle DOWN economics, we should try the trickle UP sort. So start with the public, instead of Wall Street. But know, that just as their must be CONSEQUENCES for greed based, stupid behavior on the monumental scale of the government or corporation, so there must be CONSEQUENCES on an individual basis. It is just like a bratty kid who, in order to change his horrible behavior, must suffer some consequences followed by consistent vigilance.

So of course, help out the average American. Give him some peace of mind by raising the FDIC insurance on bank accounts to $250,000. Do away with some of those taxes that unfairly hit the middle class. But by all means, do not remove all the consequences of his naive, if not greedy, behavior that got him into this predicament in the first place. What’s good for the goose is good for the gander. If the government and corporations need to be accountable for their irresponsible behavior, so must the average American.

Let us institute new regulations to stem the possibility of future debacles and do our best to enforce them. For the short term let us indeed put into place those policies that would safeguard our economy and financial well-being. But the greed and foolhardiness, exhibited on a governmental, corporate and individual level can not, MUST NOT be totally erased. Some pain must remain, some consequences must result.

The government, big business AND the regular American must work together on these issues. The American taxpayers must be included on the debate and policy formation, not just handed the bill for it. When that happens, IF that happens, maybe the resulting shared responsibility can lead to shared goals and shared prosperity. Or at least, government, corporate and individual solvency. I would settle for solvency, wouldn’t you?
The goose would, and so should the gander.
The sickening views or -- LACK OF THEM -- of Sarah Palin are astounding. Even I, an amateur, formed political opinions after honing them over decades. The opinions I maintain have been determined after much study, much interest and a HUGE amount of continuous reasoning. I did much study in college but continued that study life long. My opinions, too, required standing on the shoulders of many giants who make up authoritative thought on different sides of the political debate. How a Vice Presidential candidate could be SO ignorant and so unable to enunciate a complexity of thought or of any thought is incredible to me.

Some of the questions she was asked could have been finessed easily. She was asked what Supreme Court cases she considers important BESIDES Roe v. Wade. She could not answer. I would have thought the FIRST Supreme Court case for her could have been Bush v. Gore. This case is probably the rationale that she is running on the McCain ticket today.

How about Marbury v. Madison? Any student of government knows this was THE landmark case during the nascent years of our nation in 1803 which made possible the right of judicial review and established the Supreme Court as an interpreter of our Constitution. There are, of course, EASY ones known to high school students such as the Dred Scott Decision reinforcing our most long-lasting racial divide which lead eventually to the Civil War, one of our country's most defining moments.

I thought of the 1962 decision of Baker v. Carr which began the judicial mandate of one person one vote. I also thought of Griswold v. Connecticut establishing a right to privacy not specifically enumerated in the Constitution. Of course, one of the MOST important landmark cases Brown v. Board of Education which overturned the long standing separate but equal decision of Plessy v. Fergusson she SURELY should have known. These cases are basic to the foundation of our Republic. CERTAINLY a vice presidential candidate should know them and it is nothing less than staggering that she knew none.

MOST unbelievably, though, she could NOT name MAGAZINES when Couric asked her which ones she read. At least she COULD have said Time Magazine or Newsweek. Okay, maybe the New Yorker or the Atlantic would be too liberal or Reason Magazine, Foreign Affairs or Le Monde would be a bit cerebral. HOWEVER, Sarah Palin is a Vice Presidential candidate one heart beat away! Perhaps she could have said the conservative National Review reflecting her own alleged point of view. Maybe she does read Field and Stream. What does that magazine have to do with being a Vice Presidential candidate? It has as much to do with being a VP candidate as the foreign policy experience she said Alaska's geographical proximity to Russia gave her. I rest my case.