Cider Press Hill

Throw 'em in dungeons

Wednesday, 3:12 pm

By Kate

Sep

24

2008

sunny

Over the past few days, I’ve been watching the goings-on in Washington and on Wall Street—just like everyone else. And like most everyone else, I’m not quite sure what’s truth and what’s sheer hyperbole, either. Aside from the given that we are in big trouble. This government and Wall Street have ‘invested’ all of us into near penury and, they sort of threaten, we’re going to have a Great Depression II if we don’t do something right this very minute. I gather. Of course, the question is—just how big is the actual trouble? And what does that trouble mean to everyone (like you and me) if drastic action isn’t taken Right Now. Has anyone from the gov’t taken the time to explain this to us in detail? They want great gobs of our money, our children’s money, and their children’s money to do the deed, but I haven’t heard any clear and detailed explanations. If so, I’ve missed it and I’ve been paying close attention.

I’ve heard generalized scary memes and platitudes being thrown around. But I haven’t heard anything specific. And that leads me to think that several someones are trying to fleece us some more in order to save their own considerable wealth. I don’t think my meager wealth or yours is anywhere on their radar. I just get that feeling, ya know. I’d kind of like to know whether to expect a Great Depression II even if we bail out all these financial mercenaries. I’d put the odds at better than 50%. What kind of guarantees does Paulson’s revolving $700 billion line of credit offer us?

Today I hear that Warren Buffett has enthusiastically endorsed the largest bailout in humanity’s history. Because, he says, it’s absolutely necessary. Warren Buffett is an influential person and people do listen to him. Now if there’s anyone who understands money, it would most likely be Warren Buffett since he has almost uncountable amounts to it. But the thing is, Warren Buffett just bought a $5 billion stake in Goldman Sachs and he sort of has a vested interest in a bailout. He is quoted as saying, “If I didn’t think the government was going to act, I wouldn’t have done anything.” So, we see that maybe Warren has his best interests in mind first and foremost. I have to discount his concern and enthusiastic endorsement several notches on account of that. Warren is more interested in preserving his money, not mine.

It all seems to suddenly center around Goldman Sachs, doesn’t it? I’ve seen their name in the media more than just about any other in the past couple of days. That makes me suspicious. I do know that our Treasury Secretary was recently their CEO who raked in millions and millions of dollars during the height of the housing and housing investment boom. He made enough money in one year to finance my entire town’s school budget for the next 30 years. All the while the good times were rolling, did we ever hear him get up on his soap box to demand more regulation and oversight? Or alert the public to the unsound investment practices going on right under his nose? I think not. I’m assuming that Paulson isn’t a stupid man and, therefore, I’m pretty sure he knew precisely what was going on and what the probable outcome might be. Now that all the little greenbacks have galloped out of the stable, now he wants to close the barn door and post sentries? He wants regulation. We need regulation and oversight, he said in front of Congress yesterday. Yeah, and I have a bridge....

So now we’ve had the five big investment houses on Wall Street go under—plus assorted banks, Fannie Mae, Freddie Mac, and the largest insurance company in the world (AIG). To the tune of multiple trillions of dollars, when it’s all tallied up. Because they were stupid and venal and greedy. They ignored every shred of common sense and violated the public trust in so many ways, I’m not sure we can even count them. I’m no economist, but even back in 2005, I was getting nervous thinking the whole thing was going to collapse and thinking perhaps I ought to consider selling my house while it still had value. You think the titans of finance didn’t know the same damned thing?

So, really. I want to know who is going to benefit from this $700 billion revolving line of credit that Paulson wants. Is it all of us or mainly the crooks on Wall Street? I think that since we plebeian masses are expected to foot this bill and suffer the consequences of Wall Street’s excesses in the coming months and years, we have a right to know exactly where the trouble lies in dollars and cents AND names. Do we really need to bail out the rich CEOs who got us into this mess? Will the world end if there is no more Goldman Sachs? We evidently will survive without Lehman Brothers (I’m still curious why they were the sacrificial lambs). Is there a better way for the money to be spent? I’m going to guess that yes, there is a better way. I want answers—crystal clear ones. And I’m not getting them. And, frankly, I don’t expect to.

I think that looting the treasury on this grandiose scale requires something a little more draconian than blank check bailouts and executive compensation, don’t you? I’m all for seeing heads on platters and the venal SOBs who got us into this mess reduced to penury. And jail time. I’d like it painful enough for them to remember it for the couple of generations. I’m vindictive like that and I’ll bet there are a lot of other people who feel exactly the same way. And if they don’t now, they will in the not too distant future, I have a feeling.

Beyond the larceny, this has the feeling of Shock Doctrine (Disaster Capitalism) to it, and I don’t trust that these people have our best interests in mind At All. The longer Congress thinks about it, the better for us. I hope they think about it a good long time. What are the chances? They have certainly heard from a lot of us, me included.

And if all of the above isn’t enough to worry ya, the IMF has informed Bernanke that they will be descending in the next couple of months to do a Financial Sector Analysis—a detailed examination of the entire US financial system. A rather embarrassing and alarming situation to be put in for the US who is, naturally, the biggest and best and most powerful. There’s gotta be some sly pay back in that decision somewhere. Nevertheless, when the IMF gets involved you might want to consider stuffing your mattress and hiding gold and silver coins under your floor boards.