Monday, September 22, 2008

Paulson's Unpleasant Economic Chemotherapy

Something smells in the basement. It's either really bad meat, or very good cheese. I think Sammy the wonderdog is taking out a colony of mice down there. I don't know if Sammy is killing them out of natural hunting instincts, or she doesn't appreciate that mice and large dogs don't make good playmates. Kind of like when Lennie accidentally kills Curley's wife in Of Mice and Men because he strokes her hair too hard, not realizing his own strength. Either way, she's better than a barn cat, and is always happy to see you when you come home. You can't buy that kind of love - well, I guess you can, but you'll eventually need to get some blood tests and penicillin.

The Treasury Department's planned Wall Street bail out spear headed by Secretary Hank Paulson is giving many of us pause. The thought of such a large distribution of Federal money to the private sector at the expense of the taxpayers should cause any conservative to cringe. There are screams coming from both sides of the spectrum for decidedly different reasons, but National Review's Victor David Hanson puts some much needed perspective on the situation.

"In the sudden rush to blame the (supposed) crooks in DC and on Wall Street, we should first take a long look in the mirror. For two decades, we — as in we Americans — expected to buy homes, flip them, and walk away with thousands — without much thought about what might happen to the johnny-come-lately at the bottom of the pyramid when the game was finally up and housing prices cooled or crashed. Walking away from a mortgage on a house with negative equity was "smart;" putting someone in one who had no ability to come up with a down payment, monthly payments, taxes, and maintenance was "fair"; borrowing unduly against equity for cash expenditures was "understandable.

"We deified the masters of hedge funds, derivatives, and subprime mortgages, forgetting that passé oil production, mining, farming, manufacturing, engineering and construction were the real sources of our material wealth.

"We assumed mega-returns on our portfolios, without a thought what Wall Street did to get them, or the effect on others who needed to borrow at such high interest to run their businesses. Ours became a culture that wanted larger cars but less drilling to fuel them, more stuff and more credit from — and more anger at — the Chinese; less taxes but even more government hand-outs; ever more electricity, but fewer icky coal and nuclear plants — and always more health-care, education-care, prescription drug-care, housing-care, and always less care how to pay for it.

"So by all means let us prosecute the lawbreakers, finger-point at the enablers, lecture the stupid, but at least spare us the sanctimonious "they" did this to poor "us." If there were not a Senate Banking Chairman like Chris Dodd without shame cozying up to the creeps at Freddie Mac and Fannie Mae, or a Richard Fuld playing casino roulette with someone else's money, we would have had to invent them.

"We should argue over the course of Paulson's unpleasant chemotherapy to deal with these symptoms of a metastasizing disease, but let us at least consider what were the catalysts for that deeper cancer."

Keen insight from a brilliant guy.
Enjoy one of my favourite songs, Wave Of Mutilation, by the Pixies, with my apologies for the dumb youtube video.



No comments: