It’s become clear that the Wall Street insiders (Paulson, Kashkari, etc.) who are working diligently to alleviate this crisis that was caused (primarily) by Wall Street insiders don’t know what they are doing and don’t have any actual coherent plan. What they do have is hundreds of billions of taxpayer dollars and the latitude to operate from a make it up as they go approach. It seems a little experimental. This is a $700 billion to $1 trillion experiment that may or may not work as intended, which again begs the question of whether we should be doing it at all. The only known in this experiment is that we will be roughly a trillion dollars more in debt when it’s over. Assuming it’s ever over.
There are two distinct perspectives through which to view this debacle and I vacillate between them depending on whatever mood I happen to be in at the moment. The optimistic outlook is that these guys are making the best decisions they can based on the information they have. I’m all for having a plan but there has to be flexibility sufficient to meet the demands of changing information. I prefer to give people the benefit of the doubt because in my experience it makes for a more amicable existence as a human being.
The other view is that this bailout is just one of the final steps in a satanic-zionist-illuminati-men-in-black scheme to enslave the American public by creating a massive peasant class. The wealth of Middle America is tied up in 401Ks and home equity and values there are plummeting faster than a chili cheese dog sliding down Rush Limbaugh’s gullet. There is a monumental transfer of wealth going on and at this point it is unclear as to who is benefiting although it’s safe to say that Joe Six Pack is screwed as ever at the moment.
A case could be made for either of these two perspectives. One of the weaknesses of the more sinister of the two is that it is not only the middle and lower classes that are having their savings evaporated. There are some obscenely wealthy individuals – old money aristocrats - who are also having their asses handed to them right now. But I guess it could be argued that the elite losers just aren’t in the inner circle or whatever.
Paulson’s more recent talk has revolved around consumer credit, the implication being that more credit needs to be made available to the American public so that we can borrow to buy cars, plasma tvs, breast implants, etc. I’m no economic expert, but this is crazy talk.
Granted, greed on Wall Street and the lack of some common sense regulation on these hocus pocus derivatives are the primary cause of our economic ills. But they aren’t the only cause. And it bears taking a good hard look at the environment which allowed this unbridled greed to flourish in such a destructive way.
America did not get into this mess because we couldn’t get our hands on enough credit. We got into this mess, in large part, because it was too easy to get too much credit. We evolved into a society that is addicted to credit. It was a seeming win-win situation but it shouldn’t have been that hard to see that it was a disaster waiting to happen. Is an economy that depends on excessive consumer credit really a sustainable economy?
The savings rate of Americans is something like -1%. I’d submit that an economy that requires the masses to spend more than they make is an illegitimate and unsustainable economy. In addition to the greed on Wall Street, some of the blame falls squarely on the American public and a culture of instant gratification and rampant, pathological consumerism.
Also, I’d posit that the economic fallout is just an outward symptom of a deeper problem that pervades our society. Whether that problem is a philosophical, spiritual, or psychological one is something the reader can decide based on their particular disposition but what is happening now should be a clear indicator that our value system as a society has finally gotten so out of whack that living in denial is no longer an option.
It could be possible that what we are seeing now is a forced rebalancing process where there is a shift away from crass materialism and conspicuous consumption and towards a more balanced and responsible way of living. Since it is obvious that society would not willingly make this change for the better (the forces working against such a positive change are formidable) it could very well be that the Universe, Fate, God, Karma, or whatever, is making the decision for us. It might be a little painful at first, but growing up always is.