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Wednesday Update

What we want to start doing in some of these Wednesday Updates is begin to look at major events in the news in their larger historical context.... And maybe even how some things will be viewed in 5 years, 10 years or even 50 or 100 years...

Subject: The Bailout & More III

(Wed., October 22, 2008)

(approx. 2175 words, 4 pp.)

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This is our third commentary on the $700 Billion Bailout or Rescue Plan. Time will tell how successful it will be presumably, but we are, it seems, in an economic downturn/ "recession" and these things take awhile to work themselves out, even in so called "normal times," which we do not seem to be in? We in the world and America today may be making "history" here, folks, but not the kind you want to make! You can tell your children or grandchildren you lived thru the crash of 08! (Wonderful?) It may be some time before we will be able to look back on this time not in anger, but we will one day, and as it is we are in an election which can do little more immediately presumably than pump a trillion or so dollars into the system, which we have done, and both candidates have endorsed. So where do things stand?

We are in the final days of a pretty nasty Presidential election, and neither candidate has much of anything to say on our economic woes, and both of them have, to varying degrees, been part of the problems that caused this economic mess, which seems beyond a normal economic recession cycle, and which I blame on liberal and libertarian extremism having pretty much taken over our two major political Parties, respectively! And this is all on top of the so called "culture war" struggles about the founding vision for the very purpose of our great nation!!! It is time to end the red state/ blue state nonsense and for every state in our union to become a red, white and blue state!!! And this is true for all matters whether economic, cultural, or Constitutional!!!

In my opinion, there is one current area of debate in particular in which there can be no political compromise for the sake of the nation, and that is in honoring the original Constitutional intent, which both Obama and Biden will not do! The Democrats have for 40 years (in Roe vs. Wade and so much more in almost every area of life and law) openly boasted of the fact that they do not regard the original intent of the Constitution as any longer valid and foundational for the nation. This is a Constitutional political pandering of the most outrageous nature? Biden, bless his heart, (I love him so) even boasted of this virtual shredding of the Constitution in his debate! (But, in truth, one is best off sweeping one’s weak points under the rug or letting one’s opponent bring them up!) The reason why we have this outrageous Constitutional shift is because of underlying cultural and intellectual values which have shifted radically to the left in America since the 1960s and even into morally relative humanism. (Say it ain’t so?) We have a complete loss of traditional values from our Judeo-Christian ethic and heritage, and in many was this current economic crisis, both in its theoretical underpinnings and it actual policies, reflect this loss of tradition values, wisdom and good faith politics and legislation. Why? Because we have gone off into undesirable extremes of the liberal left and the libertarian right, not only in economic areas and so many others. Further, we are not going to sue ourselves prosperity (as the trial lawyers think) nor gamble our way into prosperity whether, using the lottery, the casino or Wall Street, as, apparently, both the liberal and libertarians think! All of this stuff represents the same social, moral, and cultural decline, now playing itself out economically as well as politically. So, what now in the crisis?

Clinton today openly acknowledges that he turned Fannie and Freddie into welfare agencies because of budget surpluses, but unfortunately this put pressure on banks to do the same and put much bad paper into the system, which was then blown unbelievably out of proportion by "free market" speculators leveraging bad paper into supposedly real billions! Wonderful! Neither Democrats nor Republicans who are "fixing" this current problem have any idea how it came about except blaming the other political Party as supposedly completely responsible! However, in my opinion "the crime" for which Clinton will be most remembered and which is little discussed by the mainstream media, is appointing an ACLU lawyer to the Supreme Court. In my opinion, and we all get to have one in this free society, this was "unforgivable." But, now, even the money is no good? No, actually it is still good, it just isn’t as good as it used to be? Remember Anthony Quinn in Lawrence of Arabia after he had broken open a Turkish strongbox full of money, and he held it up and said, "Paper! Paper! ...There is no gold in Aqaba..." And here we are? Declining paper money, declining stock markets around the world, and no real growth after all the various speculation bubbles and leveraged positions have burst?

In 1992 it was "the economy, stupid," but in truth the economy was not so bad, and Gore’s repeated ridiculous claims that we were in the worst economy in 50 years went completely unchallenged by the liberal mainstream media (one can hardly call what comes out of New York these days "journalism"! Yet another national crisis over the last 4 or 5 decades no one is addressing?). However, today, we are apparently in a real economic crisis, but our politicians have either cried "wolf!" or "we can fix it!" one too many times to have much credibility left? They got the $700 billion Bailout by saying soup lines across the country are around the next corner without it! Well, are they? What are McCain’s or Obama’s plans to get us out of these supposed coming bread and soup lines and back to work? Reasonable question? It is the mainstream media and the two Parties who have been hawking this stuff! Do either have any plans? Are we going to get chicken noodle soup or vegetable beef? Will we get a choice of white, wheat or rye bread! Outrageous, even unbelievable what this campaign has come to? Pathetic, even? McCain, I think, has good gut instinct. When this current economic crisis hit, he shot from the hip by saying Wall Street speculators have been playing our entire financial system "like a casino"! Is that true? Yes, and his Republican handlers slapped his hand hard, and he never said it again! Why were they so angry? This was an implicit call for serious and responsible regulation or new regulations on the financial industry, and everybody knew it! Still McCain’s record is no worse than anyone else’s and often better, both in his Party and out. And Obama has not voiced any plans to leave his failed policies of tax, spend, and borrow? The so-called Great Society coupled with the Vietnam War also almost ruined our society economically (known classically as "guns and butter"), and this is also a lesson forgotten by Bush and this current crop of politicians of both Parties, if they ever knew it in the first place! What a mess?

Are the prices of gold and oil up? Yes, no doubt to a degree, but also the value of paper is going down? You never really get off a gold standard? The Federalist Papers warn against paper money, and a simple gold or silver standard may not work well for a variety of reasons, but over the long haul, historically paper money has never fared well? Don’t want to hit this too hard, but we went off the silver standard in the 1970s, and the dollar dropped dramatically in the next few years with 20% interest rates and inflation? And then it stabilized after Reagan, and now we may be going to go through another markdown? Such is life? It may be a fundamental truth of the fallen human condition that if you have a printing press, you are going to use it? Further, if anyone remembers (my family background and friends have been in banking for 75 years), the Savings and Loan crisis was not created by bad management and irresponsible speculation (as today’s crisis), it was created by inflation, and the Savings and Loans were stuck with fixed low interest long-term mortgages that could not could not keep them afloat in times of high interest rates and inflation. This was the origin of variable rate mortgages, no? Economics 101? Lost on the Democrats and Republicans these days? Just as outrageously low stock margins contributed so greatly to the 1929 crash? Also, Economics 101? Also, lost on the Democrats and Republicans these days? Further, the auto stocks used to be called "cyclicals"! What’s new? Again, Economics 101? (Raise your hand if you knew that!) What have the professional politicians of the two Parties gotten right in the last 16 years in particular and even the last 40 or 50 years in general? Almost nothing? Time for term limits? Or, maybe it is just time for a return to traditional values in the larger social/ cultural sense, and then we will have the will and wisdom, heart and mind to apply these values in good faith to all areas of society and not just to economics and politics in both political Parties!

The system, it would seem somewhat self-evidently, is structurally and fundamentally flawed if not outright broken (W and Paulson notwithstanding), and neither political Party is ready to deal with this reality at this time. The only person I can recall who has called for a complete re-structuring of our financial and banking system was Sarah Palin, but that poor girl does not even know the difference between Time and Newsweek! What does she know? All she knows how to do is shoot moose and drill oil wells, and have babies, of course! But her "womanhood" does not seem to count with liberals and feminists! (I wonder why?) In any case, truth is, though other sources should be pursued, no doubt; it is hard to imagine a real energy or economic policy without some domestic drilling! In my opinion, we must do more than "look at" drilling as Obama suggests? How many barrels a day come from "looking at" drilling? (Not too many?) In larger areas Obama was 180 degrees off on the Surge, not a minor matter? And Joe Biden (bless his heart) did not even get Gulf War One right! Good grief, what a no brainer that was! We are in something of a dark hour, and both campaigns leave something to be desired, as an understatement?

This Presidential campaign has gotten pretty nasty in the last few weeks. Why? Because both candidates have little positive to say and so much to shoot at in the other! Apart from the relatively minor issues of today’s economics and politics, no one has much to say beyond "change"! We are in a recession, what’s new? Barring any new major catastrophes, the stock market will, presumably, simply establish a new trading range, whether 8,000 to 10,000, or 9,000 to 11,000 or whatever, in this current recession, does it really matter? However, it is my personal opinion in the bigger picture of history that we may be headed for some very rough storms and waters, the likes of which we have never seen before, and may never see again in the history of mankind, and it is also my opinion that apart from various policy issues and lowering or raising of taxes on the so-called "rich" (who else has any money?!), we need someone at the helm of the ship of state who has personally gone through hell and back, and who knows how to do such a thing, and can lead us through any such social, national, or international crisis, if the need arises, which in today’s world it might easily? Indeed, Biden has assured us of an international crisis, if his man wins! With a running mate like this, who needs an opponent? If people are truly comfortable with Barack and truly inspired by him in these troubled times, he wins, and if not so comfortable and not so inspired by him, he loses? Not too complicated? History will be made no matter what...  First black President, or, the biggest unexpected comeback by McCain since Truman over Dewey! Which will it be? To be continued...