Friday, September 19, 2008

Bush on econ crisis: I got nothin’

With the US economy in crisis and the markets in something close to freefall Wednesday, the White House let it be known that President Bush would deliver an important statement come Thursday morning. At about a quarter after 10am yesterday, Bush stepped to a lectern placed in the Oval Colonnade and read the following:

The American people are concerned about the situation in our financial markets and our economy, and I share their concerns.

I've canceled my travel today to stay in Washington, where I will continue to closely monitor the situation in our financial markets and consult with my economic advisors. I spoke to Secretary Paulson this morning, and I will meet with him later on today.

In recent weeks, the federal government has taken extraordinary measures to address the challenges confronting our financial markets. We've taken control of Fannie Mae and Freddie Mac -- the home finance agencies -- to help promote market stability and to ensure they can continue to play a role in helping our housing market recover. This week, the Federal Reserve acted to prevent the disorderly failure of the insurance company AIG -- a development that could have caused a severe disruption in our financial markets and threatened other sectors of the economy. Yesterday, the Security and Exchange Commission took action to strengthen investor protections and step up its enforcement actions against illegal market manipulation. Last night, the Federal Reserve, in coordination with central banks around the world, took a substantial step to provide additional liquidity to the U.S. financial system.

These actions are necessary, and they're important. And the markets are adjusting to them. Our financial markets continue to deal with serious challenges. As our recent actions demonstrate, my administration is focused on meeting these challenges. The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.

Thank you.

And that was it. Bush took no questions, and submitted no supplementary materials.

This, of course, is not an important statement—it is a recap. There are no proposals or directions here, no new policies, not even a hint that the president might have a next step up his sleeve. Nothing.

Needless to say, this statement did nothing to calm the markets. What, you say, but the markets rebounded on Thursday—the Dow had its biggest one-day gain in years.

True, but that gain is even more impressive considering that after Bush made his remarks, the Dow had actually continued to fall another 200 points. The late day rally of some 600 points was not because of the US president’s words, but because there was a rumor circulating that Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke were close to announcing a plan of their own.

Paulson and Bernanke, along with the recently unpopular SEC head Chris Cox, did meet with Congressional leaders from both parties on Thursday night, but they emerged several hours later with no plan to announce.

Senate Majority Leader Harry Reid (D-NV) said he expected a proposal from the Administration not in days, but “in a matter of hours,” but, as of this writing, there is still nothing to report.

Asian markets are as of now holding their own based on the continuing belief that Treasury and Congress will craft a deal. . . a deal to bail out the multitude of troubled financial institutions.

Should Paulson, Bernanke, et al. disappoint, however, expect to start next week with another round of financial panic.

The problems here are myriad, but let me just focus on one: what are we doing hanging on every word from a disengaged, incurious, and uncaring president; what are we doing betting the house (no pun intended) on a last-minute deal for another stopgap government bailout?

This crisis is not a surprise—none of it. The Bear Stearns collapse was in March; the subprime mortgage bubble burst last year. And yet, the current administration—the CEO President (remember that boast?) and his pro-business brain trust—did nothing to reform the system; they didn’t even do anything to minimize the risk to the system.

Instead, we get the continued privatization of wealth hand-in-hand with the continued socialization of risk. The upper echelons of bank/investment house/insurance industry management continue to be rewarded for pushing financial instruments designed to skirt regulations and maximize short-term gain; when those schemes fail, the government must attempt to walk a lose-lose line between public expenditure and global economic fallout.

President Bush, as evidenced by his “important statement,” has offered zero leadership and zero desire to reform the system. The man who wants to continue his Republican economic policies, John McCain, has looked just as ridiculous. He opposed the AIG bridge loan before he was for it, he proposed a “9/11-style commission” to examine the roots of the crisis while almost simultaneously bragging that, as head of the Senate Commerce Committee, he had a hand in every aspect of this economy, and he claimed he would, if elected, fire SEC Chair Cox, even though he helped confirm him, can’t legally fire him, and won’t get the chance to try because Cox has made it clear he leaves with the current administration—and that was just this week.

It would be amusing if it weren’t so terribly real. Jobs will be lost, life savings will disappear, homes will have to be abandoned. Bush has personal wealth and a federal pension, Wall Street CEOs have gargantuan compensation packages and golden parachutes, and John McCain has his twelve houses and Cindy’s beer money. But American workers (you know, the “strong fundamentals” of the American economy), what do they have?

In too many cases, after decades of market deregulation, tax cuts for the wealthy, and Republican class warfare, they have what Bush had on Thursday morning—nothing.

(cross-posted on The Seminal and Daily Kos)

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Anonymous Anonymous said...

I hope we can all remember that George Bush is just the front man for a whole gang of people who picked him as their figurehead, gave him speeches and photo ops to perform, opened the gates in the decaying walls of decency and common sense that sort of protected what was left of the social contract, brought the Trojan Horse of “neo-conservatism” inside, and helped the smarmy few do what they have done for the last eight years. So George can say, like John Belushi to Carrie Fisher in “Blues Brothers,” down there in the tunnel, after he left her at the altar for the fifth time, “It’s not my fault!”

And let’s remember that these folks, who some of us call “incompetent,” have actually done a VERY competent job of transferring trillions of dollars from public pockets into private ones. Even the Iraq war reflects an enormous, cynical dump of this country’s wealth into the insatiable military-industrial maw and into an unaudited black hole – recall the billions in $100 bills packed and loaded on pallets, delivered by U.S. military transport aircraft, set on loading docks and just picked up and driven away in bulk by nobody-seems-to-know-who. And as one small example, check the deployment of the V-22 “Osprey,” supposedly intended to replace the CH-46 and CH-53 in moving Marines into combat, that is “in Iraq” to justify the hundreds of billions it costs but not allowed, of course, to fly in any area where it might do the mission it was peddled for.

The scope of the theft and fraud is so large that it boggles my poor mind, at least – Teapot Dome and everything that’s gone before is just pickpocket chump change. And now the Masters of the Universe tell us we have to bail THEM out, sounding just like the kid who murdered his parents and then demanded clemency because he was an orphan.

Of such conditions do revolutions come. Maybe it’s a good thing that the NRA has ensured a heavily-armed citizenry after all, though I would bet that most folks with weapons of any consequence think the powers that be are doing a fine job. And of course the military, and even Blackwater, still outguns all of us.

By the way, has anyone seen Dick Cheney lately? Why does it feel like the spring of 1933 in the Weimar Republic days of Germany? Everybody ready for a new kind of “nationalization” and “mobilization?”

11:06 AM  

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