Wednesday, September 24, 2008

On Second Thought


On second thought, let us fix the foundation before we pour more money down this rat hole.

The $700 billion all at once is a lot of money, but that does not mean it will be put to work all at one time. This we know from the testimony of Secretary Paulson. But something is bothering me about this deal, this infusion of fresh cash that I can not quite put my finger on, but I think I am getting close.

The need is there, there is no question that $700 billion will help mop up a lot of bad debt on the books of many commercial banks. My problem is not with the need, but with the system. When will reforms take place? Do you throw money into a system before the footer and foundation are redesigned? Or, before the reinforced concrete is poured? When does the foundation that supports the whole structure get redesigned and rebuilt?

The Federal Government and the lobbyists that run the politicians do not have a great track record when it comes to reform lately. Everyone knows where the money for reelection comes from on K Street, so what is the incentive to put in place the needed regulation, oversight and auditing that I and others have been talking about for some time. Oh, one more new word, and I love this one, transparency. In the hearings yesterday, the word transparency was used quite often by Secretary Paulson. You would have thought that that was a new word for Washington.

I wish these hearings before Congress were held in the evenings so people that work during the day could watch the hearings if they wanted. This stuff is not that difficult to understand and if more people listened and watched these hearings, perhaps more pressure would be brought to bear on the politicians and government officials. The few retired old people and journalists that watch this stuff is not enough to bring about the change that is needed. We need a mass conversion of political philosophy. From an emphasis on deregulation to the realization that greed & fraud and fraud & greed need to be stamped out of existence, and a new and improved political-economic philosophy needs to be ordained for the United States today . When the Congress and the administration can walk on the water in front of the Lincoln Memorial, then regulation will not be needed. But, until then, the Federal Government better get out the laws from the ‘30’s and ‘40’s and learn from their stupidity and greed of the recent past. The philosophy that regulation is not needed and that it costs too much is pure crap. The cost of ineffective regulation as the Republicans would have it is costing this country trillions of dollars!!! If the majority of people do not understand what brought about the present economic mess and do not vote out of office a political-economic philosphy based on greed and stupidity, then this nation is indeed on its way down. The final chapter of this once great country is being written.

Stay tuned.

6 comments:

LceeL said...

No Fred. This is still a great country. And this is not the final chapter. It may be the last chapter that you and I get to be party to, but I'm pretty sure the final chapter to this one is a long way from being started.

The character and nature of the people of America haven't changed that much. There is a need, yes. And the man in the bib overalls and the lunchpail in his hand is starting to get up, to rise up, to make his loud and forceful voice heard. We will hear it in November. the WORLD will hear it in November. The AMERICAN is coming back.

moneythoughts said...

Lou, I sure hope you are right. But, to be fair to what I wrote, the final chapter would be close at hand IF the majority of voters continue to vote for people that represent a political-economic philosophy that ignores reality and pursues deregulation. Deregulation does not work. If the majority of voters can't figure that out by now, then, it is my opinion, that the final chapter is not far behind. The cornerstone of the Republican Party's political philosophy is deregulation. From Reagan to Bush to Bush, they have taken apart the safeguards that were put in place during FDR's administrations to protect the average American worker, with or without lunch pail. The Republicans hate FDR and the New Deal that he created to protect the people. The bottom line is that greed hasn't changed in 100 years. We will see this November how smart the people are.

Kathryn Brimblecombe-Fox said...

Dear Fred,
It seems to me that the foundations crumbled because they were actually non-existent in the sense that poor quality loans and their derivatives etc were merely simulations...pretend. I suspect we have now witnessed the insidious underbelly of post-modernism's slippery play with simulacra and its narcisistic tendencies. So, if this is the case then deregulation became one of the 'toys' of the 'pretend game'. Serious stuff. But how to create foundations which are firm yet flexible enough to move with the times and simultaneously accommodate the needs of the collective and the individual both existing in a globalised world yet also lived locally? The current dilemma is an opportunity in this sense... when you look at it from the outside.

We are watching the US very closely over here!
Cheers,
Kathryn

moneythoughts said...

It is not that deep. For this you will have to believe me. The assault on regulation was real. The safeguards and protections that were developed in the 1930's and 1940's would have served us well today, but the philosophy that the markets will regulate themselves (Milton Friedman, Ayn Rand and Alan Greenspan who lead the charge for deregulation, and was picked up by the Republicans that represent the business class in the United States, saw not only the tearing down of regulation, but the acutal deemphasis on enforcing the laws on the books. The rating agencies gave their stamp of approval to the sub-prime mortgage bonds and the big investment banking firms were only all too happy to make nice fees from underwriting junk. Greed, Greed Greed. Now they want a bailout.

winslow said...

I am hoping for an overwhelming victory for Obama. If the results are so lopsided as to be the greatest in history, this will be an inspiration for America.

moneythoughts said...

Winslow,

This is going to be a close election and Obama is going to need to have good weather and follow through by young voters that say they are voting for him. This is going to be a lot closer than I would like it to be. Go Obama-Biden