George W. Bush tried as hard as he could to kick the financial can down the road. He figured that since he was able to push Iraq to the next president, it wouldn’t be that difficult to dump the encroaching financial debacle to #44. He missed by 127 days. Timing is a bummer isn’t it.
So what does a President do when he realizes a crisis of epic proportions is staring him in the face? First this president uses the Dick Cheney-inspired bunker mentality and avoids the spotlight for a few days. Next he emerges from some "very hard work" to give a 90-second "address the issue" speech on Thursday that basically states he is canceling a trip. Then he comes out on Friday surrounded by his "team" for a nice photo op at the White House. Finally a few phone calls to order his surrogates to hit the media trail and tell the clueless and gullible press that "the President is very engaged." What this president has NOT done for this crisis is inspired leadership, determination or a sense of urgency. Until he was forced to.
What George W. Bush has done is effectively turned the executive reins over the Henry Paulson, the Secretary of the Treasury. President Hank Paulson. Vice President Ben Bernanke.
We should probably thank him for that. After all, everything President Bush has touched in both the private and public sector has turned to crap. Paulson at least isn’t batting .080, didn’t trade Sammy Sosa, and trash a bunch of oil companies.
I don’t like Hank Paulson. Anyone who sells his soul to work for the Bush Administration, no matter how smart they are – is making a Faustian bargain. But Paulson is an intelligent and I believe well-meaning person (well more well-meaning than most of the Bush administration) who actually does care about fixing the mess. Bush is neither of those. On the other hand, I do also believe Paulson wants to help his buddies on Wall Street. And that is a problem. A Wall Street guy fixing a Wall Street mess so his Wall Street buddies don’t have to start driving Fords instead of BMWs. Something doesn’t sit right with this.
But Paulson at the helm just has to be better than Bush at the helm. Anything is better than Bush at helm. This is not a financial Katrina – it is worse. George W. Bush, the WMDs you joked about being missing – well they have been uncovered – buried under Credit Default Swaps, Mortgage Backed Securities and uncollateralized loans. This is no Katrina, it is a financial Hiroshima.
I don’t know if Paulson can do it – can he enact a plan get the US economic engine started again. In reality I don’t think he will be able to pull it off, the problems are just too complex, intertwined and endemic for a $700 billion rescue – and they are based on a lot of assumptions that may or may not come to pass. A lot depends on the behavior of the nations funding our debt -- China, Japan, Russia, the United Kingdom and OPEC. Not only will it take trillions (not billions), it will take a complete revamping of securities law and the willingness of the American people to endure some pain. While you can bet there will be new and more regulations, you can be sure those laws will be drawn and enacted based on political considerations, and NOT on economic ones. As for the last point – we all know that the spoiled American public does not want to endure any pain. After all – don’t we still hear a roaring chorus of - "the Democrats are going to raise my taxes." The total myopia of the American public is nothing short of stunning.
Well Miss Red-state voter, no matter who wins – read my lips, taxes are going up. Someone has to pay this piper.
I don’t know if Paulson is doing the right thing by bailing out an entire system in complete disarray due to years of woeful ignorance, dreadful mismanagement and unabashed greed. If you had to pin me down – I would say let the whole House of Cards collapse and let’s start over – knowing the pain would be harsh, enduring and unforgettable. But after the fall you would have to keep any Republican or Grover Norquist-type far, far away from recovery and rebuilding. The buyout by the government is probably just another band-aid to a long-suffering, one-sided, illogical and self-serving financial system. I don’t know if an entire set of new rules would make it any different or better. Somehow I doubt it. The cards are stacked against anyone who isn’t in the John McCain defined middle class – you know the $4 million middle class. What a mess.
Watch the fear-mongering (and blame Clinton cheering) start ramping up from the right wingers. Republicans have been the masters of governing with fear. They perfected the technique with the Patriot Act, with the phony reasons for going to war in Iraq, with allowing torture, with FISA, with trashing the Justice Dept., with Cheney’s secret energy committee, and with countless other tactics. The difference this time is that they are now dealing with people’s real fear of going broke.
You have grandma’s Social Security check, the 9-5 worker’s 401K and with the life savings of millions of people all at risk. This is not some ambiguous fear of terrorism they can capitalize on. It is a real fear of eating dog food, being housed in McCainvilles and living The Grapes of Wrath. Wall Street gambled with ordinary people’s money and lost. Bush (and to be fair Reagan, Bush 41 and Clinton) allowed it. The party is over. This is the Bush legacy.
This week also showed how woefully unprepared and ill-informed John McCain and Sarah Palin are about economic matters. They are in way over their collective pea-brains. McCain initially kept claiming "the fundamentals are sound." Then he blames Obama and accuses him of accepting payola (which has to be the most laughable claim of this entire campaign). Then he talks about re-regulating the very system he helped de-regulate. Then he presents himself as this populist reformer (oh please stop the pain). Then he wants to fire Christopher Cox (the head of the SEC). Cox is an ass, but firing him is not going to fix this, and his blame is probably minimal. Palin was pulled from just about all events and appearances – they cannot risk putting a complete moron about these issues in front of anyone that might ask a tough or probing question. Then the polls started to shift.
Carly Fiorina, the former CEO of HP who managed who run that company into the ground, finally did something right this week – she said that McCain or Palin shouldn’t be running a company (she also then quickly added Obama and Biden when she realized she stepped in doo-doo). She is right McCain and Palin should be kept far away from USA, Inc. Every Republican should be kept far away. (As you would expect when any Republican lemming goes off message -- you vanish from public view. Carly will no longer be seen on TV. She definitely also blew her chance at a cabinet post).
Time to start whining -- hail to the chief – Hank Paulson