Today, Congress voted down the bailout deal. The markets reacted with panic.
The Dow fell over 700 points, more than the previous record drop, which was immediately after 9/11. The Standard and Poor 500 index dropped over 8%, and the NASDAQ fell more than 9%. Short-term Treasury bills, historically considered the safest investments available, are in such demand that their interest rates have been bid down to, effectively, zero. And gold, the perennial asset of last resort, has been bid up to over $900 an ounce.
The reason we have come to this sorry pass is, in my view, pretty simple.
Long before today's meltdown of the capital markets, Bush and his rogue Republican regime had dangerously and recklessly eroded the basic human capital on which all markets depend:
Trust.
Nobody trusts the lying sonofabitch to do the right thing, even if he has a gun to his head.
More after the jump...
The failure of the markets is, in essence, a failure of trust.
Banks won't lend to other banks, because they can't trust the other bank to pay back the loan. This seizes up the credit markets, and ripples throughout the economy, shutting off access to cash for even sound businesses.
Congress couldn't pass a rescue bill, because Democrats can't trust Republicans not to demogogue the vote, and nobody can trust the Bush administration. Voters are up in arms because they can't trust a dysfunctional Congress, and again, nobody trusts Bush.
Like a feckless playboy, ne'er-do-well scion of a wealthy family, Bush squandered all of the most vital assets of the nation.
After 9/11, we the American people came together as one nation, ready to put aside all self-interested considerations in order to meet the challenge of bloody terrorism on our own soil.
Bush had other plans.
He used the good will and sacred commitment that we the people entrusted to his hands, and he used it for the most petty, venal, and selfish purposes. To win elections. To punish opponents. To start wars of choice on false pretenses. To enrich his supporters. To spy on our own citizens. To torture.
And he lied about it. He lied about it all. He draped himself in the mantle of patriotism and righteousness, while he dishonored us all, and dishonored the nation we love.
Like so many heirs to a great fortune, he had no conception of how the wealth was built up, or that it could ever run out.
And so day by day over the past eight years, Bush, and Cheney, and the rapacious Republican Congress squandered our trust, until it was all gone.
And he never noticed, until the day came when he needed it.
Heads wiser than mine can figure out the short term solution for the crisis in our financial capital markets.
But I am convinced that there is no long term solution that does not address the bankruptcy of our underlying human capital, and work to restore the trust of the American people that their government is still of the people, by the people, and for the people.
For that is the true wealth of our nation, on which all other wealth depends.