Tuesday, September 30, 2008

All We Need To Know

Am I the only person who feels that media coverage of the latest Wall Street turmoil and the efforts to pass the "Emergency Economic Stabilization Act of 2008" has been lacking? I can't escape the feeling that we're being told over and over again that it's important that this thing pass, and the airwaves are full of dire warning of the consequences, but the entire scenario is no less opaque than it was when President Bush warned us that the Sky was falling and Henry Paulson submitted a plan that explicitly rejected any sort of Congressional or Judicial oversight of the Treasury Department's relief efforts. At the same time, this whole thing is often described as Wall Street foisting off $700,000,000,000.00 of their mistakes onto the taxpayers (who we are made to feel are just us ordinary joes, even though Wall Street executives and large corporations pay taxes, too) and walking away clean. The Anglican Church has weighed in on the plan, complaining that it would only take "$5 billion to save six million children's lives." and that "World leaders could find 140 times that amount for the banking system in a week." The Archbishop of York clearly doesn't understand that the EES money isn't meant as a giveaway, in the way true charity is supposed to be, but as an investment that could be reasonably expected to return at least some of the money. But since very few other people seem to either, I suppose it's only to be expected.

A lot was made of the fact that the Dow had its single largest one day POINT drop in history. But that's because there were more points to drop. In percentage terms, more of an absolute measure, the drop was the 17th largest. Still a big deal - but not the biggest catastrophe in the world. But the coverage seemed tailor-made to get people running scared.

In the end, I want the facts, just the facts, and a decent amount of the facts - and then I want to be able to make a semi-informed decision on whether or not this really is a good idea, or as urgent as we're being told that it is. Of course, it's really not possible to go from Zero to Educated in this way in a short span of time. And that's the problem. A whole raft of factors and interests have banded together, through both chance and design to render the whole system so opaque that the only thing that anyone seems able to say now is "trust us." And that's hardly been a plan with good outcomes in the past. So, as John McGuiness so correctly points out, "people need something to demonstrate that we’re not being played for suckers."

But I don't think that we'll ever see that, because I suspect that we ARE being played for suckers. And while the financial press seems to be telling us that we're not being duped, they aren't doing so in such a way that allows one to independently reach that conclusion. Although I suppose that its more accurate to say that the game has been rigged so that if Wall Street loses, everyone loses (while also allowing Wall Street to win while millions of us lose). But it's also true that Wall Street isn't a single entity, any more than "Main Street" is, and to a degree, this mess is something that we would have seen coming, if we hadn't been so busy trying to line our own pockets with what we decided was free money. In the end, our financial system is choking on the very mechanism that it designed to keep up a continuous transfer of wealth up the food chain. Yes, It's going to be painful to press the reset button, but forestalling that isn't going to help the hoi polloi any - and the pain will just be that much greater when it actually does require pressing.

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