Yes, I’m seething. For once it seemed that the House was going to get over its silly jitters and approve the financial market bailout compromise package that was hammered out over the weekend. Yesterday, Sunday afternoon a compromise seemed to be in the cards after another initial obstacle, earlier, when a group of House Republicans got in motion. But now, the hard work done over the weekend has been torpedoed by a mishmash of irresponsible morons, who just can’t seem to get the hang of their daytime job.

The immediate result is as obvious as it disastrous: Wall Street ditched about 7% of its stock value: the biggest drop ever recorded in a single day by the Dow. Boom! And alongside that crisp sound of burning billions, a massive political disaster presented itself, too: it wasn’t Bush’s bailout that which failed, it was a major, national emergency package to help keep nothing less than the global financial market on its feet.

Somewhat amazingly, the initiative showed the President in a far more active and facilitating role than he had accustomed people the world over, during his two miserable terms. He actually successfully enlisted – no doubt aided by strong urging from the Secretary of the Treasury and the Chairman of the Board of the Federal Reserve – two presidential candidates locked in a head-on electoral battle. They could have taken any of a myriad of alternative approaches, yet chose to broadly support both the necessity of a Big Package and its general outline. Undoubtedly, some awfully fierce behind-the-scenes wrangling must have preceded their by now famous but sadly orphaned joint appearance at the White House, together with congressional leaders and representatives of both parties. The thing is, they did it, and both electoral opponents went on record affording their visible support for the initiative.

Sadly, not even a gesture as significant as that appears to have seized the attention of a significant majority of congress representatives. I think it’s pertinent to recall the joint statement released by Senators Obama and McCain, prior to their White House meeting. Reading it again gives a rather acute perspective on what I’d call the concept of the soft power of candidates, or leading by attitude. I’ve highlighted what I think are the salient bits:

The American people are facing a moment of economic crisis. No matter how this began, we all have a responsibility to work through it and restore confidence in our economy. The jobs, savings, and prosperity of the American people are at stake. Now is a time to come together – Democrats and Republicans – in a spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush Administration is flawed, but the effort to protect the American economy must not fail. This is a time to rise above politics for the good of the country. We cannot risk an economic catastrophe. Now is our chance to come together to prove that Washington is once again capable of leading this country.

Keeping those high-minded words present, let’s take a look at what the Speaker of the House had to say in support of the bill. Maybe you, too, are thinking that a crucial vote on a vital and massive rescue package warrants an ardent appeal to reason, a staunch defense of this bill, and why its passing is so imperative, with as broad and bipartisan support as possible, especially from someone who holds such a highly visible and symbolically significant position. Well… Just watch the freak horror show that Nancy Pelosi chose to unleash, instead:

I can’t blame that dozen or so House Republicans too much, when they blew up in anger, and decided to somehow let Nancy eat cake, in the wake of that brazen attack on the waterline of that bill. I don’t believe I have seen Nancy Pelosi ever being more persuasive in her campaign to throw herself out of Congress, led by her perhaps also somewhat nutty but at least more predictable challenger, Cindy Sheehan. Then again, while Pelosi enthusiastically did away with an already strained differentiation of kindergarten and congress politics, those twelve House Republicans surely bested her effort, by promptly turning around and then killing the whole darn thing: in yer face, America! Well… Well done, you presumptive adult idiots, well done.

Seemingly, a “senior aide” of Pelosi saw fit to be dismissive with a straight face of the angered Republicans’ charge that it was Pelosi who had stoked up that awful partisan beast, with this ballsy statement: “You don’t vote on the speech, you vote on the bill.” Could be. Except for the niggling fact that, if indeed that bill is somewhat important, and sufficiently so to become somehow worthy of a broad, bipartisan and issue-oriented support, one expects a solid defense of that bill on its merits and, why not, some liberally (teehee) thrown in passionate appeals to reach across the aisle, sing Kumbaya, save the day and rescue the kingdom. I mean, instead of an excoriation of those on whose support the darn kip and kaboodle hinges. Talk about chutzpah…

I don’t know what’s more damaging, far beyond infuriating: the rejection itself, with that 228-205 House vote, or the happily bipartisan fashion in which this disastrous disgrace was arranged and delivered[1]. Against voted 133 Republicans, and 95 Democrats. Not really a significant split along the proverbial aisle there, voting in opposition to the bill. The votes for it did show a much more dominant Democratic color: 140 Democrats joined by 65 Republicans voted in favor.

Missed Point #1: You’re Nekkid

Two things stand out here for me, fueling my particular anger with this epitome of congressional folly. One, the colossal failure of House representatives to not mistake the forest for the trees – again. Now, that might perhaps strike as an odd comparison, that throwback to the much more partisan votes cast back in October 2002 over the Iraq War Resolution, certainly given that Joint Resolution 114 obviously passed quite comfortably, with only 133 House members and 23 Senators voting against it. So, here’s a refresher of what kind of pressure and with which intensity it was brought to bear on members of Congress, also and especially through manipulation of the public at large, using all sorts of imagery, some more dishonest than others, to push in one peculiar direction, no matter the cost of the credibility that’s at stake:

Six months after Almost three months before[2] that infamous presentation by poor Colin Powell, who much later came to deeply and even publicly regret it, Congress gave its seal of preemptive legislative approval. Out of the window had gone a whirlwind of warnings and calls for caution and deeper reflection on the facts, the hard variety, coming from the world all over. Instead, a sweeping sense of rah-rah team-play appeal had taken over, ignoring the risks, the costs, the longer term implications of messing around so actively in the Middle East, the effects on the largest goal of pursuing and eradicating international terrorism, which inherently requires coalition building and very close and coordinated cooperation, etcetera.

No: instead, starkly increased pressure from the nether regions advocated for an abdication of tough minded, determined and highly focused inspection and consideration. Let’s start a war someplace else; after all, history is written by the victors and all that forward projecting, self-exonerating jazz. No boldly stepping out from a blind alley, to defend and explain a more rational but impopular position, no answering the call to a higher political duty to the greater common good. Who disagreed had simply eaten too many French Freedom Fries and was an elitist morans with a brains and had gone to college obtaining an advanced degree with high academic honors, or was a traitor in general otherwise showing a troubling lack of healthy patriotism.

And to make sure we’re not mistaken for some loser indeleckjuwel, let’s wear a flag on our lapel, no: two pins to preemptively eliminate such idea of being an America-hating wuss! Meanwhile, in the wake of that colossal and tragically expensive disaster of that vote, lie the ruins of independent, vigorous congressional oversight. Along with it, rest the remains of the fourth estate; the press that so gloriously serve the golden age of he said, she said “journalism” where any idiotic statement is sanctioned as acceptable, provided there’s a countering (more or less nominally “dissenting”) text printed right next to it, instead of doing all that tedious investigating and reporting work and then serving an informed, balanced and thought-provoking editorial opinion alongside it! Who needs facts, when belief can trump reason, when an appeal to virile, brute force quashes namby pamby thoughtfulness, indeed: when balls bust brains?

The subsequent electoral response was no other than to reward the steadfast (I’ve heard some even coin the term “stubborn”) incumbent presidential candidate in November of 2004 but then, bizarrely, to turn around and chastise the same President with a “thumping” in Congress, only two years later. Of course, there’s also things to consider there, like how the aftermath of Katrina (and Rita) was handled, not to mention the sagging imagery of “success” in Iraq – obviously prior to The Surge. Somehow, I trust that the normally above-average intelligent humans that populate Congress have seen things with a more up close, informed and detailed perspective than the average New York Post reader (or CNN viewer) might.

If that admittedly wild assumption were true, that would also mean that members of Congress that came in elected during (or survived) the 2006 elections must have felt a pressing urgency to avoid future major disasters due to a congressional MIA. And that’s the supposition where the whole theory collapses, considering the arrogance of the 223 House representatives that took off to lalaland today, led by their honorable clown-in-chief, Nancy Pelosi. The problem in that regard, as I see it – with arguably seething unkindness – is that too many representatives were far too much obsessed with the elections this coming November, and too much thinking in defensive terms, and too much addicted to exercising what they undoubtedly hail as leadership-by-focusgroup; of justifying themselves above all, under a tidal wave of angry calls from constituents. Heck, even here in Nevada they gave representatives a massive earful!

And so, they lost their oversight on the forest, with all those befuddling wooden brown things with green stuff on top, standing annoyingly in their way on their journey to insanity. I trust that among their chief preoccupations were: where has the last good speech writer gone to, and why does nobody have a copy of “Managing Major Financial Crises For Congressional Dummies” for occasions like these? It must be some incredibly tough and intense work to do such a fantastically lousy job, earning a whopping 9% approval rating. But let’s give the caesar his share: today, they have fully and honestly earned a downward review.

Missed Point #2: EPIC FAIL

The second thing that makes this panda sad has to do with their job, precisely. And with that doggone bailout plan shot to hell by these petty, myopic creatures who serve, instead of our society as a whole, its underbelly. What we have here is a full-blown, serious financial crisis. The text of that joint statement by McCain and Obama, earlier this week, pulls no punches in telling it like it is. Yet somehow, the notion of a piecemeal solution – as opposed to The Magic Bullet™ – seems too complex to grasp, too contrived to explain, too tough to sell. And so we resort to waving the white flag of surrender, with our seemingly preferred female murder weapon of choice: with a poison pill, this time not inserted into that bill itself, but in a flagrant and deliberate display of disrespect to the in this case all the more necessary partners for its vital success.

The bailout plan was a financial market rescue plan – not an economy bailout plan[3]. I don’t think there’s enough money in the world for such a hypothetical, gargantuan, one-fell-swoop “solution”. Yes, obviously there are significant and numerous differences with the way things were, back in October 1929 (is there perhaps something inherently bad about autumn for Wall Street?) when Black Thursday, Black Monday and (especially) Black Tuesday gave birth to the Great Depression (tragically, much worsened by the Dust Bowl). But if I’d have to pick two key connectors, I’d go for irresponsible speculation and practically absent oversight. I suppose everyone’s heard of the insanity of those days of people borrowing money to speculate on Wall Street – a veritable pyramid scheme waiting to go bust. And those people jumping out of buildings in the fall (sorry…) of 29? I don’t think they were all guilt-tripping souls, gripped by remorse over irresponsibly risky gambling investment behavior… I rather think many of them were people who were as suddenly as unexpectedly facing a massive debt that they simply couldn’t ever repay – not in this lifetime. So they took the short ride down, leaving their loved ones to deal with the aftermath.

Image inserted afterwards, shamelessly stolen from a related post by my friend over at NetoRatón.

Now, perhaps that idea allures, of droves of penitent (and, why not, preferably conscience-burdened) Wall Street jocks following in the footsteps of their illustrious predecessors 79 years ago, but there’s still that stubborn aftermath thing to deal with. I dare suggest that the FBI, the SEC and the Secret Service are more practical (not to say: morally and literally much less messy) enforcing instruments toward accountability. Opening an investigation now leaves the door open to pawn off the political “burden” onto the next President, especially given the high profile of people who’ll undoubtedly end up ensnared in those investigations.

One of those pesky aftermath things, though, is… You. Wherever you do, you have to live at some place, and if you can read this, you probably also have this nasty habit of eating, more or less regularly; an addiction you probably try to entertain with gainful employment, wherever possible. But if the already deeply hurting financial crisis metastasizes, and the vital flow of credits drops to a dribble as a result of panicking financiers (mostly, their depositors) it’s going to be lights out for GDP, leading to a fast downward spiraling crimp. And the problem is that with a presently hardly potent national industrial sector (a condition that preexisted prior to this mess) and a gargantuan debt, not to mention a dazzling trade imbalance, thanks in no small part to outsourcing everything up to our brains (honest: by outsourcing R&D) to a few kind people abroad who gladly oblige (for a modest fee, natch), and when on top of all you add a dollar that’s steadily been losing its prior clout, it’s clear that we’ve been running on fumes already, over the past few years. Just… Consider that the good news. The bad news here is, of course, that you can’t simply rectify all that with any Single Great Plan™, certainly not Within One Single Presidential Term™.

So, back to that bailout. Yes, it’s true that it keeps big financial firms upright. Guess what? If they were to hypothetically disappear, you still need to somehow fulfill their function, without leaving a massive scar behind; even if such a more than colossal, truly catastrophic wipe-out took place[4], you’re in a world of trouble – literally – trying to foster worldwide confidence in our collective ability to this time (no honest, really!) pledge everlasting support for a reliable replacement system. As much as I don’t dislike (ahem) daydreaming about alternative economic systems, I simply don’t see one that works, or better: one that can work as well as a market economy with profit incentives driving the Big Engine™, but also one that is well regulated by a government that honors the principle of intervening “as little as possible, but as much as necessary” to keep things working in the long term and, moreover: to the benefit of We, the People.

So, that’s why I separate accountability in a backward or retroactive sense for those who messed up, from saving the firms they crashed into the gates of Hell. I see no alternative but to intervene, and quickly, to keep the financials on their feet; G*d help us if we don’t. People who want everything, here and now in a neat, single package, have simply seen that famous J.G. Wentworth ad one time too many.

The rest left unaddressed by a financial bailout package, meaning: you and me, the economy, is something that requires no less than the framework of a firm, broadly stroking presidential policy to succeed. Given the additional complication in this mess of presidential and, especially relevant, congressional elections coming in a matter of weeks, that means, for the electorate, this simple plea: please, please, please make a good pick. And pick with infectuous conviction, not in another cliffhanger. A pick of a President capable of taking in broad and deep advice from an array of top-notch (and only for that reason alone, dissenting and arguing) economic thinkers; a President who comes with a team of top-notch budgettary wizards, so as to figure out a way to make all this happen, where every penny counts. One with enough perspective to look back, to the 1932 elections and the winner, FDR: who put a Big Plan™ in motion doing just that. Yes, we need someone who can and who will work hard, side by side with Ben Bernanke, and with the likes of Joe Stiglitz, and Paul Krugman, and Thomas Friedman…

The word you’re now thinking is, indeed, neokeynesian. Because the time has come to ditch fear. Again.

So, I firmly believe we need a plan to keep the financials upright now, and an even bigger one later, with more time to prepare it, and solidify it, talk it through, agree upon (in broad consensus), and implement, by the next President.

Now, I understand full well that there are a lot of things that can be said, in fair and even deserved criticism of the bailout plan that was shot down today. The thing is, there’s no acceptable alternative in today’s result. Not bailing out is not an option, pure and simple. Accountability and oversight were, rightfully, added during the negotiations over the past weekend, as well as a cap on those obscene “golden parachutes” for the miserable failures that turned those firms into one, amorphous and highly toxic disaster area.

And the idea that those earlier “stalwart House Republicans” clung to, namely the idea of having government acting as a guarantee fund (or insurance, if you prefer that term) instead of “buying” the risky portfolios of bad or risky debt, makes good sense; it’s certainly not nonsensical. But then again, if you do buy them, and keep those portfolios going (and keeping defaults down as much as reasonably possible) you may very well end up later – once the big mess sorts itself out and financial markets grow again – with a tidy profit once you release (sell) them onto the market. And no, you can’t just copy-and-paste solutions (if only!) but there’s definitely some solid stuff to think about in the Swedish example, when they faced a big, deep and nasty financial wobble. Especially how they arrived at their solution is at least as interesting as the found solution itself.

So that’s what I just don’t understand, about the current situation: how come members of Congress didn’t race to their constituents, not primarily to “feel their pain” (although evidently, public feedback precisely in times of crisis is an essential ingredient of democracy) but to explain what the available, realistic options are, their pros, their cons… and to vigorously defend them. Even if it makes them less than ravenously popular. In fact, precisely when it makes them much less popular is when they prove their mettle, by arguing and serving the res publica.

Because there’s one thing that a free and sovereign people, all over the world, won’t tolerate: it’s being fed manure. The electorate tends to respond with the same degree of intelligence as it is approached; the fact that politicians here are more political figures acting as if they’re politicians has understandably led to some quite idiotic phenomena – and I’m casting only a cursory glance here in the general direction of 1600 Pennsylvania Avenue in DC. It’s about high time that elected officials took the electorate more seriously, and with it, work on the darned real problems that need darned real solutions, and point out the massive dangers before they become too enormous, instead of feeding it politically expedient fast food cr*p. This country has managed to send men to the moon; somehow, I believe they can handle an occasionally honest and driven politician, too.

Sadly, this Congress has today, instead, delivered one big, massive, stinking pile of

EPIC FAIL.

What Lee Iacocca used to say, still goes: lead, follow, or get out of the way.

This Congress needs a major shake-up to deal with the financial crisis. Tossing out the inept, coward, useless gang that torpedoed a necessary bit of bitter horse medication would be a darned good start.

I seriously hope Cindy Sheehan wins, in November: the odds are rather long for that, and I don’t exactly see her holding the gavel (let alone do a good job as Speaker, which she won’t be) but she’s one heck of an improvement over the current utter idiot who holds the job, and apparently still has the gall to expect payment for her lacking performance. Talk about excessive remuneration that needs some serious curbing!

In closing… I know this is a dreadfully long bit. But I really meant it, up there, a while ago… People who know me well also know that I’m not exactly prone to pulling a spiritual bit into the picture, but…

G*d help us all.

We need it, wherever we are on this planet.

Notas:

1. The New York Times helpfully has published a graph that illustrates the broadly bipartisan rejection of the bill. [↩]
2. Thanks to J. Casey for pointing out my silly blunder there: evidently, Congress passed the IWR before and not after Gen. Powell’s presentation to the UNSC. Obviously, being tired and angry is not conducive to precision… Then again, it’s no excuse either. My bad. [↩]
3. The view that the “financial bailout” was just one, but vital piece of the solutions puzzle was circulating well before the vote. [↩]
4. Andrew Mellon would probably smile kindly upon whoever proffers such an enthusiastic reprise of “Liquidate, liquidate, liquidate!“ [↩]

Etiquetas: Nancy Pelosi, bailout plan, congress, cowardice, economy, financial, market collapse, political corruption, politics

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