A Few Simple Questions

As many old jokes begin, there's good news and there's bad news.

The good news is that Green Canary's dating situation appears to have dramatically improved, and I'm very happy for her and for Mr Mystery. She's my favorite virtual soap opera, and I wish her well.

The bad news is that - with all the bipartisan agreement on how dreadful our economic situation has become - CNN can run a headline that reads, "Bailout Talks Implode, Leaving Economy's Fate Unresolved." The first line of that story reads, "...high-stakes negotiations over the proposed $700 billion bailout of the nation's financial system dissolved into bickering, begging and a roiling battle between parties Thursday night."

I trust you are as shocked as I am.

I have often admitted in this space that I'm no mental giant when it comes to matters of economics. I can't even tell the difference between a "collateralized debt obligation" and a "credit default swap." I thought the Lehman Brothers lost the battle of the bands to the Jonas Brothers. I thought banks were where you went to deposit your money so you could get it back again later when you needed it. I thought insurance companies were supposed to invest your premiums and make lots of money so that they could find creative ways to deny your claims later. I thought financial institutions were bedrock structures of granite and steel bars and sober men in dark suits behind huge, polished oak desks who kept the financial heart of the nation beating.

Well, that's what I get for thinking. Unfortunately, I can't stop thinking...

In an interview quoted this morning in the CNN story linked above, presidential candidate Barack Obama said that there "...has to be a sense of urgency on the part of everybody. ... We've got to move rapidly."

Hmmm....if we really need to move that rapidly, Mike has a good plan this morning.

This leads me to a few simple questions for those who are supposedly trying to resolve the financial meltdown:

1. Why, since this mess has taken years to develop into the gravest fiscal crisis since the Great Depression (or, at least, since three days before my last payday), must it be solved in a matter of days? Go back and read what I wrote yesterday's post about paying attention to the man behind the curtain. That's what's happening. Nobody wants you to know the truth of how big the mess is, how much it will cost you, and how complicit the people we trusted are in its development.

2. (Trick Question) Where is the $700 billion to pay for the bailout (or, to use the more charitable term, "economic rescue plan") coming from? We all know the answer to that...it's coming from increased taxes paid by you and I, our children, our grandchildren, and their children. No one will tell you that, and they'll try to hide it in obscure economic terms, but you know it's true.

3. (Another Trick Question) Who is responsible for this mess? The short answer is "everyone." Much of the blame goes to the armies of MBAs who dreamed up all the exotic ways to turn debts into lucrative moneymaking schemes. A lot of it goes to those who were responsible for overseeing the economy and making sure this didn't happen, but were asleep at the switch. A contributing factor is the cost of a needless war that's being paid for off the books by emergency authorizations instead of properly-scrutinized and debated budget items. But the real answer is that much of the responsibility comes back to well-intentioned but stupid Congressional action to make home ownership possible for everyone...even those who couldn't afford it. I'll talk more about this in another post.

4. (The Third Trick Question) Who has acknowledged the least amount of blame for the mess? Don't everybody speak at once, now.

5. (Last Trick Question) How many suits will go to jail as a result of destroying the national economy? If you answered anything other than "none," you don't know much about DC politics.

And this isn't really another question, but an observation...you might be interested in this article which appeared below the fold of the front page of yesterday's Washington Post: U.S. Appeals Abroad Fall Flat as Leaders See No Crisis at Home. Yes, the nations of the world who are the first to look to the United States to save their bacon in times of dire crisis are blowing us off. I don't believe in isolationism, but I understand its appeal. Remember this the next time another "ally" or "friend" needs help and comes to Uncle Sam to open his checkbook.

And so I continue to shake my head and enjoy the good news that comes from fewer and fewer places...Green Canary's love life, Zipcode's vacation, Aaron's chance to drive an "excavator," and the new season of Dancing with the Stars.

Have a good day. Hang in there. More thoughts coming.

Bilbo