In the fall of 2008, the Treasurer of the United States, Henry Paulson, convinced the President and the Congress to bail out the financial industry so that the whole damn system of passing money and electrons around would not fall apart.
So Mr. Bush, with legislative help from the Reps and the Senators, injected seven or eight hundred billion of public money into the big banks and the big crap-shooting insurer that backed up those banks, along with the two huge quasi-public mortgage underwriters. At least that’s the way this taxpayer remembers it. Help me out here if my facts are a little amiss.
At the time, those powers that be had convinced us, in the frenzied imminent panic of falling markets and a deflating housing industry, that the entire structure of the way we do business in America and even beyond America would fall apart at the seams if we didn’t meet Mr. Paulson’s recommendations.
Of course we’ll never know if that universal implosion of American business and international commerce would have happened or not. The banks got their money, and we are still in a big mess, although not a catastrophic one as big as it might have otherwise been haha. We’ll never know. Instead of the sky falling on us with incalculable damage, we have been able to creep through a couple of lean years in which the ever-present spectre hound of the double-dip has been constantly at our heels, baying for blood or possibly just for red ink, which looks like blood. These days, who knows the difference between any real thing and its hyped-up digitized alter-ego.
Now we’ve come full circle, and have got the same situation over again, except this time its not Hank having fits, but the chicken-littles who warn us of that debt ceiling bogey beast that will devour our already-suspect financial stability and digest it, and then egest our fiscal credibility with overly-copious liquidity in turds not easily disposed of.
A little greece carefully applied will move things along nicely.
Meanwhile, the ratings agencies, the Moody, S&P and the Fitch, are making their obligatory noises of warning, walking their own wire of credibility while keeping fingers in the air to see which way the wind will blow.
Where were those rating agencies in 2008? What were they doing when they should have been sounding the alarms about derivatives and CDS and MBS and CDOs? Same as what they’re doing now–waiting to see which way the wind will blow to tip or not tip over our unwieldy bowl of cards, 2011 version.
So now, if those stubborn, ole fashion Repubs in Congress relent and allow the Dems and themselves to keep flushing paper and electronic dollars while running both the deficit and the debt ceiling into deepwater default–what will happen then, huh?
We’ll never know. When they’ve made their deal and then the Fed and Treasury have a new batch of paper and electrons to swish around in the bowl of toil, we’ll never know what torrent of troublesome irresponsibility has have been flushed down into that great poseidon-adventure pipeline that dumps its dootee out who knows where, the ocean or somewhere, probably some unstoppable severed pipline a hundred miles off the gulf coast. We’ll never know. But at least we’ll still have money to play with, just like in 2008, and we can stay in the game with the blessings of the bondholders. Flush on!