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By BRIAN A. HOWEY
INDIANAPOLIS - On Oct. 30, 1929, people didn’t wake up and start talking about the “Great Depression.” People had no idea on that date and for months afterward the magnitude of what had happened on Wall Street.
This week, Americans began to learn the depth of the disaster that will become known as the Bush-Cheney oil presidency. The nation’s economy is in shambles; credit is drying up. On Wednesday, President Bush addressed the nation, saying, “Without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold.”
It was 180 degrees away from President Franklin Delano Roosevelt who told the nation that “the only thing we have to fear is fear itself.” Of course, those words came at the depth of the Great Depression. As I listened to Bush, I kept thinking, “Why should I believe this guy?” I can still remember his 2002 pronouncements on the mortal dangers Iraq’s weapons of mass destruction to us here in the American homeland.
This troubling scenario really sank in on Tuesday, when NBC Nightly News themed that day’s broadcast, “fear and loathing,” a theme made famous by gonzo journalist Hunter S. Thompson, who after an illustrious career of cunning, savage insight and Falstaffian excess, committed suicide. America this week seemed to be following his steps.
With the Challenger explosion, the Clinton impeachment and Sept. 11, Americans could at least fathom the outcomes. With the Meltdown of ‘08, I couldn’t find anybody who really had an understanding of how this all might end up. It’s as if we’re heading down a dark rabbit hole and the best case scenario is Wonderland.
Tuesday was the cathartic day. The Dow was down 161 points, on top of Monday’s 500 point disaster. There was the Senate Banking Committee hearing, where the guys who watched over this meltdown were now proposing the solution. Federal Reserve Chairman Ben Bernanke ominously told us that if the $700 billion bailout didn’t pass, “Jobs will be lost, unemployment will rise, more houses will be foreclosed. GDP will contract.”
On the other hand, U.S. Rep. Mike Pence was rallying House Republicans to oppose the deal, saying, “This is going way too fast. The American people don’t want Congress to make haste with the financial recovery legislation; they want us to make sense.” The New York Times reported that when Pence met with Hoosier constituents this past weekend, they were “flabbergasted” at the size of the bailout. In capitalism, people should be allowed to fail, Pence reasons. But this was capitalism run amok. U.S. Rep. Mark Souder evolved over the week, noting that essential lines of credit had dried up in Northeastern Indiana, a region already hit hard by layoffs in the RV and auto industry. Souder also called for a bailout of the Big Three automakers, which, over the past decade produced bigger, fuel inefficient vehicles.
Senators were balking out of fear. U.S. Sen. Evan Bayh, who sits on the Senate Banking Committee, talked of a “systemic failure” and said, “We have to act to prevent a calamity.”
How could this happen? “There were problems up and down the system,” Bayh explained almost in a stream of consciousness: “Houses being appraised above market values. Loans being given to people who weren’t credit worthy; incentives for loan officers to just get them out the door. How did the rating agencies rate this AAA - good as gold - instead they were junk? They were packaged by banks and investment houses to take on so much debt they were at risk of going under. Problems in accounting systems. Off balance sheet items they didn’t have to reveal to the public or the market place.”
Bayh explained, “There is no good alternative,” and added, “We are only choosing the best of bad alternatives. My deepest concern is there is literally not one line - not one line - that will do anything to keep this from happening again.”
NBC then took it to Main Street. Fear. Anxiety. All expressed by middle class people who have taken it on the chin and who are appalled that we’re about to spend $700 billion to bail out the fat cats. There was a family guy in Detroit who was about to lose his neat little home. That story ended with him and his family sitting on their tidy porch.
There was the Midwestern guy who lost his house and was working 60 hours a week laying brick to keep food on the table. He’s living in a fleabag motel on the edge of town.
Back to the Senate: Senators were railing at CEO “fat cats” for getting tens of millions of dollars in Golden Parachutes while “driving their companies in the ground.” Treasury Secretary Paulsen said he would “welcome” a little oversight. The next story was about gas lines in Nashville, Tenn. Demand is outpacing supply. This is thanks to Ike, the hurricane that destroyed another American city in a story that has slipped off the front pages.
Now, turn to the campaign trail ‘08. Sen.Joe Biden, made another gaffe, talking about how President Roosevelt addressed the nation on “television” right after the Oct. 29, 1929, stock market crash.
A day later, John McCain, who only a week before told us that the nation’s economy was “fundamentally strong,” was suspending his presidential campaign, attempting to call off Friday’s first presidential debate due to the crisis. Series of polls showed his campaign tanking on the issue of the economy. Barack Obama, who sought a joint statement with McCain, appeared blindsided and insisted Friday’s debate go on, saying that presidents “need to deal with more than one issue at a time.”
This is America, late September 2008.
To tell you the truth, I don’t know what to believe, or who to believe. I can’t believe President Bush. I’m not sure about writing a $700 billion taxpayer check to the very people who allowed this mess to happen. There is no scale in which to understand the magnitude of what has happened. The vice presidential candidates are either talking too much or not at all. McCain is acting erratic. Obama appears understated, which, when you come to think of it was the way FDR acted. NBC’s Mad Money guy Jim Kramer says the bailout is about “keeping people in their homes.” If the plan doesn’t pass, we face a Depression greater than the Great Depression.
Through all the smoke, all the mirrors, the Meltdown of ‘08 is about confidence where the demand is obviously out-pacing the supply.
It all reminded me of a William S. Gilbert verse: “Things are seldom what they seem, skim milk masquerades as cream.”
Tags: Barack Obama, Evan Bayh, Hunter S. Thompson, Joe Biden, John McCain, Sarah Palin
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This entry was written by and posted on September 25, 2008 at 11:55 am and filed under HPI Weekly. Bookmark the permalink. Follow any comments here with the RSS feed for this post.
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