Why it ain’t over
From CONSTRUCTION PULSE, by John McManus: Here’s what to know about September 29, 2008, on Capitol Hill. “There is no extra courage to go around,” Rep. Jim Cooper (D., Tenn.) told the Wall Street Journal after Monday’s stunning 228-205 vote against the $700 billion plan to stabilize U.S. financial markets. A one-point-two-trillion-dollar one-day panic says there’s more work to be done on all fronts, and like as not, our elected representatives will neither further ennoble nor endear themselves to many of us as they try to get their minds around the task at hand.Lots of American people are angry, and they’re letting it be known. American homeowners are angry because deflation continues to rob many them of the un-hard-earned paper profits they’d used to live above their means for more than a decade, and the home price correction has made many of us who bought in the past few years “the greater fools” for thinking the music wouldn’t stop at least until we had a wad of cash in hand. Non-homeowners are angry because their households will suffer the burden of a society that mistakenly over-prioritized and over-priced homeownership to fund its agenda for the past decade or more.
Still, the rescue bill will come back up again because it must. 435 politicos, who never stop campaigning, must continue to wrangle and tweak, lead and concede, and ultimately they need to use whatever suasive powers they possess to talk clearly and candidly to the one-third of their constituencies who “don’t know” whether they’re for or against the Federal government’s massive plan to stabilize the financial system. “Don’t knows” may justifiably resent the folly of financial companies who never learn the lessons that borrowing short and lending long harshly teach.
But “don’t knows” may also be able to get their minds around the surreal-but-real potential of soup kitchens and bread lines. [In light of today's market bounce, remember that 1929 and 1930 saw several big market rallies even as things headed to decades-long lows].
Authors of the next go-round of language for the rescue package have to do three things by they time they bring language for the legislation back to the House of Representatives for consideration after the Rosh Hashana holiday.
One, the authors have to get up in the balcony for a better view of the drama that’s unfolding. U.S. Treasury Secretary Henry Paulson has been so frank and earnest about his concerns for “the financial system,” but evidently he hasn’t a clue about Retail Politics 101. Bank failures only tend to strengthen a lot of smart people’s convictions that dastardly deeds and toxicity confine themselves to the financial sector. But we rank-and-filers’ indignation about the thievery of bullet-proof billionaires must be set aside for a moment while this thought gets a chance to enter our minds: Layoffs.
Do we really need a Ford Motor Co. or a McDonald’s to file BK before we believe this matter is a buckling of the economic ground beneath Main Street as much as it is a toppling of the citadels of Wall Street? Do we need lines of shivering people wrapped around the block on the dole?
- The bill’s rejection was the product of a failure of political leadership in Washington, as the principal players appeared not to comprehend or address in a convincing way an intense strain of voter opposition, The New York Times wrote.
This notion of skyrocketing unemployment and mass distress remains in the black box of the unimaginable. But for how long if we don’t compell our leaders to crack the code of failing confidence and freezing credit?
When next the Treasury Secretary or the President or the leaders of the Senate or House majority or minority parties in Congress open their mouths about this plan, they’ll need to have reworked the measure and its ambitions enough to be able to assert honestly that they address American business’s woes only insofar as they plan to use Federal power to try to ward off a worsening crisis for all Americans.
Two, the authors of the plan–whether they like it or not–are married to the sliding scale of accountability on the part of our elected lawmakers. Crisis or no crisis, their foremost interest is re-election. Mounting urgency, strong medicine, fairly estimable economic strategists and tacticians, and a virtual declaration of war on the economic crisis by the nation’s chief executive proved only that electoral politics trump sanity, and we should not be surprised by that.
Being right won’t win the day. The dilemma now is whether to try to swing no-voting Republicans across the aisle via Democratic concessions, or the other way around. In case we need reminders, we’re a polarized bunch today, and it seems the only shared trait in the halls of Congress is a desire to grandstand ad nauseum. At any rate, our current President’s role as a domestic lame duck has been dramatically confirmed, and it’s going to take the emergence of true leadership, political fortitude, and courage to get backing for the next go-round here. Partisans take heed, being right for all the wrong reasons may be hazardous to one’s position in current polls, but it’s the way to put America first in this case.
Three, stop focusing only on assets, and restore people’s and businesses’ trust in getting access to their money. When people enjoy safety, they take it for granted. When they begin to sense danger, they covet safety. Suspend FDIC limits, or raise them to $1 million. Yes, there’s a price to pay, but it’s probably less than the $1.2 trillion in value that vanished from the stock market yesterday.
Comments
Leave a Reply