Save Us Chickens
Well, I have to state it even though it pains me to do so. After all the promise of the new Obama administration, and the hope and trust that the president earned before and after his inaugural, the wishful wooing of recalcitrant Republicans and the Pelosi and Reid gangs’ bungling of their respective economy recovery plans with their easy to pick-on lard, has resulted in my losing patience. And after that awful presentation by Timothy Greithner on his so-called new bank bailout program (his stammering drove me crazy), I more than ever believe we may have let the proverbial foxes into the equally proverbial hen house.
I mean these guys, Greithner, Rubin, Summers and the rest of them, were all “there” when Wall Street and the banks bungled their businesses and the economy. And that so-called plan Greithner boringly announced seemed like nothing more than another handout-sans-demands to those same banks. Based on what he said (there were few details), those our-money-grabbing-banks would still have no mandates to start loaning the dough and greasing the economy. Nor would the government that loaned the funds (us) have any equity in those banks resulting from those loans. In short, we would be bailing out their stockholders and executives without any direct benefits for one of the key causes of the financial disaster, mortgage-paying homeowners, or for us who are footing the bill. Let’s hope Obama sticks with the promises in his speech about not giving handouts to these guys.
Look, if we’re going to “save” those’ incompetent banking boobs, why not also extend a life preserver to deserving, drowning mortgagees. I personally feel that putting money into the latters’ hands will not only help stabilize home prices – a major cause of the banks’ problems – but will also help those banks because the money will ultimately flow into their coffers. I confess that I took only Economics 101 and 102, and do not really comprehend the issues in academic detail, but the views of Nobel prize winning economist, Paul Krugman can sound convincing. A strong advocate of Keynsian stimulus spending, he contends that the current recovery plans are too centrist-focused, too small and mis-targeted. Krugman and other similar thinking economists believe that what is required to jumpstart the economy is a more massive bill aimed at short and long term projects that will result in accelerated hiring and people spending again. They do not believe that increased buying by the public results from tax reductions, and point to last year’s handout to justify that view.
On the other hand, there are more conservative, Adam Smith-leaning views that state that we should cease subsidizing the irresponsible banks and financial geniuses that got us here, and let them fail as we let home prices fall to their real values. Who has it right? While again, I don’t have the academic background to be more adamant, I’m inclined to of finding a solution for the benefit of the country and not just trying to punish these people.
I agree that it is early in the game, and that we should not expect miracles from the new administration. But, again, what concerns and alerts me that this bunch may not be what we surmised is the handling of the recovery plan by both houses and the naiveté of the president to believe he was going to persuade the other side to buy into his views. With all of Obama’s good and decent intentions it is not going to happen in the time frame he wishes, if at all.
The Founders designed a contentious kind of government. While it has made us into the great society we are, there will always be disagreements on every proposal put up for discussion. Here’s hoping that whatever they finally come up with works. But if it doesn’t, its back to the drawing board, back to continued contention and back to another try. We are a resurgent society, and will work ourselves out of this mess. So stay in there. The cavalry is coming (maybe)!
Arnie Silverman
Laguna Niguel
