Sunday, September 21, 2008

Sometimes More Than You Want to Know

I now know more about the financial structures informing the economic web of our society than I have ever known before, and all this prompted by a Friday morning conversation between guest commentator on MSNBC's Hardball, Mike Barnicle, and Chairman of the U.S. Senate Banking Committee, Christopher Dodd.

The five-minute interview rocked my world as Sen. Dodd conveyed the gravity of the nearly catastrophic moment facing the nation, a moment conservatively expected to deliver an immediate 1.5 trillion dollar debt to American taxpayers.

Translated, that 1.5 trillion dollars comes to roughly $36,000 for every man, woman, and child in this country or nearly 2.5 times the cost of the entire Iraqi war leveled on the shoulders of American workers.

I've shared the highlights of that interview with family members and now record them here so as not to forget. With the bi-partisan act of congress apt to pass in the first days of the coming week, the U.S. national debt will rise to $11.5 trillion and more than $700 billion of "bad paper," loans in default, will be wiped from the records of major banking houses and taken up as the new property of the federal government - you and me.

They say we had no choice: it was this disastrous move or global economic catastrophe, a financial tsunami that would leave no one untouched and throw the world into depression. I exhale again just now, deeply, and know that I am willing to take up hope only in the anticipation of an Obama administration.

The conversation between Mike Barnicle and Sen. Christopher Dodd followed a late-night, Thursday night meeting between the leaders of the House and Senate and members of the president's economic advisory committee: Ben Bernanke, Chairman of the Federal Reserve; Chris Cox, Chairman of the Securities and Exchange Commission; and Henry Paulson, Secretary of the Treasury. Notably, at such a time as this, President Bush was not in attendance, explaining that he did not want to participate in a meeting where the outcome could have such significant ramifications for the impending national election.

My notes from the interview follow:

Mike: Senator, where's the justice in the impending bailout?

Dodd: There isn't any, and I'm angry about it. Someone once described the situation in a brief sentence, "We've reached a point where we are privatizing wealth and socializing debt," and that's where we are now.

Mike: What did, if anything, Secretary Paulson and Chairman Bernanke say to you that scared you, if they did scare you? What did they say?

Dodd: They said, "Look, we're in a moment here - not a matter of weeks away or months away or years away - we're in a matter of hours away or days away from the largest collapse of the financial markets in the history of this country, and the effect would be a global effect." And this was a very sobering moment. I can't recall another moment as sobering as that one, and immediately thereafter was this 5 to 10 seconds where all the oxygen went out of the room - it took the breath away of everyone in that room.

What they describe happening would make whatever the cost of this program pale by comparison, so I'm not sure that at the end of the day we have any choice, as angry as we may be about how we got here, and I have some strong views about why we're here. ... This is literally a meltdown of the entire financial system.
Financial analysts who agree with Senator Dodd's assessment yet disagree with the proposed solution suggest the difficulty with the bailout lies in "the detachment between risk and the risk-taker, which is the fundamental principle keeping capitalism as a functioning system. ... If there's no potential accountability and realization of your own activities, people will continue to take undue risks."

The economic crisis due to be inherited by the next administration dwarfs any challenge yet faced in American history at the same time that the current solution, as necessary as it apparently is, threatens to detach the American electorate from its realization of the undue risk and subsequent overwhelming loss suffered by electing a Republican administration and George Bush to lead us into this mess. Without this realization, if the expert analysts can be trusted, American citizens become willing to make the same mistakes again.

Be sure of this: We will not survive as a nation with four more years of Republican leadership - this before you consider the frightful thought that the impending pressures could easily leave Gov. Palin in charge of the nuclear codes. Resist the impulse to vote single issues, and give your heart again to the call for a unified nation.

Vote hope.

Vote Obama.

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