Posted inPolitics: National

Screwed 3.0

Now we enter the next phase of the Great Disruption, where political dysfunction meets unsustainability. The Greek debt crisis is helping prepare the way for American panic about the federal deficit and national debt. These two maladies are a cause célèbre for the Tea Party. The supposedly left-wing media are on board. USA Today headline: "Nation's soaring debt calls for painful choices." Tom Friedman of the New York Times: "After 65 years in which politics in the West was, mostly, about giving
things away to voters, it’s now going to be, mostly, about taking things
away. Goodbye Tooth Fairy politics, hello Root Canal politics." Isn't he cute? I can't wait for the idiot David Brooks to weigh in. (He's already written about how "as
government grew, the anti-government right mobilized. This produced the
Tea Party Movement — a characteristically raw but authentically American
revolt led by members of the yeoman enterprising class…As government became more threatening…" Funny, he means the Obama administration, not the Bush wars, shredding of civil liberties and crony capitalism leading to trillions in federal bailouts, i.e., government growing.) You see, we're just like Greece — a profligate nation that needs to tighten its belt, cut government.

The reality, of course, is very different. Whatever his failings, Bill Clinton showed that seemingly intractable red ink could be turned into surpluses. The present deficit and debt is almost entirely a creation of the Bush tax cuts, the Bush wars and the Bush bailout of Wall Street (for which Sen. Obama voted). The fiscal situation was made more severe by the worst recession since the Great Depression. It's as if FDR fought World War II twice as long, cut rather than raised taxes, and did all this in the worst part of the Depression while using federal money for the banksters rather than the people. It's a wonder the deficit is so low as a percentage of GDP. It is not a cause for hysteria.

But, ah, dear reader, it will be used. "You never want to let a serious crisis to go to waste," said White House tough guy Rahm Emanuel, who is letting the real crises of the Great Disruption do just that. The extreme white-right — the idiot David Brooks' "yeoman enterprising class" — and the plutocracy will use the "crisis" of federal spending to their own ends. And if the effectiveness of their party as the minority in Congress is any indication, wait until they take the House this year from a feckless Democratic Party. And then the Senate and White House. Prepare for Screwed 3.0

11
Posted inPolitics: National

Leggy blonde coed hooker foreign debt forces Frannie bailout

I’m late posting this morning on the takeover of Fannie and Freddie because I spent last night and part of today writing for the Seattle Times on the ouster of Washington Mutual’s chief executive. It’s not a far leap from one to the other, because both bags of trouble have their genesis in the collapse of the housing bubble. In the case of Fannie and Freddie, of course, the problem became so serious that it put the entire financial system at risk.

That’s right. Don’t be fooled by Hank Paulson’s "what this means to you" comments about how the federal takeover will make it easier for Americans to buy homes. The Bush Treasury was forced into using taxpayer money to back these two giant corporations to avoid a financial China Syndrome. And India, Japan, Britain, Saudi Arabia, the United Arab Emirates, et al. Here’s the chilling line buried in Gretchen Morgenson’s Sunday New York Times story:

The proposal to place both mortgage giants, which own or back $5.3
trillion in mortgages, into a government-run conservatorship also grew
out of deep concern among foreign investors that the companies’ debt
might not be repaid. Falling home prices, which are expected to lead to
more defaults among the mortgages held or guaranteed by Fannie and
Freddie, contributed to the urgency, regulators said.

Toes curled yet? This is what it means to be the world’s largest debtor nation. As the duhs and ignos rush to coronate McCain and Palin, there it little understanding of this predicament.

2