I’m far from an expert on economics. Nor can I claim a complete understanding of the government’s role in our financial system or the related politics. But if a degree in Political Science has given me anything, it’s my expertise in blaming. I have also become an excellent consumer of TV and internet news, which essentially gives me the knowhow of a thousand talking heads and blowhards.
Here’s what my skills have allowed me to understand about today: We’re heading for a great depression, and, everyone’s to blame. Citizens across this country have no idea what is going on and have, as usual, very strong opinions about it.
Granted, I couldn’t tell you what the “bailout” means completely or that I strongly support or oppose it. But here’s what I gather is happening.
For the last several years, the housing market was inflated and banks were selling loans to people who could not keep up with their payments. Eventually too many Americans defaulted on their loans and lost their homes and the banks which doled out the money could no longer withstand the losses sustained.Or something like that.
Banks, of course, make money off lending with interest, but if they can’t even recoup the large amounts of money they lent to large amounts of people, they can’t perform their daily operations and thus have trouble staying afloat. When too many banks have this problem and start failing, the whole financial sector can no longer sustain itself.
Banks not only support nearly all Americans, but also small businesses and major corporations. Their failures essentially impact everyone. So the government was forced to step in and buy their bad loans and troubled securities in order to prevent further financial failures and a collapse of our market. They did this on a bank-by-bank basis for the last few months, but now it’s becoming increasingly clear that this will not suffice and that a substantial structured program is required for all the banks – and stat – to prevent a serious recession.
Thus the $700 billion bailout plan came about which would work to buy up all that bad debt from the banks. It wouldn’t be free money to the finance industry, but more like a turning over of a lot of their business to the government - which can afford to wait around for things to get back on track. Theoretically, should things get better, the government’s investment could turn profitable, and the money could be returned.
But many worry that should this plan fail, it would be the biggest government program disaster ever. Oversight and guarantees are needed, but may not be feasible. Liberal critics don’t like the idea that the government is saving massive corporations because they’re rescuing the rich, while conservatives similarly think it’s not the government’s job to interfere. After working to revise the plan over the weekend, the bill went to vote in the House today. After speculation it would narrowly pass, it was a rejected with a vote of 205 yeas, 228 nays. Upon this news, the DJIA dropped 777 points, the largest one day point drop in history.
With this framework we can gather some very compelling blame arguments. I’ve tried to compile most of them. Let’s start with the most recent.
House Republicans:
The Republicans voted for the bill 65-133. They were supposed to deliver an additional 12 votes which would have been one vote shy of having the bill pass. Although many of the Republicans, like the American people, opposed the plan on an ideological basis, everyone who wanted the plan to pass is blaming the Congressional Republicans because they claim they were too petty to move beyond partisan politics to get shit done.
House Democrats:
While blaming the Republicans seems legitimate, the plan which was pushed largely by the Democrats, was voted 140-95 by them. The Democrats could have easily voted together and passed the bill themselves, but like the Republicans, they have to answer to their constituents. And like the Republicans, many Democrats don’t like the idea that major corporations would be saved by the government.
Nancy Pelosi:
The Republicans blame Pelosi for giving a speech to Congress before the vote essentially blaming the whole financial crises on the failed policies of President Bush and the Republican administration. They argue this introduced unnecessary partisanship into an issue which has been hailed as a bi-partisan solution. This supposedly turned off Republicans who did not need to vote for what seemed to be a “Democrat” bill.
George Bush:
It was Bush and his years of deregulation and tolerance of rampant corruption that caused this problem in the first place, right? It’s all that cowboy capitalism to blame! Yee-huh?
The plan itself:
The original plan was imperfect and panned as flawed. This past weekend, they worked to improve it but fundamental issues remained. It was marketed to the public as a “bailout” which was interpreted to mean that a bunch of rich wall street tycoons got greedy and fucked up and now the government was gonna come and rescue their ass, erstwhile the government wouldn’t help your average hard working American when they defaulted on their loan. This did not resonate well with citizens. Those weary of large government saw the $700 billion bailout as a giant socialist program with no guarantees of return or oversight. Lots of people of all ideologies basically were just not comfortable with the idea of the plan and don’t feel the current crises justified it.
Henry Paulson and Ben Bernanke
Whatever, they came up with the plan, its gotta be their fault somehow.
John McCain:
McCain last week said “the fundamentals of our economy are strong,” then promptly realized we were in a lot deeper shit than he though. Then he “suspended his campaign” to go to Congress to try to get shit passed. Obama blamed McCain for not being able to do enough to rally Republicans, and this is why it failed today.
Barack Obama:
McCain says that had Obama lobbied for the plan, the Democrats could have wholly voted for the bill and it would have passed. McCain went to DC last week when only 4 congressmen supported the bill, and was able to build a large delegation of support among the Republicans, but clearly not enough. He accused Obama of “phoning it in” when real leadership was needed among the Democrats.
Wall Street fatcats:
The greed and corruption of the Wall Street culture was the ultimate fuel for the meltdown. Now they’re getting their golden parachutes and other catchphrases.
The banks:
The banks were the vehicle for the greed. Too many loans were approved when restraint should have been the MO.
So everyone has a hand in the blame, and everyone has had a chance to blame others. So I’m gonna give it a shot.
Absent from the finger pointing on the news network, in the papers, across blogs, and in general conversation was who I feel is the root of this whole problem: The American people.
As a British expat, I often find it really easy to blame my fellow Americans and here is no exception. Everyone is worthy of blame except the poor, innocent people, because it’s too mean to say that those who fucked up and lost their home are at fault for this nationwide economic crisis. But they are. If it weren’t for them this wouldn’t have ever happened.
Sure, the banks should have never sold them the loans and their now getting their comeuppance. But it was ultimately the people who decided they would buy homes they couldn’t afford, signed the lease they didn’t understand, failed to make their payments and lost their house. They just were lucky they fucked up at the same time as a bunch of other idiots. Now they can claim they were duped and petition the government to help them keep their house and save their credit. Because there are so many, politicians are eager to take up their noble cause and save them from their retardation. They will point the blame at Wall Street and let the banks crumble.
But it will be these same Americans which will suffer should the economy completely tank. The fatcats and CEOs may pay a heavy price, but these people own their cars and homes and have savings. They can afford to weather the storm. “Lettings them fail,” as many Americans have said they wish to see, means they’re asking to shoulder the heaviest burdens.
But everything’s gonna be fine, don’t worry about it. Gobble a dick.
