Current Events

Could I think of a more boring title? Not likely.

But the only thing I could thing of other than that was: "Dude, seriously? WTF!?"

Because, seriously, what the fuck?

I'm talking, of course, about the economy. I'm ever-so-slowly beginning to understand what happened, why it happened and what the options are to fix it. It's a complicated fucking mess.

It would be like if 800,000 of the richest people in the world broke into, um, a mythical museum that had a 60 trillion dollar piece of crystal glassware or whatever. And they pass it around and toss it up and down and generally make gobs of money off this expensive crystal thing and then the damn thing, being tossed around like it was, it falls to the ground and shatters. And these 800,000 rich guys all look around at each other like: Can we get someone to clean this shit up?

(Cough, cough, let's get a black guy to do it....cough cough the crystal was the "economy" in my metaphor...cough cough cough, man I have a cold).

OK I'm not sure anyone here wants me to give my explanation of what actually happened to fuck everything up so I'll just skip to how to fix it.

But before that, I'll say this: I wish Obama had come to power with better circumstances, and I'm glad it's him in there and not McCain or Bush (or Romney or Palin or Hillary or Bill Richardson). But I'm still not all that happy with how Obama is handling things.

He seems to be (in cooperation with Timothy Geithner, who looks like a crook, smells like a crook, and cheats on his taxes like a crook....and seriously? Go by Tim, you're old now) desperate to save capitalism from its excesses (a la FDR, who was not a "socialist" despite the far-right's insistence that he was. He was as capitalist as the rest of 'em).

My whole thing is: Is this system worth saving? There is no serious debate on television about this. But is the global system that led to such soaring wealth and success for so many not the same system that led to where we are now? Is it an inconsiderate question to ask if this is not the inevitable result of capitalism? Is it not destined to end in chaos and fear and depression?

Two things:
1) Even before this collapse, in the boom times, were things even really that good? No. They weren't. Many were still poor. Many were still dying needlessly. Gas and food were still too expensive. AIDS and malaria still ravaged Africa. Extremism and violence still raged across the globe. The difference between now and then? Then, a few of the elite were making gobs and gobs of money.
2) In light of that, what's the goal here? To get back to that? Obama C.O.S. Rahm Emanuel is reportedly fond of saying, "Don't ever waste a crisis" or something to that effect. I'll admit some crises are capable of being used to push the country to greater heights (9/11 was one, and it was largely wasted). But really, what the crisis we have here exposed is this: All those supposedly smart guys who ran around making so much money in our system weren't "smart" at all, and were just playing around in an elite system that aimed to make the rich richer and the poor poorer. And then they went and had too much of a good time and fucked it up for everyone on the planet. Are we really trying to go back to that?

I'd rather not. But I'm not the HNIC, am I?

So how to fix it? Geithner, whom I don't trust, and who is a crook, still is deluded to think that some sort of public-private bullshit can be worked out to save the banks, which are filled with "toxic assets." As a person who uses words frequently, I'm astonished at this pairing of "toxic" and "assets." It's such a wonky phrase.

Anyway what it means is that, OK, banks have all this money they loaned out, and now they don't expect to get back because they gave it to people who couldn't afford it in good times, and now the good times are gone. But they might be paid back, eventually, so they are still "assets" -- they are just so worthless right now that the losses over these assets are larger than the amount of cash the bank has (making the bank "insolvent" or "fucked" in normalspeak).

So banks still have money, but none of them want to loan any more money out. They want high cash reserves to show investors they can handle the losses over these toxic assets. (Investors are still bailing).

Holy shit this is complicated.

So all these assets, no one knows what they are worth. If you just have the banks sell these assets off on their own, and let the market price them, the banks probably will lose too much money, and they'll fail. So the banks won't sell 'em. But while they aren't selling them, they aren't lending, and the economy needs lending to grow. So, we're stuck, basically.

That's where the government could come in, buy the toxic assets off the banks (using taxpayer money, or a combined public-private thing) and then wait until maybe those fuckers are worth something in five years and sell them then. Then the banks, cleared of these toxic assets, would still probably need some more money to get to lending again.

Good god I hope someone is still reading.

A problem: what do these assets cost, or, how much should one pay for them? Capitalists like Geithner, the crook, want to let the market decide (private pricing). While the market is crazy, it's not an idiot. If a bunch of public money is going to be thrown at the problem, they may jack up the prices, which would fuck the gov't (and the taxpayer) over royally. And this whole public-private thing is short on details about how it would actually work.

At least, that's what I think is going on.

So now, the word creeping its way into the national conversation is nationalization, which even "high priest of laissez-faire capitalism" Alan Greenspan is now supporting. (Along with, it seems, SC Sen. Lindsey Graham).

Here it wouldn't matter, presumably, what these assets are worth. With the banks under the control of the government (rather than just owing the gov't a shit-ton of money), the gov't could just remove the assets at will and put them into a "bad bank." Then they could fix up the banks and eventually give them back over to private investors (But when? After how long? What if the economy never returns to the levels the gov't wants? It's a touchy issue.) Add to this: it worked in Sweden. But Sweden isn't America. There are many, many more banks.

Read the Washington Post for some info about it, if I'm being unclear.

But James Surowiecki says this about nationalization. Even if you "stress test" banks and only take over the "insolvent" ones, investors are still going to bail on all banks, which means the banks that were tested to be "good" will suddenly be cash-strapped, and will need more and more money. Which is why all that money we poured in to the banks doesn't seem to have done anything. Because the stock prices have tanked, the banks are just vacuuming up money and nothing positive is happening.

So the gov't would have to nationalize all banks, from the kinda-OK ones to the horrible ones, from Bank of America to BB&T to every last shitty bank around this country. Huge deal. Big undertaking. And there is no guarantee it will work. In fact, it may make things worse before it makes it better. And when has a politician had the will to do what's right, even if it takes time? (See Iraq, Bush? Kidding, kidding).

OK so that's that. No conclusions.

My whole hope is this: Fix it. Get it right. Make it better. And dear God, if you could screw over those rich fuckers who did this in the process, then by all means do it. That's why crooks like Chuck Schumer, who is a sleazy slimeball of a man, oppose nationalization: it would screw over their rich Wall Street friends who've made a killing playing this dangerous game and who've bankrolled political careers of people like fucking Chuck Schumer.*

I was going to do some quick hits, but I'll just make another post. I doubt anyone made it this far. Hey, if you did, leave a comment. And answer me this: Is capitalism worth saving?


*My disappointment in Obama largely results from the fact that he is not immune to the charms of sleazy fucks like Geithner and Schumer, and may in fact be one himself, though I'm holding out all hope that he's not.