Thursday, December 25, 2008

Christmas Ruminations 2008

I don't know whether the continuing economic collapse should be called the Great Despair, the Great Desperation, Great Depression 2.0 [that's Paul Krugman], the Panic of '08, or the Great Plunder. The last fits best to my mind.

It appears to me that the $700-billion bailout of financial institutions launched during the heat of the 2008 presidential campaign has become the next great bubble, indeed, the greatest bubble of all, as banks collect tens of billions of dollars without any requirement that they account for what they do with it. They appear to be hoarding it, using it to shore up their balance sheets and stock prices, to pay dividends and, I'll wager, end of year bonuses. At periodic intervals, they go back to the Treasury for more, and the Treasury happily dispenses.

Now the Treasury has certified the General Motors credit arm as a bank, thereby making it eligible for bailout handouts. That means we, including those of use who have long despised SUV, are now subsidizing the manufacture and purchase of the thing we want gone. It's a better deal than the no bid contracts the Bushies have employed in the war on terriors, which represents the first Great Plunder This second coming requires no work and no handover of securities or fines, nor does it require removal of the people who engineered the financial crisis in the first place. That signals that the bailout is simply a handout, a redistribution of future public wealth to current money managers and corporate executives. In addition to collecting all they can now, the financial wizards do nothing to improve the markets- while waiting for the Obama bailout, when they aim to receive even more. What does the public receive--a huge debt, unemployment, unplayable insurance rates, unmet retirement obligations--just what was planned, since the point all along has been to get rid of the workers--look at the automobile company bailout.

The people who are suffering are waiting for the Obama, as are the majority of us who are worried, who object to the direction we are heading but who also are powerless to change course--which is why we voted the Obama to the task. The question is whether he is up to the challenge, whether in his economic recovery program, he moves dramatically to restructure an economy skewed toward the rich, away from innovation, change, and true competition. That means lettingthe car companies go, giving workers who lose their jobs unemployment benefits, job retraining, and where appropriate loans to start new business. It means making the useless General Motors cough up plans for the Impact [EV1] or, at least, free the designing company to use or license them as it sees fit. It means creating standards or infrastructure for plug-in electric or hybrid vehicles. It means putting in place a single-payer health plan, which will free workers and businesses immediately. It means go after the people who brought us to this pass. It means placing severe limits on executive compensation to something like 20 or 30 times the lowest paid employees salary, part-time and temporary included. In short it means being bold and creative because nothing else will do.

Hell of a Christmas for lots of people and looking like a worse New Year--that's the holiday season in 2008, the final great fizzle out of late market capitalism--we hope.

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