This Financial Mess Is All Ours

September 29, 2008

I’ll start with a caveat:  I don’t know anything about economics.  My understanding of the current mess in the financial markets is rudimentary at best.

Okay.  That said, I’ve been going back and forth all day with a Republican friend of mine about who’s to blame for the failure of the bailout/rescue bill and what Obama should have done and what McCain should have done, and whether Pelosi or Boehner is being a bigger idiot right now (and that, my friends, is a difficult call).  But it occurs to me that we, the American people, are as much to blame for this mess as anyone.  Why?  Because we want it all.  We always want it all.  We want low interest rates, and we want money to be available for whatever we want to buy whenever we want to buy it, and we want low mortgages, and we want big houses, and we want new televisions and computers and all sorts of other toys, so we want lots and lots of credit and lots and lots of credit cards.  Bad debt lies at the root of this entire nightmare, and we are the kings and queens of bad debt.

When this crisis broke two weeks ago folks on the left (myself included) screamed bloody murder because we were going to bail out the wealthy Wall Street types “who caused this problem” and leave the middle class holding the bill, and folks on the right screamed bloody murder because the bailout was just one step short of “nationalization of the banks” and it was a fiscal nightmare.  Early polls indicated that nobody wanted the bill to pass and phone calls to Congressional offices were running 99-1 against.  And yeah, maybe both sides had and continue to have a point. 

But now the bill is dead and the markets have tanked and we’re up to ears in financial shit and suddenly everyone’s saying, “Oh my God, the bill is dead!  What the fuck are we going to do?”  And you know what people?  We’re right where we deserve to be. 

This is a really serious time for the American economy.  John McCain and Barack Obama are both right when, in their saner, bipartisan moments, they say that we have to do something and do it quickly.  Sure, it would have been great if our leaders had ignored all those calls and polls and done what was right despite the fact that we were acting like spoiled brats, but frankly they’re politicians and we should know better than to expect that much of them.  The bailout bill sucks.  It blows bulldogs.  It’s hideous and awful and it establishes all sorts of awful precedents.  But you and I both know — and people looking at the drop in the Dow and the failure of Washington Mutual and the nationalization of banks this past weekend in England and the Netherlands are finally starting to figure this out, too — that doing nothing at all is going to be ten times worse.

So suck it up America.  Call your Congressperson and/or Senator and tell him/her that you were wrong to make those angry phone calls last week, and it really would be helpful if we could find a way to dig ourselves out of this shithole before the entire global economy falls off the same cliff that the markets fell off of today.  You want bipartisanship?  Here’s bipartisanship:  Democrats and Republicans on the Hill are behaving like preschoolers.  So lets whip all of them into shape and tell them to fix this mess, before it’s too late.

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3 Responses to “This Financial Mess Is All Ours”

  1. Graham said

    Here in Australia banks aren’t allowed to hand out money to people that cannot afford to make the repayments.

    How come you can do that in the USA?

    Seems to me there may be too many Gordon Geckos running around.

  2. davidbcoe said

    Nancy and I were talking about this the other day. When we were applying for our mortgage the bank told us that we could borrow up to X amount on the theory that our payments would ONLY be 1/3 of our monthly income. 1/3! More recently they’ve been lending so that payments are up to 1/2 monthly income! We were comfortable with a much lower monthly payment and that’s what we arranged — maybe 1/5 or 1/6 of our monthly paycheck. But you’re right — U.S. banks have been spouting this stuff for years now and it’s nuts. We had the resources to be able to say “no thanks” to the 1/3 thing, but lots of people don’t. They really want a house and they really need the money, and the banks are more than happy to give bad advice.

  3. Ferdy said

    Ooh, never knew the issues with Fortis here in the “benelux” would be known in the states.

    I have to say, I kinda laughed my ass off though. I don’t know how deeply this will affect the Netherlands or myself, but really, buying a bank (the ABN AMRO) for 24 billion (I think billion is the English word anyway :P) euro without first making sure you actually have the money is just stupid. Stupid, stupid, stupid.

    Its a bank, its supposed to know HOW to handle money. This is not what I call doing a good job at that.

    Even better though, the ABN AMRO has to be SOLD again by fortis… current estimate of ABN’s worth? 10 Billion dollar. Good job!

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