The Trillion Dollar President

Posted:

«The proposal, not quite three pages long, was stunning for its stark simplicity. It would raise the national debt ceiling to $11.3 trillion. And it would place no restrictions on the administration other than requiring semiannual reports to Congress, granting the Treasury secretary unprecedented power to buy and resell mortgage debt.»

New York Times

With just two initiatives, the Iraq War and this Wall Street bailout, W will have spent $1,000,000,000,000 dollars. That’s a million million dollars. You cannot be fiscally conservative and approve of W’s administration. It’s a complete farce.

I understand why this bailout is needed: our ecomony and much of the world’s will collapse. The cause of this debacle comes squarely from government regulators not policing the top financial institutions of this country. This is what happens when you “let the market work things out.” You get criminal anarchy.

These wall street types and mortgage brokers would knock over old ladies for their purses if it weren’t for beat cops.

Our government needs to stop the excesses of capitalism. File this under “promote the General Welfare” clause of the Constitution. This is not an anti-capitalist attitude — it’s the voice of experience. Most of the regulatory prohibitions instituted after 1929 to prevent this kind of unprincipaled speculation has been dismantled by Republicans and complicit Democrats over the past 30 years. The boom time of fraud is now over and there’s an ugly piper to be paid.

To those who deeply want to have the feds dump social security into private equity funds, I present the summer of 2008 has a magnificent counter-argument to that insanely risky plan.

You may bristle at the imagined ineffeciencies of government programs, but I prefer that to private grift. Call me old fashioned, but I’d prefer my money squandered honestly at the hands of incompetent federal lackies rather than lining the pockets of a few choice cronies.

Investment capitalism, the mechanism that allows financial risk to be distributed over a set of investors, is a fine ecomonic system for what it does. It cannot exist long without government supervision. Marx identified this long ago and no one credible disagrees with his critique: capitalism, without restraint, will eat itself. No country has ever left markets completely unregulated, including this one. The only debate we can have is to what extend the government regulates private wealth. It will and it must. It’s have no more non-sense about this from the Grover Norquists of the world.

That our ecomony has been seriously imperiled by the failure of so few companies points to a classic investment mistake: our national assests were distributed over far too few entities. Perhaps the strategy of amalgamating massive financial institution into a handful of companies isn’t as wise as it appeared in the past?

Neither McCain nor Obama are well-positioned to comprehensively overhaul our financial system in the sweeping way that’s needed. A new “Square Deal” that targets bogus and borderline fraudulent investment vehicles is need to clean up this wreckage of this new Guilded Age. That, and a long docket of indictments against those who put our entire country at risk. That’s what’s need to restore investor confidence: blood.