Bailout, Round 1

Considering how fast the currents, debate and verbal assaults, and state-based reactions have been moving, I am coming to this way beyond starting time. Alas, I am just trying to make some sense of what feels like a senseless time, politically and financially. Even for me, ‘chickens coming home to roost.’

I heard on a program this evening that the initially proposed $700B would be a $2,300 burden on every man woman and child. And, I overheard last week that this contains a $7000 tax burden on every family. Those numbers are inherently wrong nor mutually exclusive. But, I’m trying to read a few trusted authorities, rather than some corporate echo chamber be it the Murdock-owned Wall Street Journal, or some overly-influenced entity that is trying to salvage the names of Morgan Stanley and their personal relationships to the banks that exist today, but may not exist a year from now.

Some of what I’ve found includes:

1) Warren Buffett — yes, of a $5B svaing grace to Goldman — “likened it to an economic Pearl Harbour” [sic]

2) William Greider’s “Paulson Bailout a Plan a Historic Swindle” in the Nation:

If Wall Street gets away with this, it will represent an historic swindle of the American public–all sugar for the villains, lasting pain and damage for the victims.
…. If this deal succeeds, I predict it will become a transforming event in American politics– exposing the deep deformities in our democracy and launching a tidal wave of righteous anger and popular rebellion. As I have been saying for several months, this crisis has the potential to bring down one or both political parties, take your choice. [emphasis added

3) and, Joseph Stiglitz’s “Dishonesty in the financial sector dragged us here, and Washington looks ill-equipped to drag us out“, in the UK Guardian:

The present financial crisis springs from a catastrophic collapse in confidence. The banks were laying huge bets with each other over loans and assets. Complex transactions were designed to move risk and
disguise the sliding value of assets. In this game there are winners and losers. And it’s not a zero-sum game, it’s a negative-sum game: as people wake up to the smoke and mirrors in the financial system, as people grow averse to risk, losses occur; the market as a whole plummets and everyone loses.

Financial markets hinge on trust, and that trust has eroded. Lehman’s collapse marks at the very least a powerful symbol of a new low in confidence, and the
reverberations will continue.

I intend to keep reading from whatever I can deem to be less-biased. That means:

… papers abroad that have been further from Wall Street’s KoolAid, as well as more willing to coherently address corruption, capitalism and regulation: the UK Guardian, the Financial Times (www.ft.com).
… economists who have been calling shady Wall Street for what’s it worth: like Nouriel Roubini, Joseph Stiglitz and Paul Krugman.

Oh, and watching the Daily Show with John Stewart to see the insight wit that the producers over there bring to Paulson dogma, Capital Hill shananigans. Calling what is dumb dumb.