An audience of two

Sunday October 05, 2008

The price of democracy
There are some things that you can't put a price on. Apparently, integrity and principle are not among them.

As any fule kno, last Monday Congress voted against a $700 billion measure intended to resolve the global credit crisis. The bill was backed by the President, the secretary of the treasury and leaders from both political parties. Several politicians who were initially opposed to the first draft of the bill had demanded and obtained concessions including formal oversight, assurances that the bankers who caused the problem wouldn't be able to profit, and assurances that the taxpayer would get the opportunity to recover our investment. But that wasn't sufficient to get the bill through.

On Friday the measure passed, thanks in no small part to John McCain who - as he made abundantly clear to ayone whou would listen - had suspended his election campaign in order to help negotiations. By Friday the bitter pill was "sweetened" to make it more palatable to the right with around $150 billion of tax cuts and credits that won't be repaid. These were proposed tax cuts that Congress had blocked because they weren't funded in accordance with their budget rules; it meant spending money that wasn't balanced by tax increases or spending cuts.

The revised bill got 58 more Yea votes on Friday than it did on Monday. So that's over $2.5 billion per vote. $150 billion also works out at around $2,000 per family. Thanks so much for your help, John. And thanks to everyone who voted against the bill on Monday.

American Democracy: the best that money can buy.

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This is rumour control. These are the facts.
It's been a busy week and I've finally got around to jotting down some thoughts from earlier. Throughout this week there's been an image in my mind - the scenes from Alien 3 where Andrews groups the convicts together and shouts "This is rumour control. These are the facts." He then goes on to explain something of what is going on, in terms that they can understand. (I once had a manager, Mike Harding, who took a similar approach. It's very effective indeed.)

All week I've been waiting for someone - politician, journalist, ANYONE - to stand up and do this. It hasn't happened. What we have been told is that there's "toxic debt" in the system, and that's whet the government wants to buy. It's still not clear to me whether that means the government is going to buy up the defaulted mortgages themselves and thus guarantee that the debt will be repaid. Or whether they plan to buy the actual houses themselves. Or if they are only prepared to buy the "derivative securities" which the banks have created. It's not clear to me what the government and taxpayer is getting for their money, because it sure as hell isn't the same deal that Warren Buffet got, and it's not clear to me why he can arrange a better deal. OK, so he's the world's greatest investor; that somehow gives him more clout than every single other person in the USA combined?

Obviously this is Still-President Bush's job, but neither he nor Paulson seem capable of doing it. Neither are the presidential candidates. And Brian Glover died in 1997, so I guess we're stuffed.

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