Devil in the Details

In our newest screenplay, Fast Times at White House High, we are quickly finding out what the agenda really is. The question that begs to be asked is how much will we spend? How far will the interventionist policies encroach? How much money can we sink into a failing company?

Nancy Pelosi is preaching the beginning of a new round of stimulus spending, ostensibly saying, 'get your pens ready, there is more government to create.'

Our stock markets are reacting to the realities, namely, huge deficit spending, encroaching entitlement programs (remember the boomers and Social Security) and the general defilement of Capitalism.

The conservative right is getting accused of not seeking to solve the problem. Look at the White House's recent ploy. Rahm Emanuel took aim at Limbaugh and foisted him as the posterboy of negative conservatism and those who do not believe in the Obama juggernaut. While the ploy may have arguably failed, we must not forget the underlying idea was to promulgate the destruction of conservative agenda in all forms.

The Right simply has been rendered impotent. Tax cuts are laughed at by Congressional Democrats. Stopping governmental spending is being argued against with circular rhetoric. "We didn't start this mess, so don't get mad at us for trying to fix it.'

My question is, are you really fixing it or are you are beating it with a ball bat? When we see this video of Timothy Geithner in February, saying how government was going to differentiate between the 'good and the bad banks', the question that was never asked- was should we be doing that at all?





While we could debate all day on what qualifies as wise use of government money, is this not a question that entirely misses the crux of the problem.


Daily Precedence

The precedence is being set every moment of every day. AIG reported losing $61.9 billion in the fourth quarter last year. It was the largest quarterly loss in corporate history (reported by Reuters UK, 3.02). Meanwhile, unprecedented governmental actions are being taken. They could indeed cause inflation or they could serve to enrich the oligarchy at the top once again. So why, for instance, is the Wall Street Journal reporting today that over 50 percent of economists give the Obama administration a failing grade for the economy so far?


To grasp that, we might look at the Banking crisis for the moment - what should we have done? We might look at economist Joseph Stiglitz (Nobel Economics Laureate in 2001). Stiglitz's prescription is to let the banks go into bankruptcy.

When banks go bankrupt, they continue business, they reorganize, equity holders lose all, bondholders lose some. The result is desirable though, the ones who made the decisions before failure will most likely lose their jobs. Things change in a capitalistic way, things rearrange. Under normal circumstances, corporations would pick up the pieces. In this environment, Stiglitz does not think that will work and says that government money must be utilized after the reorganized banks reconstitute. I have my own reservations about this.

Fact is, either way, we are already beyond doing what Stiglitz prescribes. More importantly though, at its base, this is not just a numbers crisis, it is also a paradigm argument. It is political. It is polemical. Where government goes and where it stops is what this argument, the banking crisis, the economy, and everything within the crisis is all about. Few are really bringing that point up anymore either out of fear or lack of understanding. I for one, argue that the precedence is destructive.



Thanks for reading- C