It's Probably Time to Face the Music

I believe it was a distant relative of mine, Aristotle, who observed that it was the fate of democracy to devolve into oligarchy.  It certainly happened here.  The final push was the abandonment by the United States of even the trappings of social democracy in favor of a devil-take-the-hindmost capitalism without restraints of any kind.  Human nature being the immutable thing it is, a greedy competitiveness became the ethos of the Hollow Men of the Bush Era.  They ran scams, Ponzi schemes, swindles, the whole gamut, settling on the securitization of America's last great asset, its actual land, as the final play.

It all crashed and burned and now America's days as the great hegemonic capitalist are coming to an abrupt end.  The "bail-out" is not actually to restore America to functionality.  Its sole purpose is to reimburse the financial swindlers who call the shots for the Bush Administration.  On their way out the door, they're going to pull a Brinks job of historic proportions.  Empty the Treasury of its last shreds of notional value, its "dollar reserves."  Hey, if it proves legal tender in countries with hard currencies, so much the better.  There is no real harm in taking a hand-out arranged by your friends in high places, even if it proves worth less than it seems.

A moment's reflection should convince you that the "bail-out" is preposterous.  It violates what you might think of as the First Law of Financial Thermodynamics: if the United States is actually $10 trillion in debt, if we run yearly trade deficits of $800 billion, if the American banking system is overleveraged and broke, how do we conjure, out of thin air, another $1 trillion to give to large financial institutions?  If we can actually do that simply by "appropriating" the money, then why do we say we have any national debt at all?  Why don't we immediately "appropriate" enough money to pay off the national debt?  It's only one order of magnitude removed.  There, now we're solvent.  We print the world's fiat currency, don't we?  Then we decide how rich we are and how rich everyone else can be.

The "bail-out" is a hallucination which might work long enough for Bush and his financial cronies to transmute Paulson's unsupervised, unreviewable largesse into something of actual value.  If you read the actual language of this ridiculous piece of "legislation," you will see things that sound simply and fundamentally un-American, as we used to think of that term.  Why would a cabinet member be given dictatorial powers to decide who receives public money, and why would all courts be deprived of jurisdiction to challenge his use regardless of cronyism, bribery, favoritism, graft?  It's simple: the bail-out is theft, pure and simple, and no one in the Bush Administration wants to answer for what they do with that $700 billion.  If the Congress is stupid enough to give Paulson this kind of power, then I think we can safely say at that point - that's all she wrote, there is no one in Washington who actually represents the American people.

No amount of legerdemain is going to really create money where there is none.  The world has caught on to this act.  It's better to face insolvency sooner rather than later, particularly when the efforts to delay the inevitable simply add to the problem.  The last of the bubbles has burst and the bills have come due.  It's time to start powering down the American economy, and if "crises" of illiquidity occur and the "financial markets" freeze up, so be it. We'll have to get used to a standard of living based on our actual productivity and income.  Adding a crushing burden of debt as the economy goes down anyway makes no sense.

Like most observers, I have no confidence that the Democratic Party will do anything other than whimper a few objections to Chairman Bush's latest Socialist foray, and then line up behind his "plan."  Let's face it: they're in on it.  They're on the payroll of the same lobbying groups.  And they certainly don't want to shoulder any blame if the Crash comes with no legislation in place.  They would prefer a larger Crash sometime in the future, when a President who doesn't scare them so much won't give them dirty looks and call them names.