The beautiful thing about living in a free society is that you get exactly what you want. You want a government that hands out benefits by the truckload? There are politicians that will make that happen for you in return for simply marking a ballot. Do you want to drive a huge vehicle that requires a lot of fuel? No problem. Just buy the car. Want to avoid the muss and fuss of producing the fuel for that vehicle at home? No sweat. Just tell your politicians to tell the oil industry, “Don’t drill here.”
Do you want a TV the size of a ping pong table that costs a month’s take-home pay to hang on your wall? Mssrs. MasterCard and Visa will make that happen for you. At 20 percent per annum.
Do you want to take your house and convert it from a place of refuge for you and your family into the ante for a high-stakes poker game? No one will stop you. Call 1-800-Big Big Mortgage right now.
The past seven days stagger the imagination.
We are being told that the only way to prevent a complete financial collapse is for the Congress to authorize $700 billion of our money to buy assets that are no longer performing. We are being told that by relieving the banking system of these bad assets, we will restore capacity within the banking system to resume making loans and thus providing the liquid funds necessary to a functioning economy.
Ladies and gentlemen, that is huge.
Right now we don’t know if the deal is even going to happen but let’s say it does. I’m enough of an optimist to believe that when all is said and done, the actual tab will be much smaller. While it is true that the mortgages that caused this crisis are not currently performing, it is also true that those mortgages are secured by actual houses. And houses have an intrinsic value that is certainly greater than zero, no matter how depressed the market is at any given moment.
So I’m inclined to believe that when it all eventually shakes out, the bill will come to something considerably less than $700 billion plus interest.
That’s all well and good.
What’s not well and good is the fact that we, the American people, we who are the economy, have gotten ourselves to the place where we have to borrow money from our grandchildren and from places like China in order to stay afloat.
And wouldn’t you know this would all come to a head in the closing weeks of a presidential campaign. The Republicans are blaming the Democrats. The Democrats are blaming the Republicans. None is honest enough to acknowledge that there is blame for politicians of every stripe. Buckets of it.
And of course, let’s blame the financial honchos. They made millions running Fannie and Freddie and Bear and Lehman and Merrill and now, as of this morning, WaMu and look what they did. They wiped out their shareholders while aiding and abetting a giant ponzi scheme.
But folks, if you round up all of the culpable politicians, bankers, investment bankers, brokers and regulators and bring them all to one place, you’d likely be able to hold the meeting at Harvey Hall here in Tyler. The population of this class of culprit numbers in the low thousands.
Think of them as the dealers at the casinos in Vegas.
Think of us as the millions of people who play the games. The thousands of casino employees in Las Vegas would have no jobs if millions of people every year did not head for the desert and throw money on the tables and into the slots.
Similarly, Fannie and Freddie et.al. could have not caused the trouble they did were it not for the fact that we have come to the place that we believe that life is to be lived without consequences. Our willingness to buy today with money that won’t be here until after a lot of tomorrows is what caused us to look the other way while the elite politicos and money barons bled away our equity.
These are the guys we elected. They did the job the way we told them we wanted it done. These are the guys we leave to mind the store when we fail to read our proxy statements and vote at the annual shareholders meeting.
Surely there are millions of victims of the current financial crisis. But they are not all necessarily innocent victims.
Victor Davis Hanson summed it up brilliantly in an article Wednesday. He reminded us that Frankenstein was not the name of the monster. It was the name of the monster’s creator.