Let 'em jump

Here's an article from the Washington Post explaining how Wall Street machinations, executive branch negligence, congressional greed and the legacy-whoring of Alan Greenspan all combined to contribute to the Wall Street meltdown. And now we're supposed to pay for it.

In an effort to offset the economic strain from these losses [from the bursting of the Internet bubble], the Fed once again rapidly increased the money supply and slashed short-term interest rates to 1 percent -- a level that hadn't been seen in more than 45 years. This enormous monetary stimulus (along with significant federal spending) energized the overall economy, but it also led to the greatest housing boom -- and possible bust -- this country has ever encountered.

(snip)

Once again, the investment banks raked in billions of dollars in fees, giving them incentive to keep lowering underwriting standards, allowing mortgage companies to originate and sell even the most unscrupulous home loans, which Wall Street then dumped onto the investment community. Wall Street never once questioned the ethics of these activities; it too was focused on the enormous rewards that allowed its firms to pay out an unfathomable $62 billion in bonuses in 2006 alone.

The price of all this greed? Sadly, because of the actions of the investment banks, the mortgage industry and the rating agencies, the investment community has now incurred an estimated $1 trillion and more in losses. Even more troubling, housing prices have dropped 20 percent from their July 2006 highs, with the very real likelihood that housing could contract another 15 to 20 percent -- essentially wiping out more than $4 trillion in housing values. This would be the biggest hit since the Depression to Americans' most important asset.

(snip)

Wall Street's actions are now profoundly hurting American families, communities and the entire U.S. financial system. People are being thrown out of their homes. Once seemingly indestructible financial entities are succumbing to the crisis they have created and have jeopardized the stability of the global financial system. Isn't it ironic that the same firms that preached free-market capitalism are now the ones begging for a taxpayer bailout?

The writer is a Wall Street guy so he certainly isn't politically suspect like I am. One could wonder why this wasn't being written last week, or anytime over the past 5 years, really, but who would have heard it through all the Swift Boat politics?

The smartest thing the Fortune 500 ever did was transfer the pension system to the 401(k) system, because that gave a lot more people a stake in the wellbeing of these financial industry reprobates. It's penny ante by comparison, but it would be much harder to sell the bankrupting bail out on the table now if Richie Rich was the only one benefiting from it.

Unless and until I hear someone in a position of authority suggesting, nay demanding that the Bush tax cuts be rescinded now, I will know they are not serious.

And while I'm on the subject, let me ask you one question that may seem gratuitous: Can you imagine anyone less suited to deal with this issue, who inspires less confidence in his competence, understanding, or judgment, than George W. Bush? It is the tragedy of this country's broken political system that, in fact, I can - and she's running for Vice President.