Every time I see Treasury Secretary Henry Paulson in a television interview, I notice he's developed some new tic. Facial tics. The poor guy, he has accumulated rapid-fire blinking and flashing eyebrows and twitching lips at the corners, and now, full-blown forehead spasms.
But wouldn't you, had you been straining against the oppressively sluggish weight of the most indifferent, out-to-lunch White House halfwit since James Buchanan?
George Bush, I'm sure, sleeps like the gnarly bump on a log that he is, while everyone around him snaps and collapses into neurasthenic puddles. What, George worry? Our latest meltdown, he and Ms. Palin know, is only part of God's plan, but I doubt even God could have orchestrated this byzantine mess, let alone figure it out from here.
After all, economics doesn't seem to be God's strong suit. Just look at the miserable outcome of the divine guidance provided to all those pious, deregulating supply-siders of God's political party who've been in charge for so long. But then again, with or without heavenly direction, economics isn't really any economist's strong suit, either. A darker or more elusive science there never was.
The oddest aspect of this latest "downturn" is that the layman could see it coming. Pretty much everyone on the street knew that when we place at the helm of the economy people who say they can, for instance, slash taxes and thereby increase government revenue -- well, don't you know, there's something suspiciously off balance about the macro- and even microeconomic intuition of such stewardship.
Yet we put them in charge of the whole shootin' match nevertheless, from the specifics of fiscal policy to the general oversight of high and private finance. The result was what Secretary Paulson now calls "excesses." Others call it blind, untrammeled greed and kleptocratic government by corporate lobbyists.
Peter Peterson, a former commerce secretary and current prophet of doom, took time off this week from his regular nervous breakdown over our skyrocketing deficits to say of this economic catastrophe du jour: "My goodness, I’ve been in the business 35 years, and these are the most extraordinary events I’ve ever seen." And last night, on PBS Newshour, an academic economist who appeared to have actually learned something from his studies told us to rest assured, "there is a light at the end of this tunnel; it's the train wreck we're headed for."
At least he belied the joke -- Q: What do you get when you cross the Godfather with an economist? A: An offered explanation you can't understand.
There is, however, at least one other anti-light, if I may, at the end of this tunnel. And that is, there will be much more privatization of profit and socialization of loss. Translation: you're going to get stuck with this tab. You can bank on it.
The New York Times reported yesterday that "the weekend’s events indicate that top officials at the Federal Reserve and the Treasury are taking a harder line on providing government support of troubled financial institutions…. Both Mr. Paulson and [Fed chairman] Mr. Bernanke worried that they had already gone much further than they had ever wanted, first by underwriting the takeover of Bear Stearns in March and by the far bigger bailout of Fannie Mae and Freddie Mac."
Bailout -- an alternate term for nationalization, which means you are now an involuntary stockholder in what was a grossly mismanaged candy store with trillions in mortgage debt. You may lose your own home, but you'll forever own a piece of the greater rubble.
And quite frankly, what choice did Paulson and Bernanke have? Furthermore, what choice will they have but to take a softer "line on providing government support of financial institutions"? It may have been George W. Bush and his deregulatory ideologues (some less ideological than others, like Paulson) who got us into this mess, but now they're as shackled with executing a 180-degree philosophical loop as you are with the bill.
Still, that's not the most egregious jaw-dropper. No, that still awaits us.
You remember those little guys, those laymen, I mentioned earlier? -- the ones who could see all this coming, because since kindergarten they've been properly taught there ain't no such thing as a free lunch?
Well, just watch. About half of them will turn right around and vote for the lobbyist-adorned likes of John S. McCain, he of Bubba Gramm friendship and that of other corporate socialists who in time would revert to the very same Bushian bullshit that got us where we are.
At least that's what the polls say. Only November will tell if we're as collectively stupid as we appear to be.
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