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March 17, 2008
Paul Krugman: The B Word
Paul Krugman, The New York Times, March 17, 2008
Last week, Robert Rubin, the former Treasury secretary, and John Lipsky, a top official at the International Monetary Fund, both suggested that public funds might be needed to rescue the U.S. financial system. Mr. Lipsky insisted that he wasn’t talking about a bailout. But he was.
It’s true that Henry Paulson, the current Treasury secretary, still says that any proposal to use taxpayers’ money to help resolve the crisis is a “non-starter.” But that’s about as credible as all of his previous pronouncements on the financial situation.
So here’s the question we really should be asking: When the feds do bail out the financial system, what will they do to ensure that they aren’t also bailing out the people who got us into this mess?
Let’s talk about why a bailout is inevitable.
Between 2002 and 2007, false beliefs in the private sector — the belief that home prices only go up, that financial innovation had made risk go away, that a triple-A rating really meant that an investment was safe — led to an epidemic of bad lending. Meanwhile, false beliefs in the political arena — the belief of Alan Greenspan and his friends in the Bush administration that the market is always right and regulation always a bad thing — led Washington to ignore the warning signs.
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Robert Scheer: Bush’s Legacy of Failure
Robert Scheer, TruthDig, March 19, 2008
That idiotic “what, me worry?” look just never leaves the man’s visage. Once again, there was our president, presiding over disasters in part of his making and totally on his watch, grinning with an aplomb that suggested a serious disconnect between his worldview and existing reality. Be it in his announcement that Iraq was being secured on a day when bombs ripped through that sad land or posed between his Treasury secretary and the Federal Reserve chairman to applaud the government’s bailout of a failed bank, George Bush was the only one inexplicably smiling.
Failure suits him. It is a stance he learned well while presiding over one failed Texas business deal after another, and it served him splendidly as he claimed the title of president of the United States after losing the popular, and maybe even the electoral, vote. It carried him through the most ignominious chapter of U.S. foreign policy, from the lies about Iraq’s weapons of mass destruction to an unprecedented presidential defense of torture.
The totally unwarranted assurance was there this week as the once proud dollar fell into the toilet and the debacle of Iraq and Bush’s other failed Mideast policies pushed oil prices to record highs. The Europeans, who didn’t support the U.S. imperial intervention, are doing much better, not having to pay for guarding besieged oil pipelines while U.S. taxpayers are saddled with trillions in future debt, not to mention 4,000 U.S. military deaths and 30,000 U.S. injuries in a war the administration had promised would be paid for with Iraqi oil revenues. Even in Baghdad last week, there wasn’t enough oil to keep the lights on for more than a few hours.
But the president is happy because his legacy issue, the war on terror, is intact. No matter that this week the Pentagon was forced to release a report conducted over the last five years that concluded, after surveying 600,000 official Iraqi documents captured by U.S. forces, that there is “no smoking gun” establishing any connection between Saddam Hussein and al-Qaida. The report was so embarrassing that we taxpayers, who paid for it, were not going to be told of its existence, even though the explosive conclusions were totally declassified, until ABC News forced its posting online.
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