Jack & Jill Politics

In what looks like a terrible sequel to Katrina, in which Bush turned one of America’s worst natural disasters into the nation’s worst humanitarian disaster, his administration appears poised to do the same thing to our entire financial system.

I pulled my tiny nest egg out of a large brokerage house many months ago, frustrated by attempts to manage my own money more closely. My financial advisor, who is also a close friend, told me that everything would be fine, that they were receiving seminars from experts telling them that though things looked concerning, that everything would be fine, probably better than fine.

I held his 2 hands and said to him words that must haunt him now as they do me.

“You listen to me — with every crisis this administration has seen, they have managed to find a way to make it worse. Far worse than anyone could have even believed. Here’s what I trust. I trust the Bush administration to find a way to not only make a bad situation worse. No, I fully expect them to turn the financial crisis that is coming – a crisis they helped to create, mind you – into something that is spectacular & historic with global implications that, uh,  aren’t likely to good. Cuz that’s how they roll! Look at 9/11, Iraq, Katrina, now Afghanistan. I fully expect them to astonish us in their inability to handle this in anything resembling the appropriate way. They will find a way….some way – God only knows how….to TOTALLY f*ck this up.”

He shrugged and smiled and picked up the check. He loves this blog btw — so here’s a shout-out to MT. Nowadays, I’m not the only person who thinks that way after Wall Street’s worst week ever. Bush’s speech last Fri was meant to re-assure the markets. Yet it was abundantly clear that he didn’t personally understand 70% of the statement he was told to read and he slouched away from the press conference like a defeated man after refusing to answer questions from the press. It couldn’t have been less convincing than if he’d asked Flava Flav to deliver the same remarks on the health of our financial system instead of Bush. In fact, my recommendation to the Bush administration is to have Flava Flav deliver all its announcements regarding the financial crisis since he’s likely to be taken more seriously at this point than guys like Paulson, Bernanke or Bush. Hmmm…want proof?

The Bush Administration has been in denial and making the wrong choices for longer than you might think (emphasis mine).

As recently as late September, the idea of letting the government buy part of the banking system had been unthinkable in the Bush administration. To many officials, such intervention seemed like a European-style government intrusion in the markets.

“Some said we should just stick capital in the banks, take preferred stock in the banks. That’s what you do when you have failure,” Mr. Paulson told the Senate Banking Committee on Sept. 23. “This is about success.” [note from Jill – sound familiar? Iraq, anyone?]

Mr. Paulson told lawmakers it made more sense to jumpstart the frozen credit markets with “market measures,” by which he meant buying up assets rather than institutions. He staunchly resisted Democratic proposals to require that the government receive an equity stake in the companies it was helping.

But on Friday, Mr. Paulson not only confirmed his intention to buy stakes in banks but gave the idea central billing. “We can use the taxpayer’s money more effectively and efficiently, get more for the taxpayer’s dollar, if we develop a standardized program to buy equity in financial institutions,” Mr. Paulson said.

Jackass. A repeat of “Brownie…you’re doing a heckuva job” was Wall Street’s probably correct assessment of the true status of Bush’s handle on things on Friday morning. By the time Bush stopped speaking nine minutes later, the market had dropped another 107 points and by the end of the day, the greatest stock market crash since the Great Depression was finished for the week.

I held out hope that the world community would come together like they did during Bush’s most aggressive period of saber-rattling at Iran – a strategy which persists – which is to push back hard and force his hand into correct action – which was most decidedly NOT using an invasion of Iran as his exit strategy from Iraq. That doesn’t seem to be happening this time despite the fact this is a global problem. It’s moving too fast and each country’s governing party is looking to save their own tails first before they worry about anyone else’s economy. With Iran, the stakes were high but not quite as high as the Great Depression II – Attack of the Clones. Calmer heads aand coordinated pressure prevailed.

During global crises, I find it of interest to look beyond America’s popular news outlets to head over to the BBC. Here’s what the BBC reported Sunday, not long after Bush told us all everything would be fine.

The world financial system is teetering on the “brink of systemic meltdown”, the head of the International Monetary Fund (IMF) has warned in Washington.

[…]

But our correspondent says there is some disappointment that the G7 plan lacks detail.

Ahead of the emergency summit of eurozone leaders, UK Prime Minister Gordon Brown will hold talks with Mr Sarkozy.

Chancellor Merkel said governments must “redirect the markets so they serve the people, and not ruin them”.

The heads of the EU’s four biggest economies – Britain, France, Germany and Italy – held a first crisis summit last week, but were split over the need for a common plan.

Analysts say another week of plunging stock markets has focused minds and the real test of this weekend’s scramble by world leaders to shore up the international financial system will come once markets reopen again on Monday.

I continue to hope for the best. We all must continue to do so. Yet, this is shaping up to be a Grade A, textbook clusterf*ck, I’m so sorry to say. We must also prepare, given the knuckleheads in charge of the free world, for the worst. Bush’s Spend, Borrow and Look-The-Other-Way policies have caught up with him – and us. Things are not likely to look really bleak until 2009 unfortunately for the next president as the first raft of mass layoffs comes at the end of 2008 at the same time we have what’s likely to be a slow holiday sales season indeed for retailers around the world. Katrina the Sequel won’t just blight the Gulf Coast — it will shake the whole world this time.