First, money and bailouts. The money's gone. It was based on mortgage-back securities that lost value because many people couldn't afford to pay for payment increases in their creative mortgages. This seems to have been forgotten. So the securities that are going to be sold to pay back the bailout are worth less (or worthless) also. That means a hell of a lot of money disappeared, greased in its skids by fees that made a lot of Wall Street entities rich. The director of the Congressional Budget office, Peter Orszag, says:
"Ironically, the intervention could even trigger additional failures of
large institutions, because some institutions may be carrying troubled assets on
their books at inflated values," Orszag said in his testimony. "Establishing
clearer prices might reveal those institutions to be insolvent."
In an interview later yesterday, Orszag explained using the following example: Suppose a company has Asset X, whose value is recorded on the books as $100. Because of the current economic decline, Asset X's real value has dropped to $50. If the company takes part in the government bailout and sells Asset X for $50, the
company has to report a $50 loss on its books. On a scale of millions of dollars, such write-downs could ruin a company. Such companies "look solvent today only because it's kind of hidden," Orszag said. "They actually are insolvent" already, he said. And yet, he says there is no choice, and the bailout must take place.
In the end, he said, Congress must pass some sort of relief, if only
because Wall Street is expecting it. "If we did nothing, there is a significant
risk of another collapse of confidence in the financial markets," he said.
Wall Street took its money and ran, but now we're hearing how this crises "for the American people" must be solved. The free market way would be for people to lose their homes and Wall Street to lose its investments, but there is an election going on and Wall Street didn't spend eight years gaming the system, enriching themselves, to stop now. Time is running out and the Democrats might be about to take office. There's just enough time for one more smash and grab from the Treasury. And the people must be appeased until after the election. It's a bailout, and we are bailing out the people who took the money in the first place.
Speaking of the election, McCain's attempt to use the financial crises to keep Palin under wraps until after the election has inadvertently revealed something very important about Sarah Palin: She is a believer. It's what McCain is trying so desperately to hide. Like poor, pathetic Kathryn Jean Lopez, she believes what she's told about the world. Her religion is fundamentalist, her politics are extremist, and her personal life is a tangled skein of extreme behavior and willfulness. She's dangerous for the campaign because she can't do the wink-and-nod standard to most politicians, who let the masses know that they're just jollying along the fundamentalists and power-hungry folk in government, just doing business as usual in Washington.
Glenn Greenwald admits he was wrong about Palin; that she wasn't being protected by McCain, MCCain was protecting himself. He doesn't have a firm reason for that, however. He suggests:
But Sarah Palin's performance in the tiny vignettes of unscripted dialogue
in which we've been allowed to see her has been nothing short of frightening --
really, as I said, pity-inducing. And I say that as someone who has thought from
the start that the criticisms of her abilities -- as opposed to her ideology --
were much too extreme. One of two things is absolutely clear at this point: she
is either (a) completely ignorant about the most basic political issues -- a
vacant, ill-informed, incurious know-nothing, or (b) aggressively concealing her
actual beliefs about these matters because she's petrified of deviating from the
simple-minded campaign talking points she's been fed and/or because her actual
beliefs are so politically unpalatable, even when taking into account the
right-wing extremism that is permitted, even rewarded, in our mainstream.
They're both right. She is facile with talking points and issues that are very familiar to her. But when she opens her mouth, the truth comes out. Juan Cole notes:
McCain made several perhaps fatal mistakes on his Long March. He allowed
Sarah Palin to be interviewed on television again, this time by Katie Couric. It
is therefore McCain's fault that Palin was permitted to respond to a question of whether the US faces a second Great Depression, "Unfortunately, that is the road that America may find itself on."
Why did Palin make this mistake? Because she was just saying what she believes, what she was told. She doesn't have the brains to say that the problem is being solved by government intervention. And she's a believer. This will come out with every question that is asked of her. Why does did she attend a church where her pastor railed against witches? She believes in witchcraft. Why does she force her daughter to marry and carry a child at 17? She doesn't believe a woman has the right to choose for herself. Her son is in the military. She walks the walk.
Which is the problem. It obviously never occurred to McCain, the elite child of rank and privilege, the cynic who discards wives as easily as some men change their $500 shoes, that Sharia Palin actually believed every manipulative word his party has been dishing out for so many years. And now he's stuck with her.