Of course, this effort to work in unity requires a bit of trust. A congressmen needs to make the assumption that the rest of the congressmen had the same desire to get the “right” thing done for the American people.
After 9/11/2001 the country had a rare moment of unity. We all believed that only the most unpatriotic person would desire to take advantage of a situation of national emergency. At the time we were under the impression that our president would learn what he could about the situation and do the “right” thing.
Only years later did we learn that the president and his administration had his own personal agenda. We have since learned that the George W Bush administration made an effort to distort the facts and present the best case for war in Iraq. Instead of a healthy public debate on this serious endeavor we were told to trust the president and hurry forward with this urgent solution. Similarly the so-called Patriot Act was named in an order to cloud the true nature of this bill. The Patriot Act is known to take away the liberty of many patriotic Americans -- but it was urged by the president for congress to pass the bill without actually debating it. Ironically the Patriot Act was undemocratically railroaded through congress resulting in the loss of some American liberty. And, this effort was only possible because the congress trusted the president to have the security of the American people at heart.
As the old Chinese Proverb says, “Fool me once shame on you fool me twice shame on me.” And congress has learned its lesson; it will be a very long time before the congress will trust the word of a president and act on his word alone without debate or supporting evidence.
Is it any wonder that when the Secretary of the Treasury asks the congress for $700 Billion dollars that he can do whatever he deems necessary to fix whatever problems he happens to find with the financial banking crisis that we should view his motives with suspicion? Of course we should worry that a treasury secretary with only a few months left before he gets back to his area of interest -- the financial banking industry -- he just might be planning a bailout for himself and his friends. There currently isn’t any reason that we should trust the Bush administration or anyone associated with them to do the “right” thing. In fact it is more prudent to expect that they have some other motive than national security. Of course it is up to us and the media to find out what that motive is.
This crisis illuminates a few things.
First, in order for any government to work there needs to be a level of trust between those in the government in order for any swift action to take place. When that trust is broken the government can no longer function. If the citizens understand this, then they can vote in new representatives that share some level of trust. But, when the trust disappears then we have an adversarial system destined to do nothing at all. As long as the rule of law continues without trust then we are stuck.
Second, if we have a lack of trust in our government, then imagine the level of mistrust in Iraq where many members of the government have lost family members and the enemy is sitting across the aisle. How can trust be restored in a government like that?
Third, Republicans have always recited than mantra of Democrats equal special interests. But, Republicans have their own set of special interests -- the financial banking industry.
Fourth, our economic system needs a set of rules that are enforced to protect the average person from being swindled. These laws shouldn’t allow the temptation of cheap money now for an expensive repayment schedule in the future be allowed. This, after all, is the kernel of the issue that brought the financial industry to begging in the streets. And, begging in the streets is so unbecoming.
Fifth, if the capitalist system is to work then there needs to be a significant loss for those that took the risk of creating these adjustable rate mortgages and conned people into buying them. The people that made these decisions should be thrown out on the streets and replaced by a whole new group of people that are willing to revamp the system. Allowing these people to walk away without losing their shirts will encourage them to try something just as ridicules again in the future. If these people don’t feel financial punishment for taking a stupid risk, then they will risk our economy again.
How can our capitalist economy survive without trust?
When we go to the store to buy a CD we trust that the CD will have the music we want on it. When we buy food at the store we trust that we won’t be poisoned when we eat the food. When we buy a new car we trust that it will work for a significant amount of time before we need to buy a new one. Trust is how our economy works and how our country runs.
But, there is an undercurrent in our country that puts weight on deception. In some circles people believe that one is clever for selling something that isn’t worth the price paid. Keeping the truth a secret is the key to making as much money as one can from this deception. Once the truth is out, then the product can no longer be sold for a significant profit. However, the clever person is sure to be up to the next great deception that will earn another tidy profit until its discovered as well. The justification for this action is that no one will pay more than the market will bear. If people are willing to pay more then there must be some value that they are paying for. The untold truth is that the premium is due to lack of information flow. And a market without access to the truth is not a fair market.
Imagine bundles of adjustable rate mortgages sold for the potential premium increase once the teaser rate expires. The purchasers are expecting a large future payoff, while the people making the payment are not prepared to pay the new rate when mortgage payment doubles or triples. It is a train-wreck waiting to happen. And, these bankers have the Republicans in congress in their pockets because the have been financing their campaigns for years. The sad thing is that the people who created this junk no longer bear responsibility because they sold these bundles to unaware investors who believed the ratings of these loans. Once again fundamental trust was lost.
We will one day recover from this mess. Hopefully it will be sooner than later. However, it will take a long time for us to recover the naïve trust that we once had in our financial system, our government and our country.
Don't forget what Stephen Colbert said, "Reality has a well-known liberal bias."
Cross Posted @ Bring It On, tblog, Blogger and BlogSpirit