Thursday, July 17, 2008

Yesterday Bush declared that the economy is 'strong and growing'. It took my friend Michael several minutes before he could stop laughing.

But that Bush is insane is nothing new, and neither is his ability to make us laugh whilst dooming us to the grave. I'm here to talk about something else.

Senator Jim Bunning is insane. This might be news to you because who the heck has heard of Sen. Bunning? He's the guy who had this to say about the proposed Fannie Mae/Freddie Mac buyout option:

When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turned out it was socialism here in the United States of America and very well, going well. The Treasury secretary is now asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The Fed purchase of Bear Stearns assets was amateur socialism compared to this.

I'm very glad we have Senators protecting us from the Red Menace, but perhaps there's a different sort of red menace facing us than there was thirty years ago. If Frannie and Feddie go down, it's not just people who signed mortgages they can't support who get screwed. We all go down with the economy.

The economy is, contrary to what certain lunatics claim, not strong and growing. It's weak and getting weaker. Losing F&F would be a major blow to a thriving economy. To one shedding jobs at >50 000 per month, inflation soaring, and--oh, yeah--housing prices dropping and foreclosures exploding and mortgage lenders barely alive, it's just not an option. (And that doesn't mean 'let's not think about it and hope it doesn't happen'. It means 'Let's do something to prevent it.')

Someone--probably Bunning, but I'm unsure--pointed out out that the request for authority caused a drop in share prices of the two companies.

Duh. The request signified the Treasury Secretary's lack of confidence, which would obviously prompt lack of investor confidence. But insisting the economy is 'strong and growing' will not give any sane person confidence. What does is saying 'Oh, yeah, we see the big glaring problem right in front of us and we're preparing to deal with it', and in the long run (if the preparations aren't blocked by Commie-fearing morons) will strengthen investor confidence and possibly even make it unnecessary to follow through.

Other options should be thoroughly explored, but ranting about the fact that we're daring to consider doing what could end up necessary is stupid. Refuse to sign the 'blank cheque' if you must--I'm rarely a fan of giving Bush more authority, after all--but signify support with at least a limited amount, perhaps with only contingent authority.

Though if we do let the dollar completely die, it would show those damn Commie investors in China. Prop up our economy for us, will you? Well all your investments in us are now worthless, so there!

No comments: