What can we do?

For most of his tenure as Secretary of Treasury, Henry Paulson reassured us that our financial system was basically healthy.

Indictment One: He was wrong, consistently wrong. Make that compulsively wrong if you like. Only after the meltdown gathered enough steam to hit all the financial pages did he act. His proposed bail-out, much of which Congress bought, saved the scoundrels who brought on the crisis, not the people on the street. He was more than too-little too-late. His proposal leads to two further indictments.

Indictment Two: Misuse of public money: $2,000 for each and every living American, without asking us. Paulson asked for and received $700 Billion (The dollar direct-cost of Iraq to date) for a bail-out, which he promptly earmarked to buy up bad debts he and his cronies had made. The bailout was needed, he said, because the failing banks were too large to fail. If he is right about that, then bigness is badness.

Indictment Three: If the mere size of the banks involved immunizes them from bankruptcy, were does that leave us? The banks must be downsized, not upsized: the nine troubled banks are set to become just four as one consequence of the bailout. Nor is there any thought, much less mechanism, for downsizing in the bill just passed by Congress. So Congress is complicit--both parties. "Trickle-down economics" only works for Plutocrats .

Who was it that said, "Never put all your eggs in one basket"? This fundamental, ages-old, adage was ignored for the nation for the sake of individual self-interest. This is surely a high crime and misdemeanor that the Constitution speaks of. Henry Paulson was personally recruited by Mr. Bush.

Downsizing is standard procedure for corporations facing slow periods. But the Plutocrats chose to socialize the cost, as they privatized profits and, of course, perks.

Injecting so much cash into failure can have only negative effects in the long term. To see how, consider the simple arithmatic. There are three forms of capital, 1) objects of value, 2) human, and 3) money that connects the other two. By the time the credit crisis and the Iraq War are fully accounted for, the US Treasury will have printed some two-to-five trillion dollars without any sensible change in the other two forms of capital.

Therein lies a double whammy: The dollar loses intrinsic value--forever.

Who benefits? The Plutocrats that's who. They don't keep their wealth in the form of cash; they own properties, businesses, and other things of tangible value. They do have bank accounts, often in excess of $100,000, so they took care of that too--upping bank deposit insurance to $250.000. How many Americans keep that kind of money on deposit?


It takes money to properly fight terrorism. Bin Laden must be raving. He not only underestimated the physical damage he wrought, but the financial damage as well. But really, all he did was hasten the day. The seeds for this financial implosion were laid when controls on banking systems were relaxed. Both political parties bear responsibility for that. But then millionaires populate both.

There is a serious message here for the next Congress: Human nature does not change; so tie down the banking system so that it is immune to human deviance that leads to misuse and abuse of other people's money.

There is a further message for Americans: The longer we stay in Iraq, the better it is for the likes of bin Laden. Not only do they have a steady stream of recruits we motivate, we also weaken our nation's ability to respond to any new troubles, or supposed troubles.

On the humanitarian side, the genocide in the Congo is now five times worse than that in Rwanda. Like Rwanda, we are effectively ignoring the problem. Is this the kind of example we want to set? Apparently; we virtually ignored Katrina. But now that we think about it, Katrina led to a demographic shift that benefits Plutocrats.