The Other I

September 27, 2008

“You can’t fool all of the people all of the time”

Filed under: Political thoughts — theotheri @ 2:15 pm
Tags: ,

If I were not worried about the effects on my personal income, I don’t know if I would be as exercised as I am about the plan being debated in Congress which, even as I write, is meant to save the World Economy.  But first and foremost, the American Economy. 

Or is that what we’re really talking about?  Are we, as so many “ordinary people” think, merely bailing out the Fat Cats who got us into this mess in the first place?  The claim is that the financial mess is too complex for us everyday mortals to understand, but the more I read, the more I have my doubts.  I am not a dumb person nor am I uneducated, nor am I uninformed about this crisis.  I’ve read economists’ opinions from around the world on as many sides of the issue as I can find.

Most popular articles explaining the problem focus on the complexity of the loan bundling that has distributed dodgy loans throughout the global financial system, like cancerous cells hiding from view until they erupt to destroy the institution harbouring them in a weekend.

But I think there is another problem which is just as big, and that is Trust:

First:  How trustworthy is human expertise?   Do you remember the great computer crash that was supposed to happen when the date changed to the year 2000?  All that money spent on software by businesses and individuals convinced by the experts that if they didn’t, airlines, trains, traffic lights, banks, insurance companies, government offices and businesses everywhere along with all our personal computers would cease to function properly.  I think the experts were probably sincere in this case.  They were just wrong.  I’m sitting here now thinking of hundreds of examples when experts have been wrong, but this is a mere blog posting, not a book, so I will stop giving examples.

Second:  How trustworthy is our government?  How about the Weapons of Mass Destruction that Saddam Hussein had and was a major justification for America’s launching the Iraq war?  Whether this was incompetence or deliberate lies on the part of our current administration in Washington doesn’t seem relevant.  For whatever reason, they got it horribly wrong.  I’m wondering about trusting this same incompetent and/or lying government again about the need for an immediate $700 billion bailout.

Third:  How trustworthy are the banks?  We’ve been told for months that the crux of the credit crunch problem is that the banks won’t lend to each other because they don’t trust that other banks are telling the truth about the full nature of the debt they hold.  Washington Mutual Bank which went bust this weekend was found to have been fiddling the true nature of the equity loans it held.  Bankers obviously think all the other banks are doing as much hiding as they can too.

Fourth:  How trustworthy are the politicians?  Which ones have enough integrity to pass legislation they think the country needs even if the people who elect them don’t like it? 

So as an “ordinary person,” here are the questions I’m asking myself:  Will the world as we know it really end if no package is passed by Monday morning?  And if the package is passed, will it really start to solve the problem?  Does it matter that on my last reading of the proposed bill, there is nothing in it to help people facing imminent foreclosures?  Does it matter that in Black and Latino communities, nearly half the mortgages are subprime?  Does it matter that almost by definition, the banks that are going to be helped the most by this proposed bail-out are the banks who have been the most irresponsible in their lending practices? 

I dislike the term “ordinary people” intensely.  It’s a subtle way of putting people down, of suggesting that their opinion is sub-prime, if you will.  Whether they are right or wrong, I don’t think people are ever ordinary.  What “ordinary people” think is often a source of great insight.  But as one of our wiser predecessors once said “You can fool some of the people all of the time; and you can fool all of the people some of the time; but you can’t fool all of the people all of the time.” 

My problem is that I don’t know which it is in relation to this bail-out.

1 Comment »

  1. Remember how we were told we needed to have changes in Social Security or the funds would be depleted. That was before we spent over $557,000,000,000 on our mistaken war. Now we are going to spend another $700 trillion to bale out the economy. I’ve watched my life savings lose 30% just since Oct. I don’t have enough lifetime left to recuperate, I’m not Wall Street or Main Street anymore, I’m just one of the forgotten ones, who isn’t rich enough or poor enough to get help.

    Like

    Comment by djc1 — September 28, 2008 @ 3:59 pm | Reply


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