At the end of September Chicken Little announced the sky was falling. Treasury Secretary Hank Paulson wanted money - a lot of money - to prevent catastrophe on Wall Street. Ask me no questions, I'll tell you no lies, Paulson suggested. No strings, no questions, no oversight.
Congress, in one of the few times it managed to overcome its lack of a spine, said no.
But as Wall Street continued its free fall, it was clear Washington couldn't stand by and do nothing. So they passed the Troubled Asses Regulation Pogrom. TARP was given 700 billion dollars to buy up "illiquid assets"...junk, in other words, that no one wanted to get stuck with. But nothing was going to be done for homeowners across the country who were losing their homes. It would, they hoped, trickle down.
That never did work, but the country is still so enamored of Ronald Reagan that they won't admit it.
So now it's November. Wall Street is still crashing, we have a new president-elect, our outgoing president wants to stay the course, and Paulson has already spent much of the money. AIG's got to be happy - they've gotten a healthy infusion of cash. Of course they're frittering it away and giving the 24 hour news cycle fuel for another turn.
Paulson says the original strategy isn't working. We noticed. And he's already got a whole lot less money to spend than he did. Now he's going to give it to banks. Our president-elect wants an auto bailout. The guy sitting in the Oval Office until January doesn't.
I'm no fan of Detroit, but it doesn't seem like we can afford to let an industry that employs three million people go broke. They've got us over a barrel.
Have you looked at real estate ads in California lately? Look at houses for rent. Look at houses for sale. See what this really looks like. "Live in the style you're used to - for less!" promises one ad. "$200/month off NOW!" says another. "Good credit required...income of 100K verified before approval." It's an economy sliding out of control. It's worse in some places than others, but it's going to spread.
And Hank Paulson's the guy holding the money. Unfortunately, not only does he not know what he can do to help, he seems to be one of those people who won't listen to anyone else. So we'll just keep sliding until January, then hope the Obama transition team has come up with a brilliant plan to help us dig in. And if he has an idea and Congress fights him, there's going to have to be an outcry so loud that they don't dare fight us.