What Went Wrong? Read This.

It may not be the be-all and end-all on the question, what caused the meltdown of the US econony, but it comes from someone in a position to offer a credible opinion, and it squares with other analyses out there. This traces the catastrophe back to Reagan. Read it.

Memo to Greenspan: It's Poogie Built

In between spurts of vacuum cleaning and trash dumping, I watched as former Fed Chairman Alan Greenspan confessed to blowing his responsibility over the matter of market deregulation. Greenspan, whom I've lately learned never outgrew his adolescent fixation on Ayn Rand's human-averse theories, actually believed that the market would regulate itself in a perpetual spasm of self interest. He believed fervently that an entity like, oh, AIG, would never never never take an inappropriate risk because doing so might cause it to harm itself. He believed that the profit motive would restrain foolish risk taking.

Well, it didn't, did it?

And do you know why it didn't?

Be warned: You'll need to equip yourself carefully for this demonstration project, and it isn't for the faint of heart:

First, get a giant bag. Then fill it with fresh, hot, buttered popcorn. Then set the bag of steaming hot buttered popcorn amidst four girl-crazy teenage boys. Then stand back.

Translated, the boys are the market, their interest in girls the irresistible imperative to restrain themselves, and the popcorn is the bait. You see what happened.

I'm shocked, shocked.

Only a sublime one percent of human beings can self regulate. The rest of us have ever required some fearsome spectre to keep us on the straight and narrow path. For many, that would be Hell. For others, it's a sergeant, the local constabulary, the school principal, mom and/or dad, or the unmatched terror of peer ridicule.

Hell and high school principals weren't invented because humans can self regulate.

Haven't we known since Hammurabi (he'd be an Iraqi if he lived now) that humans cannot self regulate? Isn't that the self evident fact around which all human societies are structured? Isn't that the one irriducible reason for laws, governments, religions, police, traffic lights? For God's sake! That's The First Rule of People!

What I want to know is, if Hammurabi knew that, and I knew that, how come I'm not CEO of a Wall Street investment bank, making $51 Million in annual bonuses and $300 Million annual salary? (OK I made those numbers up, but you get my drift.)

This kind of thing makes me foam-at-the mouth crazy.

Deliberately ignoring The First Rule of People is bad enough, but then predicating the operations of the most important financial exchange in the world upon ignoring The First Rule of People, and THEN ACTING SURPRISED WHEN IT ALL COLLAPSES? Excuse me. This is dumber than a wedge of cheddar.

This kind of thing is what I call Poogie built.

Poogies are a special kind of male. They construct stuff--material, theoretical, strategic, political, it doesn't matter--and then, when it doesn't work, as everyone else knew it wouldn't work, this is what they do. They form panels before Members of Congress (comprised largely of other poogies) where they excrete yards of multi-syllabic words to explain why it was self evidently impossible for anybody, under any circumstances, ever in history to know ahead of time that it wouldn't work.

Poogies make 18-lb travel irons. Poogies pack kleenex in un-dispensible wads. Poogies make seat belts that physically cannot work for anyone with convex breasts larger than 24-A, and poogies make contractor-size packs of sandpaper pads that don't fit the designated sanders.

Market deregulation is a classic example of poogie-built theory. Like the notion that we'd be greeted in Iraq with rose petals; like the idea that a CIA High Alert warning about 9-11 could safely be ignored; like the notion that Brownie would make a great FEMA chief, or W a good president, market deregulation is premised on all that we know about Neptune and nothing we know about Earthlings. It's so idiotic that it's hard to see why anybody ever fell for it in the first place.

Like Ayn Rand's Tazmanian Devil Theory of Human Relations, the notion that the markets will self regulate is a monument both to an abysmal ignorance of human nature and to the power of depraved greed.

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Thanks to Alan Bail, of the Church of What's Happening Now for semi-private insights into Greenspan's devotion to Ayn Rand.

He's a Day Late, We're a Trillion Short

I'm tired of old men who wait until their fortunes are secure before protecting their fellow citizens and ensuring the security of their country.

Fron "Sad Alan's Lament"
By Paul Krugman, New York Times:

When President Bush first took office, it seemed unlikely that he would succeed in getting his proposed tax cuts enacted. The questionable nature of his installation in the White House seemed to leave him in a weak political position, while the Senate was evenly balanced between the parties. It was hard to see how a huge, controversial tax cut, which delivered most of its benefits to a wealthy elite, could get through Congress.

Then Alan Greenspan, the chairman of the Federal Reserve, testified before the Senate Budget Committee.

Until then Mr. Greenspan had presented himself as the voice of fiscal responsibility, warning the Clinton administration not to endanger its hard-won budget surpluses. But now Republicans held the White House, and the Greenspan who appeared before the Budget Committee was a very different man.

Suddenly, his greatest concern — the "emerging key fiscal policy need," he told Congress — was to avert the threat that the federal government might actually pay off all its debt. To avoid this awful outcome, he advocated tax cuts. And the floodgates were opened.

As it turns out, Mr. Greenspan's fears that the federal government would quickly pay off its debt were, shall we say, exaggerated. And Mr. Greenspan has just published a book in which he castigates the Bush administration for its fiscal irresponsibility.

Well, I'm sorry, but that criticism comes six years late and a trillion dollars short.

Mr. Greenspan now says that he didn't mean to give the Bush tax cuts a green light, and that he was surprised at the political reaction to his remarks. There were, indeed, rumors at the time — which Mr. Greenspan now says were true — that the Fed chairman was upset about the response to his initial statement.

But the fact is that if Mr. Greenspan wasn't intending to lend crucial support to the Bush tax cuts, he had ample opportunity to set the record straight when it could have made a difference.