Tuesday, September 30, 2008

Plan B

I find that I can’t depend on Plan A, so I have only a Plan B. Plan A almost always depends on flashy but fallible equipment and high levels of coincidence or unprecedented cooperation. Sure, it sometimes works, often spectacularly, but you can’t beat Plan B for consistency and reliability.

When you have Plan A, you have to dream up a Plan B anyway, for backup. But why bother making two plans? One to step in when the first one flatlines? Sure, it sounds smart, provided you have time to concoct two plans—hell, time permitting, why not three or four plans?

In a pinch, lose the fancy buffer, and go right for dependable Plan B. Plan A is just to impress the investors anyway.

Speaking of investors—the government is now talking through alternatives to the failed $700 billion bailout. McCain went to the trouble of putting his campaign on hold (or at least announcing that he was doing so) so that he could rally the troops behind the bill, which failed yesterday, thanks to his fellow Republicans.

McCain blames Pelosi and the Democrats for the failed plan—but clearly most of the naysayers were his Republican colleagues, whom he’ll be expected to finesse, if elected. Of course, the same applies to Obama—he supported the bill, as well—but he at least did not make a big show about saving America’s economy. Then again, unlike McCain, he didn’t bankrupt his own campaign a year ago and have to scare up new money to pick up the pieces.

Rich man that he is, McCain holds $200 thousand in credit card debt. I know jackshit about economics, but I think I know as much as this guy does.

But here’s the catch. With the clear understanding that economics is several miles above my head, I sort of think the Republicans were right to vote against the bill—but not for the reasons they give.

First, I’m deeply distrustful of the “crisis” rhetoric surrounding the President’s and others’ presentation of the plan to help failing credit markets. It’s the same impulse buying we jumped at to get ourselves in Iraq, give the White House powers to spy on US citizens, and switch off checks and balances, making the Presidency even more unilaterally powerful than it’s ever been in our history. Act now, we’re told, there’s no time to think things through.

Second, certain wording originally in the bill should set off warning signals about what the Bush people are up to. Namely, “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” No oversight? This from the same folks who brought us the crisis in the first place?

Third, I’m pretty sure once we’ve plied them with our tax money, the investment firms will want to make a show of acting more fiscally responsible, to prove themselves worthy of the kind gesture. How will they do this? I suspect, by downsizing low-level employees and tightening screws on the poor slob billpayers who have tried to borrow within their means and diligently repay their debts—at a fat interest.

Sort of like 1979 and Chrysler all over again--$2 billion in government guaranteed loans, with which Chrysler cleaned its slate by paying off only 30% of its debts and then promptly fired 42,600 hourly wage workers, along with 20,000 salaried white-collar employees—eventually allying itself with European carmakers, shifting some auto production to Austria.

Surely, a lot of people must understand this mess much better than I do. What do I know about money? But something in my gut (and, at bottom, that’s all this blog is about: my suspicions, not based on a keen understanding of markets) tells me to beware of Bush when he cries panic, when he begs for cooperation. It smells too much of his and his pals’ old tricks.

Besides, I need to hear what color-threat code we’re at for financial disaster. Have we actually hit orange yet?

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