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Financial Crisis: Still In The Early Innings

Posted by SHAUN MULLEN, TMV Columnist in Economy.
Sep 21st, 2008 | Comments

The more I try to digest the $700 billion taxpayer bailout of failing financial institutions proposed over the weekend by the Bush administration the greater my chest pains become. Other than its aim — to buy up distressed mortage-related assets — there is nothing to like about it and much to fear.

The prescient Kevin Phillips, the former Republican strategist, explains to Bill Moyers why we should be frightened — very frightened.

Hat tip to Barry Ritholtz at The Big Picture

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Jazz

This has to be my favorite part:

BILL MOYERS: So we're all going to be poor? Well, not all-

KEVIN PHILLIPS: Well, we're not all going to be poor because there are people in Wall Street who've used all this new technology basically to bet the other way. I mean, one of the things that finance can do now, it can bet on anything. It's like Las Vegas merged with insurance and real estate people. And they have figured out new ways to gamble. And they can gamble on how many people in Ohio are going to lose their shirt.

And excellent analogy. We're not ALL going to be poor, no. The people who actually led the lemmings to the edge of the cliff will be fine. They will continue to bet on how many people in Ohio will wind up homeless and cash in on being right. They also will get no pressure from Paulson to give up any smidgen of their golden parachutes in exchange for being bailed out. So don't lose any sleep over the future of the Wall Street barons. They'll be just fine.

mikkel

This Moyers' interview is an excellent companion piece because Bacevich connects the huge debt increase to political policy and tone as well as our militarism. I agree with everything that Phillips said but I agree with Bacevich that this wasn't just pushed on us, but is driven by the country's overriding concern with cheap gas and credit at the expense of all else.

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