Posted on 09/27/2008 7:25:07 PM PDT by 2ndDivisionVet
IT IS tempting to view events in Washington this weekend as one long episode of The West Wing. Its creator, Aaron Sorkin, came up with some pretty fanciful, if compelling, plots.
But even he would have balked at devising a crisis so intense that the President, the two candidates to replace him and the Republican and Democratic leaders of both legislative chambers would get around one table and shout at each other for several hours. Or that the patrician US Treasury Secretary would become so overwhelmed that he would get down on one knee and beg the Speaker of the House of Representatives for help.
But that is exactly what appears to have unfolded in the White House over the last three days. And make no mistake – this particular drama affects us all. When George Bush added to the tension by warning those present that without an agreement on a $700bn deal to bail out America's toxic debt-laden banks "this sucker could go down", he was speaking about the global economy, not just America's.
Every one of us – anyone who has a job, a mortgage, shares or a pension, anyone who depends on the Government in any way to live – has an interest in these negotiations. If US banks look vulnerable, there will be a run on shares that could make Lehman Brothers and HBOS look like a tea party. If global investors, including central banks and Asian investors, lose faith and start selling off US debt, a run on the dollar could follow which would pitch the world's most important economy into a full-blown recession. The suffering in Britain, and all western economies, would be great – not least because our own ability to spend our way out of trouble has been hamstrung by the growth of national debt against Gross Domestic Product. If anyone doubts our economy's vulnerability they need only look at Bradford & Bingley's travails this weekend for proof.
Which is why Gordon Brown has been such a vocal advocate of Henry Paulson's $700bn bailout plan. The Republican Treasury Secretary has turned political logic on its head with his plan for effective nationalisation of huge chunks of America's financial sector. But without such drastic action economic calamity lies ahead. Not in months or weeks, not even in days, but in hours – and as talks continued into the night yesterday, the clock was ticking towards the opening of the Asian markets, then Europe's and then America's. A deal must be struck, and the impact on Republican and Democratic candidates in November's elections must be a secondary consideration.
Of course, Brown has had other elections in mind at this time of global economic crisis: first the Glenrothes by-election, then the General Election he must call within 20 months – and before it, possibly, a Labour Party leadership election. The Prime Minister, in fact, has used recent turbulence to minimise the risk of a leadership challenge and to boost his longer-term prospects. At last week's Labour Party conference he argued with some success that he, Westminster's biggest beast and longest-serving former Chancellor of the Exchequer, is uniquely placed to see Britain through these troubled times. His speech was as good as could be expected of this notoriously poor orator; his attacks on the pretenders – in his own party and beyond – hit home; there were a few glimpses of new policies which may find favour with a disenchanted electorate.
But Team Brown must know that this may be a temporary respite, and that the "bounce" in the polls could fall away again like a dead cat. Much will depend on how David Cameron responds this week. His own performance at last year's Tory conference, and especially that of shadow chancellor George Osborne, burst Brown's early bubble of popularity as Prime Minister. But much more will be required this year. Cameron's poll lead is soft, the result of despair at Labour rather than any great enthusiasm for the policy-lite Conservatives. This week – at this time of global economic uncertainty – Britain will be looking for signs that Cameron is prime ministerial material and that his party, whose front bench has little proper business experience, is a government in waiting.
Another person ( i forgot said that " if the government buys all the mortgages he heard alot of people would stop paying them anymore and line up for a better rate and lower principle because every mortgage holder is a voter and would never be thrown out and that would kill the bailout.
I’m waiting to see the names of the 100 or so GOP saps that will sign on to this charade.
With regards to the commies
How many billions do Red China investors have to lose until we're even with them for stealing our intellectual property? DVDs, CDs, literature, technology and anything of value have been stolen openly and without apologies. Even the WTO cannot stop it.
In reply #4 I was speaking of Chi-Com investments in our collateralized debt obligations. How much did the Chi-Coms lose and how much more is required for them to lose until we are even with the value of the intellectual property the Chi-Coms have stolen?
Forget the DC follies. What will be will be (sounds like a bad song). The Congress will screw us sure as the sun will rise. When it comes time to fix the mess, they will pander, give taxpayer goodies to special interests, double the inflation rare and make sure any profits go back to Congress to spend instead of paying off the debt they are abotu to create. The size of government will vastly increase, power will grow, taxes will rise, and the average citizen who actually is expected to pay for this mess will be screwed.
This is preordained...this is Congress. It is what they do.
Bears poop in the woods and Congress poops on the taxpayer.
No, look to the EU. Two BIG banks are in the process of failing and will go down any day...The UK’s B&B mortgage bank and Belgium’s Fortis.
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