As immersed in the media as I spend my days, I've heard from about eighty different people over the past week how doomed our nation's economy is. Yet I'm a little alarmed with how frighteningly easy it's been for me to accept this.
There's no question that this past week has been bad for our nation, and not just one group either. Throughout the strata of society, everybody's getting hurt by this unfolding economic disaster. Workers are getting laid off, budgets that were once tight are now broken, families are losing their homes and homes are losing their worth.
But none of that is anything new: this pending recession, if that is indeed what it is, has been building up a head of steam for a couple years now.
What's new is that for the first time, the people at the very top are feeling the hurt, and they're showing their true colors. Unlike the level-headed people in middle America, who have uncomplainingly tightened up their belts, gritted their teeth and settled in for the long haul, America's rich and prosperous are panicking, yelling and screaming at the prospect of economic doom. And after years of telling those less fortunate to pull themselves up "by their bootstraps," of explaining to jobless workers their termination was the result of "the market correcting itself," of mocking and despising anyone so selfish as to "neglect their personal responsibility" and "leech off welfare," it only took the span of a week for them to do the unthinkable.
They're begging for the federal government to intervene, and I wish them the best of luck in cramming it.
That's right, it's a bloated bureaucracy that eats tax dollars and shits unnecessary regulation, and it certainly can't be trusted to administer a system that would guarantee free health care to every United States citizen, but darn it, the federal government is good enough to shell out $700 billion to "ease investors' confidence" after the Dow drops 7 percent in a day.
When I had to replace a failing wheel bearing on my car last winter to ensure I could make it to work, it cost me about 33 percent of the liquid assets I had on hand at the time. I didn't need the federal government to hold my hand and tell me it was going to be all right.
My Dad taught me an important lesson when I was young... just old enough to get into a casino on international waters, in fact. As I bellied up to a blackjack table for the first time, he told me, "You never gamble with money you can't afford to lose."
When you stack those chips on the felt, you have to divorce yourself from the notion that they represent money that belongs to you. They're a part of the game, numbers in a formula you only control part of. A wise gambler accepts that the chips could come back unscathed, they could mutiply or they could disappear entirely, and strives only to manipulate his or her part of the formula as best he or she can.
And what is the stock market, after all, but an exceedingly complex game without the element of pure chance, controlled only by the whims of its millions of players, each of whom control a small part of that formula? And right now, most of them are getting cleaned out because a great number of them have been exceedingly irresponsible.
Predatory loans, adjustable rate mortgages -- even payday financing. These are some of the threads the credit industry used to build a web, the design of which was to ensnare the less fortunate, foolish and desperate and profit from them. The motive was greed, simple greed, and now, it seems, the credit industry has used those threads to spin a sizable noose on which to hang itself.
What's the bigger tragedy here: the wave of defaulted loans that has welled up to beat against the institution of Wall Street, or the thousands of borrowers who drowned in bankruptcy to form that wave?
As a result of those defaulted loans, banks like Fannie, Freddie, Citigroup and JP Morgan all have millions in unpaid debt hindering their ability to grant more loans and thus make enough money to cover their debt. They want the federal government to step in and shoulder that debt for them, to bail them out as George W. Bush first said they never would.
I've got ten-and-a-half grand in student loans hanging around my neck like a millstone. A year ago, that was about twelve grand. I could certainly become a more active contributer to the economy if the government were to bail me out of that debt, but instead, I keep my nose to the grindstone, my back to the yoke, working my way out one payment at a time.
And I'm one of the lucky ones in America. I was able to count on my parents for some support in college, and I was also able to find the time to work two jobs throughout most of my schooling. I don't owe anything in credit card debt. The average student graduates with a bachelor's degree and $19,237 in debt. The average American carries a balance of $1,673 on their credit cards.
Most of them aren't screaming, crying and begging for help, but if they were, you can rest assured the biggest proponents of a Wall Street bailout would tell them to stick it.
I'm not so naive or blinded by schadenfreude as to think the bloodbath on Wall Street won't affect me. It's certainly taking its toll on people I care about -- my parents, my grandparents and my co-workers are all hurting, and badly. But with steady employment, little savings, some debt, no investments and no immediate need of a loan, I'm in the unique position to weather economic hardship.
That doesn't mean I have any plans to sit back and laugh at the expense of everyone else who's watching their soundly well-laid plans crumble in front of their eyes. Unlike those who champion the cause of an "unhindered, unregulated free market," I believe that society as a whole needs to pull together to achieve the greatest good for the greatest number of people. As UW Sociology Professor and director of the Center on Wisconsin Strategy Joel Rogers is fond of saying, "The markets are useful tools, but they make terrible gods."
So if I'm expected to pony up and pay my share (which is $2,300) for a $700 billion economic bailout package, which I'll never see but my grandchildren will still be paying for someday, I want a few guarantees. I feel Wisconsin Senator and all-around BAMF Russ Feingold, as usual, is spot on in what would begin to constitute a fair bailout package.
That is, of course, assuming a bailout package is needed. I'm still not convinced we shouldn't just let these firms go bankrupt, watch the market tumble, then build itself back up. I was fairly certain that was the way capitalism was supposed to work.
So if we must bail, Wall Street, which stands to benefit most from the package, should shoulder the majority of the burden. The package needs to help the families who are suffering in the midst of the housing crisis, not just the financial overlords that helped them get there, because trickle down economics is bullshit -- if anything, the current market condition proves the middle class's economic woes have trickled up. And the package needs to be more than just a blank check: it needs to include oversight, regulation and serious penalties for the people who gamble with our nation's future to ensure this doesn't happen again, because this has to be the LAST time it happens.
Also, I'd like it if we made the potential recipients of this cash crawl naked across a sandbox full of broken glass and rusty nails, but Sen. Feingold did not include that in his recommendations. I'm sure that was just an oversight on his part.
And whether the bailout works or not, be it officially decreed that no Republican is ever allowed to tout the value of deregulation ever again. The last eight years of financial deregulation are what has led us to this point, and without a fundamental change in the way government interacts with business, we're doomed to repeat it.