We Are All Even More Fucked

I have deliberately stayed away from commenting on this economic and financial catastrophe because I do not possess a great deal --- fuck, let’s just say any --- expertise in the world of global finance. Mortgage Backed Securities, Credit Default Swaps, monolines… for many years, these words were just chatter that my friends who worked in finance made to eachother while I tried to think of good fart jokes to tell and change the subject.*

But as I have watched Treasury Secretary Hank Paulson “handle” the crisis, I have decided that the financial catastrophe scenario is not really so much about the intricacies of the financial markets as it is about a couple of subjects that I can indeed claim a great deal of expertise in:

a) being over one’s head.
b) fucking up
c) trying desperately to hide a and b.

On Tuesday, Paulson announced that he wouldn’t be using the $700 billion taxpayers gave him to buy up dodgy mortgage backed securities after all.

Never mind that’s what he assured us, implored us, begged us to let him do that a scant two months ago. Now he is going to use that money to buy up bank stock to provide a capital injection, kind of like England did --- and critics of the whole toxic asset-purchase plan suggested in the first place. He has also let it slip that he’s considering other options as well.

In other words, dude is floundering.

This doesn’t look good for us.

In the long run, the US economy is made up of too many greedy, ravenous consumers and efficient, remorseless producers to really fail. I am confident that we will be prosperous, vulgar and insufferably arrogant again.

The only question is how long it will take us to get back there. Unfortunately, there is only one way to get there as soon as possible: do the right thing, at the right time, and with the right amount of firmness.

By that logic, there are many more ways to fuck up and delay our return to economic health.

We could do the wrong things. We could do the right things too late. We could even do the right things at the right time, but do them in a half-assed and unconvincing way. Economic actors hate uncertainty and risk, so if they don’t know how committed the government is to a course of action, then they aren’t going to move until that doubt is removed.

Right now, it looks like the lamest-possible-duck Bush team is failing in each of the three categories. By their own admission, they are doing the wrong things. They are wasting so much time doing these wrong things, that they are delaying doing the right things. And by reversing course and making changes, they are decreasing consumer and investor confidence.

Estimations of how long the credit/financial crisis and the economic slowdown would last are pretty much guesses in the first place. But every time the Government's "solution" has to shift like this, it’s safe to say that we can lengthen it out a bit more.

In other words, this Christmas, only the good little boys and girls will get coal in their stockings. Because that means they can have a few moments of warmth burning those coals in a converted coffee-can fireplace in front of the cardboard box they live in.

Next Christmas, they get nothing. Because they will have boiled and eaten their stockings to survive.

* Who am I kidding? All fart jokes are good.