What a concept! Amidst the "need for speed" being touted by our new official national leaders (that would be SecTreas Paulson and Fed Chief Bernanke), one might ask the musical question, "are these extraordinary times that call for extraordinary measures of extra-legal power"? That is precisely the question asked by Sandy Levinson over at Balkinization, hearkening back to the wisdom of Carl Schmitt and noting, inter alia, the events of post Sept. 11 America and good old Article 30 of the Weimar Republic's Constitution (the clause that allowed Hitler to "legally" exercise "merely" dictatorial and eventually genocidal powers).
Because once again, boys and girls, as with Saddam Hussein's Iraq, we are being told only the potential-- and we should note it is potential-- cost of the government's not massively intervening further into the markets (in a brazen effort to give John McCain a fighting chance to win in Nov., btw; don't think for a minute that the election is not part of these Bush appointees' thinking, if not necessarily the sole driving force). What we are not told, of course, are the risks to doing so, the fact that "the problem" (in the case of the Iraq war, that was actual terrorists rather than Bush-family-bogeymen like Saddam) might not be solved by "the solution"... and that "the solution" was not free.
And I say it is not without irony that two of the senators quoted in the Grey Lady's report on these events are none other than Democrats Schumer and Dodd, both of whom seem to be falling for the current doom and gloom coming out of the Bush Administration-- only instead of Rumsfeld and Tenet being the messengers, it's Bernanke and Paulson; I say this, because you will recall that both Schumer and Dodd fell for the last "sky is falling" presentation from the Bush Administration and voted to go to war with Iraq.
Certainly, this is different from the Iraq situation, if for no other reason as "the threat" is so much more tangible and direct to so many Americans. It is hard to imagine most people seeing the earthquake that hit the financial markets this week (was it conceivable just a few months ago that by the end of September, Bear Sterns, Lehman Bros. and Merrill Lynch would be gone, and AIG nationalized? And the shocks to individuals' finances as the markets roller-coastered were disconcerting. And certainly, cascading credit collapses could result in economic slowdown, if not ruination. COULD. Not necessarily WILL.
And there's the rub. We were told incessantly of "the risk of not acting" with Iraq, that being that somehow Saddam would get together with people he despised (that would be al Qaeda) to give them something he didn't have (nuclear weapons) to attack us. We weren't told the cost, of course-- now over half a trillion dollars and counting, over 4,000 dead and tens of thousands wounded... with al Qaeda leadership still at large, and attacking American facilities as recently as last week-- and hundreds of thousands of troops still committed in both Iraq and Afghanistan, with no clear sense of what "the mission" even is anymore.
And so here we are again. This time, at least, we probably have a better guess as to the cost-- another $500 billion to $1 trillion... short term, anyway, which will be piled on to the national tab (with interest). We can probably treat the high number there as optimistic. But at least, it's a range we can talk about. And we know that we will achieve a short term measure of market stability (the idea being to calm things at least until the election, of course, lest McCain have no chance to rely on vote caging, roll purging, Diebold machines and appeals to racism to pull this one out amidst a collapse that would get even the average American to willingly install a Black man as President as continue the current policies). But beyond that? The only thing we know is that we will have systemically imported an insane moral hazard: go ahead and earn those insane fees on whatever insane transactions you wish... make your fortune, and in the end, Uncle Sammy will stick it to the taxpayer.
And that's just it: the taxpayer is now someone who isn't in the gilded class that made all this money. While it would be hard, as a general matter, to go back and figure out "who was responsible" (such as the evil S&L operators of the 80's that led to the Bush I massive bank bailout called the Resolution Trust Corp.), there is a pretty good surrogate: the rich in general. Certainly, as costs go up while wages and now home values stay flat or go down, and seeing as virtually all the gains in the last 8 years (if not the last several decades) have gone to those at the top of the income and wealth strata, we might consider actual progressive taxation... not at confiscatory rates, but say, just a few points higher than now, broadly enforced on things that the super-wealthy benefit from... such as estates (the beauty of the phrase "the death tax" is its utter irrationality; inheritances are income to the beneficiaries; it should be treated as any other form of income), or luxury goods, or investment income (which, once again, should be treated as any other form of income).
Further, the minimum wage must be indexed to go up with social security cost of living increases-- MUST. And since we're nationalizing insurance companies, why don't we just nationalize health insurance companies, and remove all political obstacles to single-payer national care, once and for all.
I predict that Congress will do the most short-term-expedient and costly to the rest of us "fix" imaginable and in so sense address the fundamental unfairnesses in the system which got us to where we are. That is my prediction, and it is mine. Lather, rinse, repeat. We will hae put a trillion dollars more pressure on Congress to cut future social spending, a great excuse for Republicans to accuse Democrats of being "tax and spend," and our nation's road to becoming Argentina with ICBMs will go on, with the day of reckoning simply kicked back a while, thanks to "the fix," which will be as hastily done as the USA Patriot Act, the authorizations to invade Afghanistan and Iraq, and much of what has passed for "law" these last 8 years or so.
Maybe Bernanke and Paulson have the right solution here. If so, a little-- just a LITTLE-- calm reflection to demonstrate that this is so, and to ensure that systemic structural problems that caused the current mess are better addressed than they are currently-- might make that solution actually be a solution. Just saying.