Thursday, January 15, 2009

Epic Fail #4: Our MBA President Bankrupts Us All

Part 4 of my Four Fails series.

George W. Bush did not run on an election platform of dragging us into a Middle East quagmire or letting disaster-hit cities fester and rot. These were on the fly decisions by him that have turned regrettable but could not have been predicted before hand.

However, he did run on a platform, if you read between the lines, to protect the economic interests of his backers, a cross-section of the very rich, many concentrated in the resource extraction industry. His contribution to spiraling election expenditures was the innovation of getting super-donors to bundle donations from associates and underlings into mega-contributions that broke the spirit if not the letter of various ineffective campaign finance regulations.

So perhaps it is only fair to judge his success or failure against the goals of his natural constituency. And while there may be some ideological benefit of the doubt given to him by the hard-core right, I think it is safe to say that anyone who has checked their stock portfolio, mutual fund, 401(k), or pension statement lately doesn’t feel much richer.

If I were a former wealthy backer of Dubya (both formerly wealthy and a former backer) I would be as mad at him as Bernie Madoff’s pigeons. Dubya ran a Ponzi scheme aimed at keeping the money flowing until someone was forced to pay the piper, only the bill came due too soon and credit (not to mention the credit crisis) is being placed on his shoulders. Superlatives to describe the vastness of the economic collapse are being worn out and the standard economic news disclaimer of "since the Great Depression" is no longer automatic. We are upside down in the ditch leaking gasoline with a runaway train full of high explosives headed our way. Just how did we get here if the Republicans are the party of restraint?

Bush’s tax cuts were presented under the compassionate conservative Trojan Horse of trying to make the system simpler and fairer. While there were a few sops thrown to the working poor and the middle class, the biggest beneficiaries were wealthy people with large pools of non-wage income. Or as Bush calls them, Pioneers. And his largess trickled down. For years the champagne flowed as the capital gains rolled in. In the cheap-credit-fueled bubble, everybody was just a phone call away from a cash-out no-equity-needed loan. People were borrowing money like there was no tomorrow. And then there wasn't one.

But it wasn't just us homeowners spending beyond our means. The Dubya era GOP-held Congress went on a binge that made the proverbial drunken sailors look like the very picture of fiscal restraint. In the eight years of Bush at the register, the national debt has nearly doubled from $5.7 trillion to $10.2 trillion and climbing.

An inherited surplus of $230 billion has turned into a deficit of $1.2 trillion. Now quibblers go into the smoke and mirror distinctions between public debt and intragovernment debt and how Clinton didn't really balance the budget, but he sure did better than Georgie. You can’t move the decimal place an entire digit to the left and hide it. And it’s not like Dubya wasn’t using his own Houdini-at-the-Hippodrome sized mirrors as he kept his Iraq debacle off the books. He refused to raise taxes and continued to fiddle as Baghdad burned.

All of this was carefully gauged to coast past his administration. All the budget busting giveaways were back-end loaded and rosey-scenarioed away. Guess what? We are at the out-years and the worst case scenarios sure would be fantastic news right about now. The carefully misdirected chickens came home to roost a few months too early for Bush to plausibly blame his successor. And most of these chickens were the result of some really lax henhouse guarding on the parts of foxes in power.

People are running around shocked, shocked that Wall Street oversight was so shoddy, but the handwriting was on every wall in sight. As part of his peculiar knack for outdoing himself, Bush had already weathered one scandal involving massive fraud that pauperized stockholders and pension fund managers. Do the names Enron and Worldcom mean anything? These crooks were offered as scapegoats to the gods of unfettered capitalism and some even served time before conveniently dying just to avoid jail but lessons went unlearned.

Ken Lay and his crew (who were Texas asshole buddies of Bush before he developed politically inspired amnesia) were market makers in the newly deregulated energy market and were robbing customers blind on manipulated shortages and insider deals. Part of the problem was a sophisticated mesh of deals and packages that nobody could decipher.

And who was the proximate cause of the current financial meltdown? A small group of market makers in the unregulated derivatives market robbing customers blind with a sophisticated mesh of deals and packages that nobody could decipher.

Of course, the current crisis is extremely complicated with a lot of players and barrels of blame to go around. But wasn’t Bush’s claim to fame that he was a MBA (and how much has he devalued Harvard Business School’s reputation and can they refund his tuition?), not a lawyer or career politician? Nevermind that no business Dubya has ever been involved with has ever turned a profit.

Dubya's asleep at switch management style and his look the other way and whistle approach to malfeasance has destroyed trillions of dollars of wealth quicker than you can say "commodotized debt obligations." A caretaker president has become the undertaker to the economy and there is no Carlyle Group to come to his rescue.

Even the most reviled presidents have a silver lining if you look hard enough. Diplomatic disasters are evened out by domestic successes or vice versa. Carter oversaw bleak economic times (which look like the the Roaring 20s compared to our current situation) but got Israel and Egpyt to quit shooting at each other. Nixon criminally disgraced the office of the presidency but opened relations with China. LBJ micromismanaged Vietnam but brought us civil rights and the Great Society.

Not so with Dubya. The current White House occupant has so thoroughly trashed everything with his reverse-Midas touch that people trying to find pleasant things to say about him have only his AIDS initiatives in Africa to trumpet. Kudos to him for listening to Bono and Bill Gates. We might as well brag that no intern's virtue has been compromised on his watch and that polar bears are such good swimmers we don't have to call them endangered.

Not only are we mired in not one, but two, rather expensive land wars in Asia, our currency is in shambles and the next decade of economic growth has been earmarked for paying off the defaults of the previous one. The most optimistic economists are warring over whether we are looking at a decade of deflationary stagnation or a debilitating bout of Weimar Republic quality hyperinflation. We have to be careful because we only get to play the banana republic game of making our currency worthless once.

George Bush has left our country morally, militarily, and fiscally exhausted and bankrupt. In his previous careers some sugar daddy Saudi billionaire has always come along and bailed him out from his mistakes. Well, the Peter Principle has been proven to go all the way to the top and there are no more bucks to pass, either figuratively or literally. The American people are now saddled with the cost of his many fiascos and fuck-ups. We will be paying for the last eight years of his incompetence for a long, long, long time, both metaphorically and financially. Sadly, George W. Bush doesn't seem any wiser for the experience. Let's hope we are.

Final Grade:
No repeats allowed.


2fs said...

Not to mention that when warned of the impending crisis by a suit launched by the attorneys general of all fifty states (see this WaPo article), Bush's response was to annul the suit, and to act to prevent states from enforcing their own laws against predatory lending (as Patricia Williams points out in this article in The Nation.

While I understand that staving off disaster for the most vulnerable citizens is a clear priority, I hope that at some point, Bush, Cheney, and his gang of criminals are called to account. I'm not optimistic that will happen, though.

yellojkt said...

A true conservative would have deferred to the states. So this is another case of reverse compassion. Unless you think bankers need protection. As details spill of the insider backscratching that pervaded the administration it will only look worse and worse.

Mooselet said...

History is usually kinder to those in the past than those in the present. However as things come to light I think the reverse will be true - Bush will look worse than he already does as the fallout continues.

I enjoyed these posts, yello. Kudos.

Anonymous said...

This has been a fantastic string of posts. And such vitriol! I don't think I can remember your dropping the F-bomb before.

You are not someone I want to piss off.

Anonymous said...

God, I'm depressed.

yellojkt said...

I save just for special occasions. Use it too much and it loses its value.

As you should be. But cheer up, I have a lighter post coming out this evening.

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