For those of us whose most consistent economic challenge is in making sure we have enough money in our checking account, the current Wall Street crisis is bewildering. Yet, ironically, these are the people for whom the severity of the potential economic disaster will be most acute.
The Dallas Morning News had an excellent article yesterday which can provide some clarity regarding just how dangerous a future we face.
"The Bush administration's bailout plan for a financial crisis rooted in failing mortgages is pretty simple.
"It asks Congress to increase the national dept ceiling to $11.315 trillion to cover $700 billion in new borrowings so the Treasury Department can buy bad loans.
"'We're charging the national credit card. It's more of the same, just in larger numbers,' said deficit hawk David Walker, president of the Peter G. Peterson Foundation."
The significance of this is staggering on a global level: If congress raises the debt ceiling, 79% of America's $14 trillion economy will be debt!
Most of us know that China carries a good percentage of the current debt, but list of our other creditors is also scary: Japan, Saudi Arabia, Brazil and Russia. Aren't these some of the countries that we've been lecturing about human rights, military aggression and fair trade? How serious a moral voice can we have, when we're talking to the people to whom we owe big, big money.
The current economic situation makes virtually everything, a subject of foreign policy and everything a matter of national security. The lines are now blurred in ways that probably be refocused in the lifetimes of most of us.
There are other reasons that regular Americans ought to be concerned. Ultimately, inaction or the wrong action will cost citizens life savings, retirement savings and eventually jobs. Increasing unemployment leading to further personal economic insecurity makes a rising class of poor people suddenly a very real possibility. And some of those who will be poor, will find out how some of those who are currently poor, weren't lazy, irresponsible, or unchristian - they will understand that more than we currently realize were early casualties of a system that did not work for them.
The other cause for concern can be seen in Congress' refusal to act with the haste with which this administration is calling. Is the collapse of the economic infrastructure of our nation imminent? Does this portend the need for a radical restructuring of our economy as the Secretary of the Treasury is suggesting? If so, how negligent is Congress being in calling for more time?
While there is a part of me that understands enough to see the rationale for hasty action, in light of the past eight years I think Congress' judiciousness, indeed skepticism, is somewhat appropriate.
After 'victory' was declared in the Iraq War; after we discovered no WMD and found out that Niger didn't have yellow cake uranium; when we understood that the rush to pass the Patriot Act also included restrictions on our freedoms, there were cries not to 'blame' anyone. 'We will have plenty of time to point fingers', officials said.
So having given into fear of imminent danger and having never adequately or officially held anyone accountable we are once again faced with another situation in which we are told that if we don't act immediately there will be catastrophic consequences. And frankly, enough political capital and integrity has been squandered for Congress to legitimately say, "Hold on, we need to think about this!"
The problem is now, there may really not be enough time to think!
I guess the upshot of all of this, is that there is a lot at stake, and more than money. There is something of the political fabric of our nation that is frayed, much as it was after Watergate. And while there may be nothing officially criminal going on, distrust of government and economic institutions is not a good atmosphere for a free market system.
Maybe this whole situation just goes to prove something else John Kenneth Galbraith said, "In communism man exploits man; in capitalism you have the opposite."